By: Nelson, et al. S.B. No. 418
A BILL TO BE ENTITLED
AN ACT
relating to the regulation and prompt payment of health care
providers; providing penalties.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 2, Chapter 397, Acts of the 54th
Legislature, Regular Session, 1955 (Article 3.70-2, Vernon's Texas
Insurance Code), is amended by adding Subsection (N) to read as
follows:
(N) An individual or group policy of accident and sickness
insurance that is delivered, issued for delivery, or renewed in
this state, including a policy issued by a company subject to
Chapter 842, Insurance Code, and an evidence of coverage issued by a
health maintenance organization subject to Chapter 843, Insurance
Code, may contain a coordination of payment provision to coordinate
payment when a member is covered by more than one policy or evidence
of coverage in accordance with rules adopted by the commissioner.
SECTION 2. Section 1, Article 3.70-3C, Insurance Code, as
added by Chapter 1024, Acts of the 75th Legislature, Regular
Session, 1997, is amended by adding Subdivisions (14) and (15) to
read as follows:
(14) "Preauthorization" means a determination by an
insurer that medical care or health care services proposed to be
provided to a patient are medically necessary and appropriate.
(15) "Verification" means a reliable representation
by an insurer to a physician or health care provider that the
insurer will pay the physician or provider for proposed medical
care or health care services if the physician or provider renders
those services to the patient for whom the services are proposed.
The term includes precertification, certification,
recertification, and any other term that would be a reliable
representation by an insurer to a physician or provider.
SECTION 3. Section 3A, Article 3.70-3C, Insurance Code, as
added by Chapter 1024, Acts of the 75th Legislature, Regular
Session, 1997, is amended to read as follows:
Sec. 3A. PROMPT PAYMENT OF [PREFERRED] PROVIDERS. (a) In
this section, "clean claim" means a [completed] claim that complies
with Section 3C of this article[, as determined under department
rules, submitted by a preferred provider for medical care or health
care services under a health insurance policy].
(b) A physician or [preferred] provider must submit a claim
to an insurer not later than the 95th day after the date the
physician or provider provides the medical care or health care
services for which the claim is made. An insurer shall accept as
proof of timely filing a claim filed in compliance with Subsection
(c) of this section or information from another insurer or health
maintenance organization showing that the physician or provider
submitted the claim to the insurer or health maintenance
organization in compliance with Subsection (c) of this section. If
a physician or provider fails to submit a claim in compliance with
this subsection, the physician or provider forfeits the right to
payment unless the failure to submit the claim in compliance with
this subsection is a result of a catastrophic event that
substantially interferes with the normal business operations of the
physician or provider. The period for submitting a claim under this
subsection may be extended by contract. A physician or provider may
not submit a duplicate claim for payment before the 46th day after
the date the original claim was submitted. The commissioner shall
adopt rules under which an insurer may determine whether a claim is
a duplicate claim [for medical care or health care services under a
health insurance policy may obtain acknowledgment of receipt of a
claim for medical care or health care services under a health care
plan by submitting the claim by United States mail, return receipt
requested. An insurer or the contracted clearinghouse of an
insurer that receives a claim electronically shall acknowledge
receipt of the claim by an electronic transmission to the preferred
provider and is not required to acknowledge receipt of the claim by
the insurer in writing].
(c) Except as provided by Article 21.52Z of this code, a
physician or provider may, as appropriate:
(1) mail a claim by United States mail, first class, or
by overnight delivery service;
(2) submit the claim electronically;
(3) fax the claim; or
(4) hand deliver the claim.
(d) If a claim for medical care or health care services
provided to a patient is mailed, the claim is presumed to have been
received by the insurer on the fifth day after the date the claim is
mailed or, if the claim is mailed using overnight service or return
receipt requested, on the date the delivery receipt is signed. If
the claim is submitted electronically, the claim is presumed to
have been received on the date of the electronic verification of
receipt by the insurer or the insurer's clearinghouse. If the
insurer or the insurer's clearinghouse does not provide a
confirmation within 24 hours of submission by the physician or
provider, the physician's or provider's clearinghouse shall provide
the confirmation. The physician's or provider's clearinghouse must
be able to verify that the filing contained the correct payor
identification of the entity to receive the filing. If the claim is
faxed, the claim is presumed to have been received on the date of
the transmission acknowledgment. If the claim is hand delivered,
the claim is presumed to have been received on the date the delivery
receipt is signed.
(e) Except as provided by Subsection (i) of this section,
not [Not] later than the 45th day after the date [that] the insurer
receives a clean claim from a preferred provider in a nonelectronic
format or the 30th day after the date the insurer receives a clean
claim from a preferred provider that is electronically submitted,
the insurer shall make a determination of whether the claim is
payable and:
(1) if the insurer determines the entire claim is
payable, pay the total amount of the claim in accordance with the
contract between the preferred provider and the insurer;
(2) if the insurer determines a portion of the claim is
payable, pay the portion of the claim that is not in dispute and
notify the preferred provider in writing why the remaining portion
of the claim will not be paid; or
(3) if the insurer determines that the claim is not
payable, notify the preferred provider in writing why the claim
will not be paid.
(f) Not later than the 21st day after the date an insurer
affirmatively adjudicates a pharmacy claim that is electronically
submitted, the insurer shall:
(1) pay the total amount of the claim; or
(2) notify the pharmacy provider of the reasons for
denying payment of the claim [(d) If a prescription benefit claim
is electronically adjudicated and electronically paid, and the
preferred provider or its designated agent authorizes treatment,
the claim must be paid not later than the 21st day after the
treatment is authorized].
(g) Except as provided by Subsection (i) of this section, if
[(e) If] the insurer [acknowledges coverage of an insured under
the health insurance policy but] intends to audit the preferred
provider claim, the insurer shall pay the charges submitted at 100
[85] percent of the contracted rate on the claim not later than the
30th day after the date the insurer receives the clean claim from
the preferred provider if submitted electronically or if submitted
nonelectronically not later than the 45th day after the date [that]
the insurer receives the clean claim from the preferred provider.
The insurer shall clearly indicate on the explanation of payment
statement in the manner prescribed by the commissioner by rule that
the clean claim is being paid at 100 percent of the contracted rate,
subject to completion of the audit. If the insurer requests
additional information to complete the audit, the request must
describe with specificity the clinical information requested and
relate only to information the insurer in good faith can
demonstrate is specific to the claim or episode of care. The
insurer may not request as a part of the audit information that is
not contained in, or is not in the process of being incorporated
into, the patient's medical or billing record maintained by a
preferred provider. If the preferred provider does not supply
information reasonably requested by the insurer in connection with
the audit, the insurer may:
(1) notify the provider in writing that the provider
must provide the information not later than the 45th day after the
date of the notice or forfeit the amount of the claim; and
(2) if the provider does not provide the information
required by this subsection, recover the amount of the claim.
(h) The insurer must complete [Following completion of] the
audit on or before the 180th day after the date the clean claim is
received by the insurer, and any additional payment due a preferred
provider or any refund due the insurer shall be made not later than
the 30th day after the completion of the audit. If a preferred
provider disagrees with a refund request made by an insurer based on
the audit, the insurer shall provide the provider with an
opportunity to appeal, and the insurer may not attempt to recover
the payment until all appeal rights are exhausted [later of the date
that:
[(1) the preferred provider receives notice of the
audit results; or
[(2) any appeal rights of the insured are exhausted].
(i) If an insurer needs additional information from a
treating preferred provider to determine payment, the insurer, not
later than the 30th calendar day after the date the insurer receives
a clean claim, shall request in writing that the preferred provider
provide an attachment to the claim that is relevant and necessary
for clarification of the claim. The request must describe with
specificity the clinical information requested and relate only to
information the insurer can demonstrate is specific to the claim or
the claim's related episode of care. The preferred provider is not
required to provide an attachment that is not contained in, or is
not in the process of being incorporated into, the patient's
medical or billing record maintained by a preferred provider. An
insurer that requests an attachment under this subsection shall
determine whether the claim is payable on or before the later of the
15th day after the date the insurer receives the requested
attachment or the latest date for determining whether the claim is
payable under Subsection (e) or (f) of this section. An insurer may
not make more than one request under this subsection in connection
with a claim. Subsections (c) and (d) of this section apply to a
request for and submission of an attachment under this subsection.
(j) If an insurer requests an attachment or other
information from a person other than the preferred provider who
submitted the claim, the insurer shall provide a copy of the request
to the preferred provider who submitted the claim. The insurer may
not withhold payment pending receipt of an attachment or
information requested under this subsection. If on receiving an
attachment or information requested under this subsection the
insurer determines that there was an error in payment of the claim,
the insurer may recover any overpayment under Section 3D of this
article.
(k) The commissioner shall adopt rules under which an
insurer can easily identify attachments or other information
submitted by a physician or provider under Subsection (i) or (j) of
this section.
(l) The insurer's claims payment processes shall:
(1) use nationally recognized, generally accepted
Current Procedural Terminology codes, notes, and guidelines,
including all relevant modifiers; and
(2) be consistent with nationally recognized,
noncommercial system of bundling edits and logic, if available
[(f) An insurer that violates Subsection (c) or (e) of this
section is liable to a preferred provider for the full amount of
billed charges submitted on the claim or the amount payable under
the contracted penalty rate, less any amount previously paid or any
charge for a service that is not covered by the health insurance
policy].
(m) [(g)] A preferred provider may recover reasonable
attorney's fees and court costs in an action to recover payment
under this section.
(n) [(h) In addition to any other penalty or remedy
authorized by this code or another insurance law of this state, an
insurer that violates Subsection (c) or (e) of this section is
subject to an administrative penalty under Article 1.10E of this
code. The administrative penalty imposed under that article may
not exceed $1,000 for each day the claim remains unpaid in violation
of Subsection (c) or (e) of this section.
[(i)] The insurer shall provide a preferred provider with
copies of all applicable utilization review policies and claim
processing policies or procedures[, including required data
elements and claim formats].
(o) [(j) An insurer may, by contract with a preferred
provider, add or change the data elements that must be submitted
with the preferred provider claim.
[(k) Not later than the 60th day before the date of an
addition or change in the data elements that must be submitted with
a claim or any other change in an insurer's claim processing and
payment procedures, the insurer shall provide written notice of the
addition or change to each preferred provider.
[(l) This section does not apply to a claim made by a
preferred provider who is a member of the legislature.
[(m) This section applies to a person with whom an insurer
contracts to process claims or to obtain the services of preferred
providers to provide medical care or health care to insureds under a
health insurance policy.
[(n)] The commissioner of insurance may adopt rules as
necessary to implement this section.
(p) Except as provided by Subsection (b) of this section,
the provisions of this section may not be waived, voided, or
nullified by contract.
SECTION 4. Article 3.70-3C, Insurance Code, as added by
Chapter 1024, Acts of the 75th Legislature, Regular Session, 1997,
is amended by adding Sections 3C through 3J, 10, 11, and 12 to read
as follows:
Sec. 3C. ELEMENTS OF CLEAN CLAIM. (a) A nonelectronic
claim by a physician or provider, other than an institutional
provider, is a "clean claim" if the claim is submitted using the
Centers for Medicare and Medicaid Services Form 1500 or, if adopted
by the commissioner by rule, a successor to that form developed by
the National Uniform Claim Committee or its successor. An
electronic claim by a physician or provider, other than an
institutional provider, is a "clean claim" if the claim is
submitted using the Professional 837 (ASC X12N 837) format or, if
adopted by the commissioner by rule, a successor to that format
adopted by the Centers for Medicare and Medicaid Services or its
successor.
(b) A nonelectronic claim by an institutional provider is a
"clean claim" if the claim is submitted using the Centers for
Medicare and Medicaid Services Form UB-92 or, if adopted by the
commissioner by rule, a successor to that form developed by the
National Uniform Billing Committee or its successor. An electronic
claim by an institutional provider is a "clean claim" if the claim
is submitted using the Institutional 837 (ASC X12N 837) format or,
if adopted by the commissioner by rule, a successor to that format
adopted by the Centers for Medicare and Medicaid Services or its
successor.
(c) The commissioner may adopt rules that specify the
information that must be entered into the appropriate fields on the
applicable claim form for a claim to be a clean claim.
(d) The commissioner may not require any data element for an
electronic claim that is not required in an electronic transaction
set needed to comply with federal law.
(e) An insurer and a physician or provider may agree by
contract to use fewer data elements than are required in an
electronic transaction set needed to comply with federal law.
(f) An otherwise clean claim submitted by a physician or
provider that includes additional fields, data elements,
attachments, or other information not required under this section
is considered to be a clean claim for the purposes of this article.
(g) Except as provided by Subsection (e) of this section,
the provisions of this section may not be waived, voided, or
nullified by contract.
Sec. 3D. OVERPAYMENT. (a) An insurer may recover an
overpayment to a physician or provider if:
(1) not later than the 180th day after the date the
physician or provider receives the payment, the insurer provides
written notice of the overpayment to the physician or provider that
includes the basis and specific reasons for the request for
recovery of funds; and
(2) the physician or provider does not make
arrangements for repayment of the requested funds on or before the
45th day after the date the physician or provider receives the
notice.
(b) If a physician or provider disagrees with a request for
recovery of an overpayment, the insurer shall provide the physician
or provider with an opportunity to appeal, and the insurer may not
attempt to recover the overpayment until all appeal rights are
exhausted.
Sec. 3E. VERIFICATION. (a) In this section, "verification"
includes preauthorization only when preauthorization is a
condition for the verification.
(b) On the request of a preferred provider for verification
of a particular medical care or health care service the preferred
provider proposes to provide to a particular patient, the insurer
shall inform the preferred provider without delay whether the
service, if provided to that patient, will be paid by the insurer.
(c) An insurer shall have appropriate personnel reasonably
available at a toll-free telephone number to provide a verification
under this section between 6 a.m. and 6 p.m. central time Monday
through Friday on each day that is not a legal holiday and between 9
a.m. and noon central time on Saturday, Sunday, and legal holidays.
An insurer must have a telephone system capable of accepting or
recording incoming phone calls for verifications after 6 p.m.
central time Monday through Friday and after noon central time on
Saturday, Sunday, and legal holidays and responding to each of
those calls on or before the second calendar day after the date the
call is received.
(d) An insurer may decline to determine eligibility for
payment if the insurer notifies the physician or preferred provider
who requested the verification of the specific reason the
determination was not made.
(e) An insurer may establish a specific period during which
the verification is valid of not less than 30 days.
(f) An insurer that declines to provide a verification shall
notify the physician or provider who requested the verification of
the specific reason the verification was not provided.
(g) If an insurer has provided a verification for proposed
medical care or health care services, the insurer may not deny or
reduce payment to the physician or provider for those medical care
or health care services if provided to the insured on or before the
30th day after the date the verification was provided unless the
physician or provider has materially misrepresented the proposed
medical or health care services or has substantially failed to
perform the proposed medical or health care services.
(h) The provisions of this section may not be waived,
voided, or nullified by contract.
Sec. 3F. COORDINATION OF PAYMENTS. (a) An insurer may
require a physician or provider to retain in the physician's or
provider's records updated information concerning other sources of
payment and to provide the information to the insurer on the
applicable form described by Section 3C of this article. Except as
provided by this subsection, an insurer may not require a physician
or provider to investigate coordination of payment.
(b) Coordination of payment under this section does not
extend the period for determining whether a claim is payable under
Section 3A(e) or (f) of this article or for auditing a claim under
Section 3A(g) of this article.
(c) A preferred provider who submits a claim for a
particular medical care or health care service to more than one
health maintenance organization or insurer shall provide notice on
the claim submitted to each health maintenance organization or
insurer with which a claim for the same medical care or health care
service will be filed. For the purposes of Sections 3C(a) and (b)
of this article, the commissioner by rule may require claim
elements to be submitted that would facilitate coordination of
payment. A claim electronically submitted by the preferred
provider for covered services or benefits for which there is other
coverage that contains a coordination of benefits provision shall
include the name of the primary payor, adjustment code group,
claims adjustment reason, and amount paid as a covered claim by the
primary payor. That information is considered to be essential
elements of a clean claim for purposes of the secondary payor's
processing of the claim. A preferred provider may only file a claim
under this section with the secondary payor after the preferred
provider has received notice of the disposition of the claim by the
primary payor.
(d) An insurer processing an electronic claim as a secondary
payor shall rely on the primary payor information submitted on the
claim by the preferred provider. If the secondary payor cannot
determine liability based on the information provided by the
physician or provider, the payor may ask for additional information
from any source available, including the physician or provider, the
primary payor, or the insured, subject to the requirements for
timely payment imposed under Section 3A of this article. Primary
payor information may be submitted electronically by the primary
payor to the secondary payor.
(e) If an insurer is a secondary payor and pays a portion of
a claim that should have been paid by the insurer or health
maintenance organization that is the primary payor, the overpayment
must first be pursued from the primary payor. The secondary payor
may collect from the preferred provider if:
(1) on or before the 180th day after the date the
provider receives the overpayment, the secondary payor provides
written notice to the provider of the overpayment and that the
overpayment will be pursued from the primary payor; and
(2) the provider does not make arrangements for
repayment of the requested funds on or before the 45th day after the
date the provider receives notice that the secondary payor is
unable to collect from the primary payor.
(f) The provisions of this section may not be waived,
voided, or nullified by contract.
Sec. 3G. PREAUTHORIZATION OF MEDICAL AND HEALTH CARE
SERVICES. (a) An insurer that uses a preauthorization process for
medical care and health care services shall provide to each
preferred provider, not later than the 10th business day after the
date a request is made, a list of medical care and health care
services that require preauthorization and information concerning
the preauthorization process.
(b) If proposed medical care or health care services require
preauthorization as a condition of the insurer's payment to a
preferred provider under a health insurance policy, the insurer
shall determine whether the medical care or health care services
proposed to be provided to the insured are medically necessary and
appropriate.
(c) On receipt of a request from a preferred provider for
preauthorization, the insurer shall review and issue a
determination indicating whether the proposed medical or health
care services are preauthorized. The determination must be mailed
or otherwise transmitted not later than the third calendar day
after the date the request is received by the insurer.
(d) If the proposed medical care or health care services
involve inpatient care and the insurer requires preauthorization as
a condition of payment, the insurer shall review the request and
issue a length of stay for the admission into a health care facility
based on the recommendation of the patient's physician or provider
and the insurer's written medically accepted screening criteria and
review procedures. If the proposed medical or health care services
are to be provided to a patient who is an inpatient in a health care
facility at the time the services are proposed, the insurer shall
review the request and issue a determination indicating whether
proposed services are preauthorized within 24 hours of the request
by the physician or provider.
(e) An insurer shall have appropriate personnel reasonably
available at a toll-free telephone number to respond to requests
for a preauthorization between 6 a.m. and 6 p.m. central time Monday
through Friday on each day that is not a legal holiday and between 9
a.m. and noon central time on Saturday, Sunday, and legal holidays.
An insurer must have a telephone system capable of accepting or
recording incoming phone calls for preauthorizations after 6 p.m.
central time Monday through Friday and after noon central time on
Saturday, Sunday, and legal holidays and responding to each of
those calls not later than 24 hours after the call is received.
(f) If an insurer has preauthorized medical care or health
care services, the insurer may not deny or reduce payment to the
physician or provider for those services based on medical necessity
or appropriateness of care unless the physician or provider has
materially misrepresented the proposed medical or health care
services or has substantially failed to perform the proposed
medical or health care services.
(g) This section applies to an agent or other person with
whom an insurer contracts to perform, or to whom the insurer
delegates the performance of, preauthorization of proposed medical
or health care services.
(h) The provisions of this section may not be waived,
voided, or nullified by contract.
Sec. 3H. AVAILABILITY OF CODING GUIDELINES. (a) A
contract between an insurer and a physician or provider must
provide that:
(1) the physician or provider may request a
description and copy of the coding guidelines, including any
underlying bundling, recoding, or other payment process and fee
schedules applicable to specific procedures that the physician or
provider will receive under the contract;
(2) the insurer or the insurer's agent will provide the
coding guidelines and fee schedules not later than the 30th day
after the date the insurer receives the request;
(3) the insurer or the insurer's agent will provide
notice of changes to the coding guidelines and fee schedules that
will result in a change of payment to the physician or provider not
later than the 90th day before the date the changes take effect and
will not make retroactive revisions to the coding guidelines and
fee schedules; and
(4) the contract may be terminated by the physician or
provider on or before the 30th day after the date the physician or
provider receives information requested under this subsection
without penalty or discrimination in participation in other health
care products or plans.
(b) A physician or provider who receives information under
Subsection (a) of this section may only:
(1) use or disclose the information for the purpose of
practice management, billing activities, and other business
operations; and
(2) disclose the information to a governmental agency
involved in the regulation of health care or insurance.
(c) The insurer shall, on request of the physician or
provider, provide the name, edition, and model version of the
software that the insurer uses to determine bundling and unbundling
of claims.
(d) The provisions of this section may not be waived,
voided, or nullified by contract.
Sec. 3I. VIOLATION OF CLAIMS PAYMENT REQUIREMENTS; PENALTY.
(a) Except as provided by this section, if a clean claim submitted
to an insurer is payable and the insurer does not determine under
Section 3A of this article that the claim is payable and pay the
claim on or before the date the insurer is required to make a
determination or adjudication of the claim, the insurer shall pay
the physician or provider making the claim the contracted rate owed
on the claim plus a penalty in the amount of the lesser of:
(1) 50 percent of the difference between the billed
charges, as submitted on the claim, and the contracted rate; or
(2) $100,000.
(b) If the claim is paid on or after the 46th day and before
the 91st day after the date the insurer is required to make a
determination or adjudication of the claim, the insurer shall pay a
penalty in the amount of the lesser of:
(1) 100 percent of the difference between the billed
charges, as submitted on the claim, and the contracted rate; or
(2) $200,000.
(c) If the claim is paid on or after the 91st day after the
date the insurer is required to make a determination or
adjudication of the claim, the insurer shall pay a penalty computed
under Subsection (b) of this section plus 18 percent annual
interest on that amount. Interest under this subsection accrues
beginning on the date the insurer was required to pay the claim and
ending on the date the claim and the penalty are paid in full.
(d) Except as provided by this section, an insurer that
determines under Section 3A of this article that a claim is payable,
pays only a portion of the amount of the claim on or before the date
the insurer is required to make a determination or adjudication of
the claim, and pays the balance of the contracted rate owed for the
claim after that date shall pay to the physician or provider, in
addition to the contracted amount owed, a penalty on the amount not
timely paid in the amount of the lesser of:
(1) 50 percent of the underpaid amount; or
(2) $100,000.
(e) If the balance of the claim is paid on or after the 46th
day and before the 91st day after the date the insurer is required
to make a determination or adjudication of the claim, the insurer
shall pay a penalty on the balance of the claim in the amount of the
lesser of:
(1) 100 percent of the underpaid amount; or
(2) $200,000.
(f) If the balance of the claim is paid on or after the 91st
day after the date the insurer is required to make a determination
or adjudication of the claim, the insurer shall pay a penalty on the
balance of the claim computed under Subsection (e) of this section
plus 18 percent annual interest on that amount. Interest under this
subsection accrues beginning on the date the insurer was required
to pay the claim and ending on the date the claim and the penalty are
paid in full.
(g) An insurer is not liable for a penalty under this
section:
(1) if the failure to pay the claim in accordance with
Section 3A of this article is a result of a catastrophic event that
substantially interferes with the normal business operations of the
insurer; or
(2) if the claim was paid in accordance with Section 3A
of this article, but for less than the contracted rate, and:
(A) the physician or provider notifies the
insurer of the underpayment after the 180th day after the date the
underpayment was received; and
(B) the insurer pays the balance of the claim on
or before the 45th day after the date the insurer receives the
notice.
(h) Subsection (g) of this section does not relieve the
insurer of the obligation to pay the remaining unpaid contracted
rate owed the physician or provider.
(i) An insurer that pays a penalty under this section shall
clearly indicate on the explanation of payment statement in the
manner prescribed by the commissioner by rule the amount of the
contracted rate paid and the amount paid as a penalty.
(j) In addition to any other penalty or remedy authorized by
this code, an insurer that violates Section 3A(e), (f), or (g) of
this article in processing more than two percent of clean claims
submitted to the insurer is subject to an administrative penalty
under Chapter 84 of this code. For each day an administrative
penalty is imposed under this subsection, the penalty may not
exceed $1,000 for each claim that remains unpaid in violation of
Section 3A (e), (f), or (g) of this article. In determining whether
an insurer has processed physician and provider claims in
compliance with Section 3A(e), (f), or (g) of this article, the
commissioner shall consider paid claims, other than claims that
have been paid under Section 3A(g) of this article, and shall
compute a compliance percentage for physician and provider claims,
other than institutional provider claims, and a compliance
percentage for institutional provider claims.
Sec. 3J. APPLICABILITY OF ARTICLE TO ENTITIES CONTRACTING
WITH INSURER. Sections 3A-3I of this article apply to a person with
whom an insurer contracts to:
(1) process claims;
(2) obtain the services of physicians and providers to
provide health care services to insureds; or
(3) issue verifications or preauthorizations.
Sec. 10. SERVICES PROVIDED BY CERTAIN PHYSICIANS AND
PROVIDERS. The provisions of this article relating to prompt
payment by an insurer of a physician or provider and to verification
of medical care or health care services apply to a physician or
provider who:
(1) is not a preferred provider included in the
preferred provider network; and
(2) provides to an insured:
(A) care related to an emergency or its attendant
episode of care as required by state or federal law; or
(B) specialty or other medical care or health
care services at the request of the insurer or a preferred provider
because the services are not reasonably available from a preferred
provider who is included in the preferred delivery network.
Sec. 11. IDENTIFICATION CARD. An identification card or
other similar document issued by an insurer regulated by this code
and subject to this article to an individual insured must display:
(1) the first date on which the individual became
insured under the plan; or
(2) a toll-free number a physician or provider may use
to obtain that date.
Sec. 12. CONFLICT WITH OTHER LAW. To the extent of any
conflict between this article and Article 21.52C of this code, this
article controls.
SECTION 5. Subchapter F, Chapter 843, Insurance Code, as
effective June 1, 2003, is amended by adding Section 843.209 to read
as follows:
Sec. 843.209. IDENTIFICATION CARD. An identification card
or other similar document issued by a health maintenance
organization to an enrollee must:
(1) indicate that the health maintenance organization
is regulated under this code and subject to the provisions of
Subchapter J; and
(2) display:
(A) the first date on which the enrollee became
enrolled; or
(B) a toll-free number a physician or provider
may use to obtain that date.
SECTION 6. Subchapter I, Chapter 843, Insurance Code, as
effective June 1, 2003, is amended by adding Section 843.319 to read
as follows:
Sec. 843.319. AVAILABILITY OF CODING GUIDELINES. (a) A
contract between a health maintenance organization and a physician
or provider must provide that:
(1) the physician or provider may request a
description and copy of the coding guidelines, including any
underlying bundling, recoding, or other payment process and fee
schedules applicable to specific procedures that the physician or
provider will receive under the contract;
(2) the health maintenance organization or the health
maintenance organization's agent will provide the coding
guidelines and fee schedules not later than the 30th day after the
date the health maintenance organization receives the request;
(3) the health maintenance organization or the health
maintenance organization's agent will provide notice of changes to
the coding guidelines and fee schedules that will result in a change
of payment to the physician or provider not later than the 90th day
before the date the changes take effect and will not make
retroactive revisions to the coding guidelines and fee schedules;
and
(4) the contract may be terminated by the physician or
provider on or before the 30th day after the date the physician or
provider receives information requested under this subsection
without penalty or discrimination in participation in other health
care products or plans.
(b) A physician or provider who receives information under
Subsection (a) may only:
(1) use or disclose the information for the purpose of
practice management, billing activities, and other business
operations; and
(2) disclose the information to a governmental agency
involved in the regulation of health care or insurance.
(c) The health maintenance organization shall, on request
of the physician or provider, provide the name, edition, and model
version of the software that the health maintenance organization
uses to determine bundling and unbundling of claims.
(d) The provisions of this section may not be waived,
voided, or nullified by contract.
SECTION 7. Section 843.336, Insurance Code, as effective
June 1, 2003, is amended to read as follows:
Sec. 843.336. CLEAN CLAIM [DEFINITION]. (a) In this
subchapter, "clean claim" means a [completed] claim that complies
with this section[, as determined under department rules, submitted
by a physician or provider for health care services under a health
care plan].
(b) A nonelectronic claim by a physician or provider, other
than an institutional provider, is a clean claim if the claim is
submitted using the Centers for Medicare and Medicaid Services Form
1500 or, if adopted by the commissioner by rule, a successor to that
form developed by the National Uniform Claim Committee or its
successor. An electronic claim by a physician or provider, other
than an institutional provider, is a clean claim if the claim is
submitted using the Professional 837 (ASC X12N 837) format or, if
adopted by the commissioner by rule, a successor to that format
adopted by the Centers for Medicare and Medicaid Services or its
successor.
(c) A nonelectronic claim by an institutional provider is a
clean claim if the claim is submitted using the Centers for Medicare
and Medicaid Services Form UB-92 or, if adopted by the commissioner
by rule, a successor to that form developed by the National Uniform
Billing Committee or its successor. An electronic claim by an
institutional provider is a clean claim if the claim is submitted
using the Institutional 837 (ASC X12N 837) format or, if adopted by
the commissioner by rule, a successor to that format adopted by the
Centers for Medicare and Medicaid Services or its successor.
(d) The commissioner may adopt rules that specify the
information that must be entered into the appropriate fields on the
applicable claim form for a claim to be a clean claim.
(e) The commissioner may not require any data element for an
electronic claim that is not required in an electronic transaction
set needed to comply with federal law.
(f) A health maintenance organization and a physician or
provider may agree by contract to use fewer data elements than are
required in an electronic transaction set needed to comply with
federal law.
(g) An otherwise clean claim submitted by a physician or
provider that includes additional fields, data elements,
attachments, or other information not required under this section
is considered to be a clean claim for the purposes of this section.
SECTION 8. Section 843.337, Insurance Code, as effective
June 1, 2003, is amended to read as follows:
Sec. 843.337. TIME FOR SUBMISSION OF CLAIM; DUPLICATE
CLAIMS; ACKNOWLEDGMENT OF RECEIPT OF CLAIM. (a) A physician or
provider must submit a claim to a health maintenance organization
not later than the 95th day after the date the physician or provider
provides the health care services for which the claim is made. A
health maintenance organization shall accept as proof of timely
filing a claim filed in compliance with Subsection (e) or
information from another health maintenance organization or
insurer showing that the physician or provider submitted the claim
to the health maintenance organization or insurer in compliance
with Subsection (e).
(b) If a physician or provider fails to submit a claim in
compliance with this section, the physician or provider forfeits
the right to payment unless the failure to submit the claim in
compliance with this section is a result of a catastrophic event
that substantially interferes with the normal business operations
of the physician or provider.
(c) The period for submitting a claim under this section may
be extended by contract.
(d) A physician or provider may not submit a duplicate claim
for payment before the 46th day after the date the original claim
was submitted. The commissioner shall adopt rules under which a
health maintenance organization may determine whether a claim is a
duplicate claim.
(e) Except as provided by Article 21.52Z, a physician or
provider may, as appropriate:
(1) mail a claim by United States mail, first class, or
by overnight delivery service;
(2) submit the claim electronically;
(3) fax the claim; or
(4) hand deliver the claim.
(f) If a claim for health care services provided to a
patient is mailed, the claim is presumed to have been received by
the health maintenance organization on the fifth day after the date
the claim is mailed or, if the claim is mailed using overnight
service or return receipt requested, on the date the delivery
receipt is signed. If the claim is submitted electronically, the
claim is presumed to have been received on the date of the
electronic verification of receipt by the health maintenance
organization or the health maintenance organization's
clearinghouse. If the health maintenance organization or the
health maintenance organization's clearinghouse does not provide a
confirmation within 24 hours of submission by the physician or
provider, the physician's or provider's clearinghouse shall provide
the confirmation. The physician's or provider's clearinghouse must
be able to verify that the filing contained the correct payor
identification of the entity to receive the filing. If the claim is
faxed, the claim is presumed to have been received on the date of
the transmission acknowledgment. If the claim is hand delivered,
the claim is presumed to have been received on the date the delivery
receipt is signed [for health care services under a health care plan
may obtain acknowledgment of receipt of a claim for health care
services under a health care plan by submitting the claim by United
States mail, return receipt requested.
[(b) A health maintenance organization or the contracted
clearinghouse of the health maintenance organization that receives
a claim electronically shall acknowledge receipt of the claim by an
electronic transmission to the physician or provider and is not
required to acknowledge receipt of the claim in writing].
SECTION 9. Section 843.338, Insurance Code, as effective
June 1, 2003, is amended to read as follows:
Sec. 843.338. DEADLINE FOR ACTION ON CLEAN CLAIMS. Except
as provided by Section 843.3385, not [Not] later than the 45th day
after the date on which a health maintenance organization receives
a clean claim from a participating physician or provider in a
nonelectronic format or the 30th day after the date the health
maintenance organization receives a clean claim from a
participating physician or provider that is electronically
submitted, the health maintenance organization shall make a
determination of whether the claim is payable and:
(1) if the health maintenance organization determines
the entire claim is payable, pay the total amount of the claim in
accordance with the contract between the physician or provider and
the health maintenance organization;
(2) if the health maintenance organization determines
a portion of the claim is payable, pay the portion of the claim that
is not in dispute and notify the physician or provider in writing
why the remaining portion of the claim will not be paid; or
(3) if the health maintenance organization determines
that the claim is not payable, notify the physician or provider in
writing why the claim will not be paid.
SECTION 10. Subchapter J, Chapter 843, Insurance Code, as
effective June 1, 2003, is amended by adding Section 843.3385 to
read as follows:
Sec. 843.3385. ADDITIONAL INFORMATION. (a) If a health
maintenance organization needs additional information from a
treating participating physician or provider to determine payment,
the health maintenance organization, not later than the 30th
calendar day after the date the health maintenance organization
receives a clean claim, shall request in writing that the physician
or provider provide an attachment to the claim that is relevant and
necessary for clarification of the claim.
(b) The request must describe with specificity the clinical
information requested and relate only to information the health
maintenance organization can demonstrate is specific to the claim
or the claim's related episode of care. The participating
physician or provider is not required to provide an attachment that
is not contained in, or is not in the process of being incorporated
into, the patient's medical or billing record maintained by a
participating physician or provider.
(c) A health maintenance organization that requests an
attachment under this section shall determine whether the claim is
payable on or before the later of the 15th day after the date the
health maintenance organization receives the requested attachment
or the latest date for determining whether the claim is payable
under Section 843.338 or 843.339.
(d) A health maintenance organization may not make more than
one request under this section in connection with a claim. Sections
843.337(e) and (f) apply to a request for and submission of an
attachment under Subsection (a).
(e) If a health maintenance organization requests an
attachment or other information from a person other than the
participating physician or provider who submitted the claim, the
health maintenance organization shall provide a copy of the request
to the physician or provider who submitted the claim. The health
maintenance organization may not withhold payment pending receipt
of an attachment or information requested under this subsection.
If on receiving an attachment or information requested under this
subsection the health maintenance organization determines that
there was an error in payment of the claim, the health maintenance
organization may recover any overpayment under Section 843.350.
(f) The commissioner shall adopt rules under which a health
maintenance organization can easily identify an attachment or other
information submitted by a physician or provider under this
section.
SECTION 11. Section 843.339, Insurance Code, as effective
June 1, 2003, is amended to read as follows:
Sec. 843.339. DEADLINE FOR ACTION ON CERTAIN PRESCRIPTION
[BENEFIT] CLAIMS. Not later than the 21st day after the date a
health maintenance organization affirmatively adjudicates a
pharmacy claim that is electronically submitted, the health
maintenance organization shall:
(1) pay the total amount of the claim; or
(2) notify the pharmacy provider of the reasons for
denying payment of the claim [If a health maintenance organization
or its designated agent authorizes treatment, a prescription
benefit claim that is electronically adjudicated and
electronically paid shall be paid not later than the 21st day after
the date on which the treatment is authorized].
SECTION 12. Section 843.340, Insurance Code, as effective
June 1, 2003, is amended to read as follows:
Sec. 843.340. AUDITED CLAIMS. (a) Except as provided by
Section 843.3385, if a [A] health maintenance organization [that
acknowledges coverage of an enrollee under a health care plan but]
intends to audit a claim submitted by a participating physician or
provider, the health maintenance organization shall pay the charges
submitted at 100 [85] percent of the contracted rate on the claim
not later than the 30th day after the date the health maintenance
organization receives the clean claim from the participating
physician or provider if submitted electronically or if submitted
nonelectronically not later than the 45th day after the date on
which the health maintenance organization receives the clean claim
from a participating physician or provider. The health maintenance
organization shall clearly indicate on the explanation of payment
statement in the manner prescribed by the commissioner by rule that
the clean claim is being paid at 100 percent of the contracted rate,
subject to completion of the audit.
(b) If the health maintenance organization requests
additional information to complete the audit, the request must
describe with specificity the clinical information requested and
relate only to information the health maintenance organization in
good faith can demonstrate is specific to the claim or episode of
care. The health maintenance organization may not request as a part
of the audit information that is not contained in, or is not in the
process of being incorporated into, the patient's medical or
billing record maintained by a participating physician or provider.
(c) If the participating physician or provider does not
supply information reasonably requested by the health maintenance
organization in connection with the audit, the health maintenance
organization may:
(1) notify the physician or provider in writing that
the physician or provider must provide the information not later
than the 45th day after the date of the notice or forfeit the amount
of the claim; and
(2) if the physician or provider does not provide the
information required by this section, recover the amount of the
claim.
(d) The health maintenance organization must complete
[Following completion of] the audit on or before the 180th day after
the date the clean claim is received by the health maintenance
organization, and any additional payment due a participating
physician or provider or any refund due the health maintenance
organization shall be made not later than the 30th day after the
completion of the audit.
(e) If a participating physician or provider disagrees with
a refund request made by a health maintenance organization based on
the audit, the health maintenance organization shall provide the
physician or provider with an opportunity to appeal, and the health
maintenance organization may not attempt to recover the payment
until all appeal rights are exhausted [later of the date that:
[(1) the physician or provider receives notice of the
audit results; or
[(2) any appeal rights of the enrollee are exhausted].
SECTION 13. Section 843.341, Insurance Code, as effective
June 1, 2003, is amended to read as follows:
Sec. 843.341. CLAIMS PROCESSING PROCEDURES. (a) A health
maintenance organization shall provide a participating physician
or provider with copies of all applicable utilization review
policies and claim processing policies or procedures[, including
required data elements and claim formats].
(b) A health maintenance organization's claims payment
processes shall:
(1) use nationally recognized, generally accepted
Current Procedural Terminology codes, notes, and guidelines,
including all relevant modifiers; and
(2) be consistent with nationally recognized,
noncommercial system of bundling edits and logic, if available
[organization may, by contract with a participating physician or
provider, add or change the data elements that must be submitted
with a claim from the physician or provider.
[(c) Not later than the 60th day before the date of an
addition or change in the data elements that must be submitted with
a claim or any other change in a health maintenance organization's
claim processing and payment procedures, the health maintenance
organization shall provide written notice of the addition or change
to each participating physician or provider].
SECTION 14. Section 843.342, Insurance Code, as effective
June 1, 2003, is amended to read as follows:
Sec. 843.342. VIOLATION OF CERTAIN CLAIMS PAYMENT
PROVISIONS; PENALTIES [ADMINISTRATIVE PENALTY]. (a) Except as
provided by this section, if a clean claim submitted to a health
maintenance organization is payable and the health maintenance
organization does not determine under this subchapter that the
claim is payable and pay the claim on or before the date the health
maintenance organization is required to make a determination or
adjudication of the claim, the health maintenance organization
shall pay the physician or provider making the claim the contracted
rate owed on the claim plus a penalty in the amount of the lesser of:
(1) 50 percent of the difference between the billed
charges, as submitted on the claim, and the contracted rate; or
(2) $100,000.
(b) If the claim is paid on or after the 46th day and before
the 91st day after the date the health maintenance organization is
required to make a determination or adjudication of the claim, the
health maintenance organization shall pay a penalty in the amount
of the lesser of:
(1) 100 percent of the difference between the billed
charges, as submitted on the claim, and the contracted rate; or
(2) $200,000.
(c) If the claim is paid on or after the 91st day after the
date the health maintenance organization is required to make a
determination or adjudication of the claim, the health maintenance
organization shall pay a penalty computed under Subsection (b) plus
18 percent annual interest on that amount. Interest under this
subsection accrues beginning on the date the health maintenance
organization was required to pay the claim and ending on the date
the claim and the penalty are paid in full.
(d) Except as provided by this section, a health maintenance
organization that determines under this subchapter that a claim is
payable, pays only a portion of the amount of the claim on or before
the date the health maintenance organization is required to make a
determination or adjudication of the claim, and pays the balance of
the contracted rate owed for the claim after that date shall pay to
the physician or provider, in addition to the contracted amount
owed, a penalty on the amount not timely paid in the amount of the
lesser of:
(1) 50 percent of the underpaid amount; or
(2) $100,000.
(e) If the balance of the claim is paid on or after the 46th
day and before the 91st day after the date the health maintenance
organization is required to make a determination or adjudication of
the claim, the health maintenance organization shall pay a penalty
on the balance of the claim in the amount of the lesser of:
(1) 100 percent of the underpaid amount; or
(2) $200,000.
(f) If the balance of the claim is paid on or after the 91st
day after the date the health maintenance organization is required
to make a determination or adjudication of the claim, the health
maintenance organization shall pay a penalty on the balance of the
claim computed under Subsection (e) plus 18 percent annual interest
on that amount. Interest under this subsection accrues beginning
on the date the health maintenance organization was required to pay
the claim and ending on the date the claim and the penalty are paid
in full.
(g) A health maintenance organization is not liable for a
penalty under this section:
(1) if the failure to pay the claim in accordance with
this subchapter is a result of a catastrophic event that
substantially interferes with the normal business operations of the
health maintenance organization; or
(2) if the claim was paid in accordance with this
subchapter, but for less than the contracted rate, and:
(A) the physician or provider notifies the health
maintenance organization of the underpayment after the 180th day
after the date the underpayment was received; and
(B) the health maintenance organization pays the
balance of the claim on or before the 45th day after the date the
health maintenance organization receives the notice.
(h) Subsection (g) does not relieve the health maintenance
organization of the obligation to pay the remaining unpaid
contracted rate owed the physician or provider.
(i) A health maintenance organization that pays a penalty
under this section shall clearly indicate on the explanation of
payment statement in the manner prescribed by the commissioner by
rule the amount of the contracted rate paid and the amount paid as a
penalty.
(j) [A health maintenance organization that violates
Section 843.338 or 843.340 is liable to a physician or provider for
the full amount of billed charges submitted on the claim or the
amount payable under the contracted penalty rate, less any amount
previously paid or any charge for a service that is not covered by
the health care plan.
[(b)] In addition to any other penalty or remedy authorized
by this code, a health maintenance organization that violates
Section 843.338, 843.339, or 843.340 in processing more than two
percent of clean claims submitted to the health maintenance
organization is subject to an administrative penalty under Chapter
84. For each day an [The] administrative penalty is imposed under
this subsection, the penalty [that chapter] may not exceed $1,000
for each [day the] claim that remains unpaid in violation of Section
843.338, 843.339, or 843.340.
(k) In determining whether a health maintenance
organization has processed physician and provider claims in
compliance with Section 843.338, 843.339, or 843.340, the
commissioner shall consider paid claims, other than claims that
have been paid under Section 843.340, and shall compute a
compliance percentage for physician and provider claims, other than
institutional provider claims, and a compliance percentage for
institutional provider claims.
SECTION 15. Section 843.343, Insurance Code, as effective
June 1, 2003, is amended to read as follows:
Sec. 843.343. ATTORNEY'S FEES. A physician or provider may
recover reasonable attorney's fees and court costs in an action to
recover payment under this subchapter [Section 843.342].
SECTION 16. Section 843.344, Insurance Code, as effective
June 1, 2003, is amended to read as follows:
Sec. 843.344. APPLICABILITY OF SUBCHAPTER TO ENTITIES
CONTRACTING WITH HEALTH MAINTENANCE ORGANIZATION. This subchapter
applies [Sections 843.336-843.343 apply] to a person with whom a
health maintenance organization contracts to:
(1) process claims; [or]
(2) obtain the services of physicians and providers to
provide health care services to enrollees; or
(3) issue verifications or preauthorizations.
SECTION 17. Section 843.345, Insurance Code, as effective
June 1, 2003, is amended to read as follows:
Sec. 843.345. EXCEPTION [EXCEPTIONS]. This subchapter does
[Sections 843.336-843.344 do] not apply to[:
[(1)] a capitated payment required to be made to a
physician or provider under an agreement to provide health care
services[, including medical care, under a health care plan; or
[(2) a claim submitted by a physician or provider who
is a member of the legislature].
SECTION 18. Section 843.346, Insurance Code, as effective
June 1, 2003, is amended to read as follows:
Sec. 843.346. PAYMENT OF CLAIMS. Except as provided by this
subchapter [Subject to Sections 843.336-843.345], a health
maintenance organization shall pay a physician or provider for
health care services and benefits provided to an enrollee [under
the evidence of coverage and to which the enrollee is entitled under
the terms of the evidence of coverage] not later than:
(1) the 45th day after the date on which a claim for
payment is received with the documentation reasonably necessary to
process the claim; or
(2) if applicable, within the number of calendar days
specified by written agreement between the physician or provider
and the health maintenance organization.
SECTION 19. Subchapter J, Chapter 843, Insurance Code, as
effective June 1, 2003, is amended by adding Sections 843.347
through 843.353 to read as follows:
Sec. 843.347. VERIFICATION. (a) In this section,
"verification" means a reliable representation by a health
maintenance organization to a physician or provider that the health
maintenance organization will pay the physician or provider for
proposed health care services if the physician or provider renders
those services to the patient for whom the services are proposed.
The term includes precertification, certification,
recertification, and any other term that would be a reliable
representation by a health maintenance organization to a physician
or provider and includes preauthorization only when
preauthorization is a condition for the verification.
(b) On the request of a physician or provider for
verification of a particular health care service the participating
physician or provider proposes to provide to a particular patient,
the health maintenance organization shall inform the physician or
provider without delay whether the service, if provided to that
patient, will be paid by the health maintenance organization.
(c) A health maintenance organization shall have
appropriate personnel reasonably available at a toll-free
telephone number to provide a verification under this section
between 6 a.m. and 6 p.m. central time Monday through Friday on each
day that is not a legal holiday and between 9 a.m. and noon central
time on Saturday, Sunday, and legal holidays. A health maintenance
organization must have a telephone system capable of accepting or
recording incoming phone calls for verifications after 6 p.m.
central time Monday through Friday and after noon central time on
Saturday, Sunday, and legal holidays and responding to each of
those calls on or before the second calendar day after the date the
call is received.
(d) A health maintenance organization may decline to
determine eligibility for payment if the insurer notifies the
physician or preferred provider who requested the verification of
the specific reason the determination was not made.
(e) A health maintenance organization may establish a
specific period during which the verification is valid of not less
than 30 days.
(f) A health maintenance organization that declines to
provide a verification shall notify the physician or provider who
requested the verification of the specific reason the verification
was not provided.
(g) If a health maintenance organization has provided a
verification for proposed health care services, the health
maintenance organization may not deny or reduce payment to the
physician or provider for those health care services if provided to
the enrollee on or before the 30th day after the date the
verification was provided unless the physician or provider has
materially misrepresented the proposed health care services or has
substantially failed to perform the proposed health care services.
Sec. 843.348. PREAUTHORIZATION OF HEALTH CARE SERVICES.
(a) In this section, "preauthorization" means a determination by a
health maintenance organization that health care services proposed
to be provided to a patient are medically necessary and
appropriate.
(b) A health maintenance organization that uses a
preauthorization process for health care services shall provide
each participating physician or provider, not later than the 10th
business day after the date a request is made, a list of health care
services that do not require preauthorization and information
concerning the preauthorization process.
(c) If proposed health care services require
preauthorization as a condition of the health maintenance
organization's payment to a participating physician or provider,
the health maintenance organization shall determine whether the
health care services proposed to be provided to the enrollee are
medically necessary and appropriate.
(d) On receipt of a request from a participating physician
or provider for preauthorization, the health maintenance
organization shall review and issue a determination indicating
whether the health care services are preauthorized. The
determination must be mailed or otherwise transmitted not later
than the third calendar day after the date the request is received
by the health maintenance organization.
(e) If the proposed health care services involve inpatient
care and the health maintenance organization requires
preauthorization as a condition of payment, the health maintenance
organization shall review the request and issue a length of stay for
the admission into a health care facility based on the
recommendation of the patient's physician or provider and the
health maintenance organization's written medically accepted
screening criteria and review procedures. If the proposed health
care services are to be provided to a patient who is an inpatient in
a health care facility at the time the services are proposed, the
health maintenance organization shall review the request and issue
a determination indicating whether proposed services are
preauthorized within 24 hours of the request by the physician or
provider.
(f) A health maintenance organization shall have
appropriate personnel reasonably available at a toll-free
telephone number to respond to requests for a preauthorization
between 6 a.m. and 6 p.m. central time Monday through Friday on each
day that is not a legal holiday and between 9 a.m. and noon central
time on Saturday, Sunday, and legal holidays. A health maintenance
organization must have a telephone system capable of accepting or
recording incoming phone calls for preauthorizations after 6 p.m.
central time Monday through Friday and after noon central time on
Saturday, Sunday, and legal holidays and responding to each of
those calls not later than 24 hours after the call is received.
(g) If the health maintenance organization has
preauthorized health care services, the health maintenance
organization may not deny or reduce payment to the physician or
provider for those services based on medical necessity or
appropriateness of care unless the physician or provider has
materially misrepresented the proposed health care services or has
substantially failed to perform the proposed health care services.
(h) This section applies to an agent or other person with
whom a health maintenance organization contracts to perform, or to
whom the health maintenance organization delegates the performance
of, preauthorization of proposed health care services.
Sec. 843.349. COORDINATION OF PAYMENTS. (a) A health
maintenance organization may require a physician or provider to
retain in the physician's or provider's records updated information
concerning other sources of payment coverage and to provide the
information to the health maintenance organization on the
applicable form described by Section 843.336. Except as provided
by this section, a health maintenance organization may not require
a physician or provider to investigate coordination of other
payment.
(b) Coordination of other payment under this section does
not extend the period for determining whether a claim is payable
under Section 843.338 or 843.339 or for auditing a claim under
Section 843.340.
(c) A participating physician or provider who submits a
claim for a particular health care service to more than one health
maintenance organization or insurer shall provide notice on the
claim submitted to each health maintenance organization or insurer
with which a claim for the same health care service will be filed.
For the purposes of Sections 843.336(b) and (c), the commissioner
by rule may require claim elements to be submitted that would
facilitate coordination of payment. A claim electronically
submitted by the participating physician or provider for covered
services or benefits for which there is other coverage that
contains a coordination of benefits provision shall include the
name of the primary payor, adjustment code group, claims adjustment
reason, and amount paid as a covered claim by the primary payor.
That information is considered to be essential elements of a clean
claim for purposes of the secondary payor's processing of the
claim. A participating physician or provider may only file a claim
under this section with the secondary payor after the physician or
provider has received notice of the disposition of the claim by the
primary payor.
(d) A health maintenance organization processing an
electronic claim as a secondary payor shall rely on the primary
payor information submitted on the claim by the participating
physician or provider. If the secondary payor cannot determine
liability based on the information provided by the physician or
provider, the payor may ask for additional information from any
source available, including the physician or provider, the primary
payor, or the enrollee, subject to the requirements for timely
payment imposed under this subchapter. Primary payor information
may be submitted electronically by the primary payor to the
secondary payor.
(e) If a health maintenance organization is a secondary
payor and pays a portion of a claim that should have been paid by the
insurer or health maintenance organization that is the primary
payor, the overpayment must first be pursued from the primary
payor. The secondary payor may collect from the participating
provider if:
(1) on or before the 180th day after the date the
provider receives the overpayment, the secondary payor provides
written notice to the provider of the overpayment and that the
overpayment will be pursued from the primary payor; and
(2) the provider does not make arrangements for
repayment of the requested funds on or before the 45th day after the
date the provider receives notice that the secondary payor is
unable to collect from the primary payor.
Sec. 843.350. OVERPAYMENT. (a) A health maintenance
organization may recover an overpayment to a physician or provider
if:
(1) not later than the 180th day after the date the
physician or provider receives the payment, the health maintenance
organization provides written notice of the overpayment to the
physician or provider that includes the basis and specific reasons
for the request for recovery of funds; and
(2) the physician or provider does not make
arrangements for repayment of the requested funds on or before the
45th day after the date the physician or provider receives the
notice.
(b) If a physician or provider disagrees with a request for
recovery of an overpayment, the health maintenance organization
shall provide the physician or provider with an opportunity to
appeal, and the health maintenance organization may not recover the
overpayment until all appeal rights are exhausted.
Sec. 843.351. SERVICES PROVIDED BY CERTAIN PHYSICIANS AND
PROVIDERS. The provisions of this subchapter relating to prompt
payment by a health maintenance organization of a physician or
provider and to verification of health care services apply to a
physician or provider who:
(1) is not included in the health maintenance
organization delivery network; and
(2) provides to an enrollee:
(A) care related to an emergency or its attendant
episode of care as required by state or federal law; or
(B) specialty or other health care services at
the request of the health maintenance organization or a physician
or provider who is included in the health maintenance organization
delivery network because the services are not reasonably available
within the network.
Sec. 843.352. CONFLICT WITH OTHER LAW. To the extent of
any conflict between this subchapter and Article 21.52C, this
subchapter controls.
Sec. 843.353. WAIVER PROHIBITED. Except as provided by
Sections 843.336(f) and 843.337(c), the provisions of this
subchapter may not be waived, voided, or nullified by contract.
SECTION 20. Subchapter E, Chapter 21, Insurance Code, is
amended by adding Articles 21.52Y and 21.52Z to read as follows:
Art. 21.52Y. TECHNICAL ADVISORY COMMITTEE ON CLAIMS
PROCESSING. (a) The commissioner shall appoint a technical
advisory committee on claims processing by insurers and health
maintenance organizations of claims by physicians and other health
care providers for medical care and health care services provided
to patients.
(b) The committee shall advise the commissioner on
technical aspects of coding of health care services and claims
development, submission, processing, adjudication, and payment, as
well as the impact on those processes of contractual requirements
and relationships, including relationships among employers, health
benefit plans, insurers, health maintenance organizations,
preferred provider organizations, electronic clearinghouses,
physicians and other health care providers, third-party
administrators, independent physician associations, and medical
groups. The committee shall also advise the commissioner with
respect to the implementation of the standardized coding and
bundling edits and logic.
(c) The commissioner shall consult the advisory committee
with respect to any rule related to the subjects described by
Subsection (b) of this article before adopting the rule.
(d) On or before September 1 of each even-numbered year, the
committee shall issue a report to the legislature on the activities
of the committee.
(e) Members of the advisory committee serve without
compensation.
Art. 21.52Z. ELECTRONIC HEALTH CARE TRANSACTIONS
Sec. 1. HEALTH BENEFIT PLAN DEFINED. (a) In this article,
"health benefit plan" means a plan that provides benefits for
medical, surgical, or other treatment expenses incurred as a result
of a health condition, a mental health condition, an accident,
sickness, or substance abuse, including an individual, group,
blanket, or franchise insurance policy or insurance agreement, a
group hospital service contract, or an individual or group evidence
of coverage or similar coverage document that is offered by:
(1) an insurance company;
(2) a group hospital service corporation operating
under Chapter 842 of this code;
(3) a fraternal benefit society operating under
Chapter 885 of this code;
(4) a stipulated premium insurance company operating
under Chapter 884 of this code;
(5) a Lloyd's plan operating under Chapter 941 of this
code;
(6) an exchange operating under Chapter 942 of this
code;
(7) a health maintenance organization operating under
Chapter 843 of this code;
(8) a multiple employer welfare arrangement that holds
a certificate of authority under Chapter 846 of this code; or
(9) an approved nonprofit health corporation that
holds a certificate of authority under Chapter 844 of this code.
(b) The term includes:
(1) a small employer health benefit plan written under
Chapter 26 of this code; and
(2) a health benefit plan offered under Chapter 1551,
1575, or 1601 of this code or Article 3.50–7 of this code.
Sec. 2. ELECTRONIC SUBMISSION OF CLAIMS. The issuer of a
health benefit plan by contract shall require that a health care
professional licensed or registered under the Occupations Code or a
health care facility licensed under the Health and Safety Code
submit a health care claim or equivalent encounter information, a
referral certification, or an authorization or eligibility
transaction electronically. The health benefit plan issuer shall
comply with the standards for electronic transactions required by
this section and established by the commissioner by rule.
Sec. 2A. TEMPORARY PROVISION: ELECTRONIC SUBMISSION OF
CLAIMS. (a) Notwithstanding Section 2 of this article, an issuer
of a health benefit plan is not required to require a health care
professional or facility to comply with the contract provision
required by Section 2 of this article before September 1, 2006.
(b) An issuer of a health benefit plan by contract may
require that a health care professional licensed or registered
under the Occupations Code or a health care facility licensed under
the Health and Safety Code submit a health care claim or equivalent
encounter information, a referral certification, or an
authorization or eligibility transaction electronically before
September 1, 2006. The health benefit plan issuer shall comply with
the standards for electronic transactions required by this section
and established by the commissioner by rule.
(c) A contract entered into before September 1, 2006,
between the issuer of a health benefit plan and a health care
professional or health care facility must provide for a waiver of
any requirement for electronic submission established under
Subsection (b) of this section.
(d) The commissioner shall establish circumstances under
which a waiver is required, including:
(1) circumstances in which no method is available for
the submission of claims in electronic form;
(2) the operation of small physician practices;
(3) the operation of other small health care provider
practices;
(4) undue hardship, including fiscal or operational
hardship; or
(5) any other special circumstance that would justify
a waiver.
(e) Any health care professional or health care facility
that is denied a waiver by a health benefit plan may appeal the
denial to the commissioner. The commissioner shall determine
whether a waiver must be granted.
(f) The issuer of a health benefit plan may not refuse to
contract or renew a contract with a health care professional or
health care facility based in whole or in part on the professional
or facility requesting or receiving a waiver or appealing a waiver
determination.
(g) This section expires September 1, 2007.
Sec. 3. MODE OF TRANSMISSION. The issuer of a health
benefit plan may not by contract limit the mode of electronic
transmission that a health care professional or health care
facility may use to submit information under this article.
Sec. 4. CERTAIN CHARGES PROHIBITED. A health benefit plan
may not directly or indirectly charge or hold a health care
professional, health care facility, or person enrolled in a health
benefit plan responsible for a fee for the adjudication of a claim.
Sec. 5. RULES. The commissioner may adopt rules as
necessary to implement this article. The commissioner may not
require any data element for electronically filed claims that is
not required to comply with federal law.
SECTION 21. As soon as practicable, but not later than the
30th day after the effective date of this Act, the commissioner of
insurance shall adopt rules as necessary to implement this Act. The
commissioner may use the procedures under Section 2001.034,
Government Code, for adopting emergency rules with abbreviated
notice and hearing to adopt rules under this section. The
commissioner is not required to make the finding described by
Subsection (a), Section 2001.034, Government Code, to use the
emergency rules procedures.
SECTION 22. (a) With respect to a contract entered into
between an insurer or health maintenance organization and a
physician or health care provider, and payment for medical care or
health care services under the contract, the changes in law made by
this Act apply only to a contract entered into or renewed on or
after the 60th day after the effective date of this Act and payment
for services under the contract. Such a contract entered into
before the 60th day after the effective date of this Act and not
renewed or that was last renewed before the 60th day after the
effective date of this Act, and payment for medical care or health
care services under the contract, are governed by the law in effect
immediately before the effective date of this Act, and that law is
continued in effect for that purpose.
(b) With respect to the payment for medical care or health
care services provided, but not provided under a contract to which
Subsection (a) of this section applies, the changes in law made by
this Act apply only to the payment for those services provided on or
after the 60th day after the effective date of this Act. Payment
for those services provided before the 60th day after the effective
date of this Act is governed by the law in effect immediately before
the effective date of this Act, and that law is continued in effect
for that purpose.
SECTION 23. This Act takes effect June 1, 2003, if it
receives a vote of two-thirds of all the members elected to each
house, as provided by Section 39, Article III, Texas Constitution.
If this Act does not receive the vote necessary for immediate
effect, this Act takes effect September 1, 2003.