78R3064 AJA-F
By: Nelson S.B. No. 418
A BILL TO BE ENTITLED
AN ACT
relating to the regulation and prompt payment of health care
providers under certain health benefit plans; providing penalties.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. 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 PHYSICIANS AND [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. 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 as
determined under guidelines established by the commissioner by
rule. An insurer shall accept as proof of timely filing information
from another health benefit plan issuer showing that the physician
or provider submitted the claim to the health benefit plan issuer in
compliance with this subsection. 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 Subsection (e) or (f) of this
section, not [Not] later than the 45th day after the date that the
insurer receives a clean claim submitted by [from] a preferred
provider, the insurer shall make a determination of whether the
claim is eligible for payment and:
(1) if the insurer determines the entire claim is
eligible for payment, 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
eligible for payment, 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
eligible for payment, notify the preferred provider in writing why
the claim will not be paid.
(d) 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. [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.]
(e) Except as provided by Subsection (f) of this section, if
[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
45th day after the date that the insurer receives the claim from the
preferred provider and shall clearly indicate on the explanation of
benefits statement in the manner prescribed by the commissioner by
rule that the claim is being paid subject to the completion of an
audit. The insurer must complete the audit on or before the 180th
day after the date the insurer receives the claim. If the insurer
requests additional information needed 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 the claim's related
episode of care. The insurer may not request as 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 a 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
as required by Subdivision (1) of this subsection, recover the
amount of the claim under Section 3D of this article and reasonable
attorney's fees and court costs in any action to recover payment
under that section. [Following completion of the audit, any
additional payment due a preferred provider or any refund due the
insurer shall be made not later than the 30th day after the 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.]
(f) If an insurer needs additional information from a
treating preferred provider to determine eligibility for payment,
the insurer, not later than the 30th day after the date the insurer
receives a clean claim, shall request in writing that the preferred
provider provide any additional information the insurer desires in
good faith 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 insurer
may not request 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 the preferred provider. If an insurer
requests additional information under this subsection, the period
for determining whether the claim is eligible for payment is
extended by one day for each day after the date the insurer requests
the additional information and before the date the insurer receives
the additional information. An insurer may not make more than one
request under this subsection in connection with a claim. [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.]
(g) The commissioner shall adopt rules to identify a
submission by a physician or provider to an insurer that includes
additional information requested by the insurer.
(h) The insurer's clean claims payment processes must:
(1) use nationally recognized, generally accepted
Current Procedural Terminology codes, notes, and guidelines,
including all relevant modifiers, if available; and
(2) be consistent with the nationally recognized,
noncommercial system of bundling edits and logic known as the
National Correct Coding Initiative and available from the National
Technical Information Service.
(i) A preferred provider may recover reasonable attorney's
fees and court costs in an action to recover payment under this
section.
(j) [(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), (d), [or] (e), or (f) of this
section in processing more than two percent of clean claims
submitted to the insurer by preferred providers who are
institutional providers or more than two percent of clean claims
submitted to the insurer by preferred providers who are not
institutional providers is subject to an administrative penalty
under Chapter 84 [Article 1.10E] of this code. For each day an
[The] administrative penalty is imposed under this subsection, the
penalty [that article] may not exceed $1,000 for each [day the]
claim that remains unpaid in violation of Subsection (c), (d), [or]
(e), or (f) of this section.
(k) [(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.
[(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].
(l) [(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.
(m) [(n)] The commissioner of insurance may adopt rules as
necessary to implement this section.
(n) Except as provided by Subsection (b) of this section,
the provisions of this section may not be waived, voided, or
nullified by contract.
SECTION 2. 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-3J and 10-13 to read as follows:
Sec. 3C. ELEMENTS OF CLEAN CLAIM. (a) A claim by a
physician or provider, other than an institutional provider, is a
"clean claim" if the claim is submitted to an insurer for payment
using Centers for Medicare and Medicaid Services Form 1500 or a
successor to that form developed by the National Uniform Claim
Committee or its successor and adopted by the commissioner by rule
for the purposes of this subsection and contains the information
required by the commissioner by rule for the purposes of this
subsection entered into the appropriate fields on the form in the
manner prescribed.
(b) A claim by an institutional provider is a "clean claim"
if the claim is submitted to an insurer for payment using Centers
for Medicare and Medicaid Services Form UB-92 or a successor to that
form developed by the National Uniform Billing Committee or its
successor and adopted by the commissioner by rule for the purposes
of this subsection and contains the information required by the
commissioner by rule for the purposes of this subsection entered
into the appropriate fields on the form in the manner prescribed.
(c) The commissioner may not require any data element for
electronically filed claims that is not required to comply with
federal law.
(d) An insurer and a physician or provider may agree by
contract that a claim that uses fewer elements than those required
by the commissioner is a clean claim for the purposes of this
article.
(e) A 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.
(f) Except as provided by this section, the provisions of
this section may not be waived, voided, or nullified by contract.
Sec. 3D. OVERPAYMENT. (a) Except as provided by Subsection
(b) of this section, an insurer may deduct the amount of an
overpayment from any amount owed by the insurer to the physician or
provider, or may otherwise recover the amount of overpayment, 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 exercises a right of appeal
available under the physician's or provider's contract with the
insurer with respect to an alleged overpayment, the insurer may not
recover the amount overpaid until the physician's or provider's
right of appeal is exhausted.
Sec. 3E. AVAILABILITY OF CODING GUIDELINES. (a) A
preferred provider contract between an insurer and a physician or
provider must provide that:
(1) the physician or provider may request a
description 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 a 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, or other business
operations; and
(2) disclose the information to a government agency
involved in the regulation of health care or health coverage.
(c) The insurer shall, on request of a 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) Nothing in this section may be construed to require an
insurer to provide specific information that would violate any
applicable copyright law or licensing agreement. However, the
insurer must supply, in lieu of any information withheld on the
basis of copyright law or a licensing agreement, a summary of
information that will allow a reasonable person with sufficient
training, experience, and competence in claims processing to
determine the payment to be made under the terms of the contract for
covered services provided to insureds.
(e) The provisions of this section may not be waived,
voided, or nullified by contract.
Sec. 3F. PREAUTHORIZATION OF MEDICAL AND HEALTH CARE
SERVICES. (a) In this section, "preauthorization" means a
determination by the insurer that the medical care or health care
services proposed to be provided to a patient are medically
necessary and appropriate.
(b) 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 working 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.
(c) 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.
(d) Not later than the third day after the date an insurer
receives a request from a preferred provider for preauthorization,
the insurer shall review and issue by mail or otherwise a
determination indicating whether the proposed services are
preauthorized.
(e) 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 and issue a length
of stay for the admission into a health care facility based on the
insurer's written medically accepted screening criteria and review
procedures, considering the recommendation of the patient's
physician or health care provider. 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 and issue a determination
indicating whether proposed services are preauthorized on or before
the calendar day after the date of request by the physician or
health care provider.
(f) 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 standard
time Monday through Friday on each day that is not a legal holiday
and between 9 a.m. and noon central standard 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 standard time Monday through
Friday and after noon central standard time on Saturday, Sunday,
and legal holidays and have the capability to respond to each call
on or before the calendar day after the date the call is received.
(g) 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.
(h) 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.
(i) The provisions of this section may not be waived,
voided, or nullified by contract.
Sec. 3G. VERIFICATION OF ELIGIBILITY FOR PAYMENT. (a) In
this section, "verification" means a reliable representation by an
insurer to a physician or 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.
(b) On the request of a physician or provider for
verification of the eligibility for payment of a particular medical
care or health care service the physician or provider proposes to
provide to a particular patient, the insurer shall inform the
physician or provider without delay whether the service, if
provided to that patient, is eligible for payment from the insurer
to the physician or provider and whether a certificate of
creditable coverage for the patient has been provided to the
insurer by the group policyholder under Section 11 of this article.
(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 standard time
Monday through Friday on each day that is not a legal holiday and
between 9 a.m. and noon central standard 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 standard time Monday through Friday and after
noon central standard time on Saturday, Sunday, and legal holidays
and have the capability to respond to each call on or before the
second calendar day after the date the call is received.
(d) If an insurer has provided a verification for 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 those services are provided to the insured
during the calendar month in which 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.
(e) An insurer may decline to determine eligibility for
payment if the insurer notifies the physician or provider who
requested the verification of the specific reason the determination
was not made.
(f) An insurer may establish a specific period during which
the verification is valid.
(g) The provisions of this section may not be waived,
voided, or nullified by contract.
Sec. 3H. COORDINATION OF PAYMENT. (a) An insurer may
require a physician or provider to retain in the physician's or
provider's records updated information concerning other health
benefit plan coverage and to provide the information to the insurer
on the applicable claim form. Except as provided by this
subsection, an insurer may not require a physician or provider to
investigate coordination of other health benefit plan coverage.
(b) Coordination of payment under this section does not
extend the period for determining whether a service is eligible for
payment under Section 3A(c), (d), (e), or (f) of this article.
(c) A physician or provider who submits a claim for
particular medical care or health care services to more than one
health maintenance organization or insurer shall provide written
notice on the claim submitted to each health maintenance
organization or insurer of the identity of each other health
maintenance organization or insurer with which a claim for the same
medical care or health care services is being filed. The
commissioner by rule may require claim elements under Section 3C of
this article that 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 must include the name
of the primary plan, adjustment code group, claims adjustment
reason, and amount paid as a covered claim by the primary plan.
That information is required for the claim submitted to the
secondary plan to be a clean claim. A preferred provider may file a
claim with the secondary plan only after the preferred provider has
received notice of the disposition of the claim by the primary plan.
(d) An insurer processing an electronic claim as a secondary
plan shall rely on the primary plan information submitted on the
claim by the preferred provider. If the secondary plan cannot
determine liability based on the information provided by the
physician or provider, the insurer may ask for additional
information from any source available, including the physician or
provider, the primary payor, or the insured, subject to Section 3A
of this article. Primary plan information may be submitted
electronically by the primary plan to the secondary payor.
(e) If an insurer is a secondary payor and pays a portion of
the claim that should have been paid by the insurer or health
maintenance organization that is the primary payor, the secondary
payor must first pursue recovery of the amount of the overpayment
from the primary payor. The secondary payor shall provide notice to
the preferred provider of the overpayment and that recovery of the
overpayment will be pursued from the primary payor. If the
secondary payor is unable to collect the amount of the overpayment
from the primary payor, the secondary payor may collect the amount
of the overpayment from the preferred provider under Section 3D of
this article. The time allowed to recover an overpayment from a
preferred provider under this subsection in accordance with Section
3D of this article begins on the date the secondary payor notifies
the preferred provider that recovery is being pursued from the
primary payor.
(f) The provisions of this section may not be waived,
voided, or nullified by contract.
Sec. 3I. VIOLATION OF CERTAIN CLAIMS PAYMENT PROVISIONS;
PENALTY. (a) This section applies only to a clean claim eligible
for payment.
(b) An insurer that pays a clean claim after the date the
insurer is required to pay the claim in accordance with Section 3A
of this article and before the 46th day after that date shall pay to
the physician or provider the contracted rate owed by the insurer
for the claim plus a penalty in the amount of the lesser of:
(1) 50 percent of the difference between the billed
charge and the contracted rate; or
(2) $100,000.
(c) An insurer that pays a clean claim on or after the 46th
day after the date the insurer is required to pay the claim in
accordance with Section 3A of this article and before the 91st day
after that date shall pay to the physician or provider the
contracted rate owed by the insurer for the claim plus a penalty in
the amount of the lesser of:
(1) 100 percent of the difference between the billed
charge and the contracted rate; or
(2) $200,000.
(d) An insurer that pays a clean claim on or after the 91st
day after the date the insurer is required to pay the claim in
accordance with Section 3A of this article shall pay to the
physician or provider the contracted rate owed by the insurer for
the claim plus a penalty in the amount of the lesser of:
(1) 100 percent of the difference between the billed
charge and the contracted rate plus simple interest on the amount of
that difference and the amount of the contracted rate at a rate of
18 percent annually, computed beginning on the 91st day after the
date the insurer is required to pay the claim and ending on the date
the payment is made; or
(2) $200,000.
(e) An insurer that pays only a portion of the amount of a
clean claim on or before the date the insurer is required to pay the
claim in accordance with Section 3A of this article and pays any
portion of the balance of the contracted rate owed by the insurer
for the claim before the 46th day after that date shall pay to the
physician or provider, in addition to the contracted rate owed by
the insurer for the claim, a penalty in the amount of 50 percent of
the amount paid after the date the insurer is required to pay the
claim and before the 46th day after that date. A penalty under this
subsection may not exceed $100,000.
(f) An insurer that pays only a portion of the amount of a
clean claim on or before the date the insurer is required to pay the
claim in accordance with Section 3A of this article and pays any
portion of the balance of the contracted rate owed by the insurer
for the claim on or after the 46th day after that date and before the
91st day after that date shall pay to the physician or provider, in
addition to the contracted rate owed by the insurer for the claim, a
penalty in the amount of 100 percent of the amount paid after the
date the insurer is required to pay the claim and before the 91st
day after that date. A penalty under this subsection may not exceed
$200,000.
(g) An insurer that pays only a portion of the amount of a
clean claim on or before the date the insurer is required to pay the
claim in accordance with Section 3A of this article and does not pay
the balance of the contracted rate owed by the insurer for the claim
before the 91st day after that date shall pay to the physician or
provider, in addition to the contracted rate owed by the insurer for
the claim, a penalty in the amount of 100 percent of the amount that
remains unpaid on the 91st day after the date the insurer is
required to pay the claim plus simple interest on the amount of that
difference and the amount of the contracted rate at a rate of 18
percent annually, computed beginning on the 91st day after the date
the insurer is required to pay the claim and ending on the date of
payment. A penalty under this subsection may not exceed $300,000.
(h) An insurer is not liable for a penalty under this
section if:
(1) in the case of an underpayment, the physician or
provider fails to notify the insurer of the underpayment not later
than the 180th day after the date the underpayment is received; or
(2) 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 business operations of the
insurer as determined under guidelines established by the
commissioner by rule.
(i) An insurer that pays a penalty under this section shall
clearly indicate on the explanation of benefits statement or other
written documentation in the manner prescribed by the commissioner
by rule the amount of the contracted rate paid and the amount paid
as a penalty.
Sec. 3J. AUTHORITY OF ATTORNEY GENERAL. (a) In addition to
any other remedy available for a violation of this article, the
attorney general may take action and seek remedies available under
Section 15, Article 21.21, of this code and Sections 17.58, 17.60,
17.61, and 17.62, Business & Commerce Code, for a violation of
Section 3A or 7 of this article.
(b) If the attorney general has good cause to believe that a
physician or provider has failed in good faith to repay an insurer
under Section 3D of this article, the attorney general may:
(1) bring an action to compel the physician or
provider to repay the insurer;
(2) on the finding of a court that the physician or
provider has violated Section 3D, recover a civil penalty of not
more than the greater of $1,000 or two times the amount in dispute
for each violation; and
(3) recover court costs and attorney's fees.
(c) If the attorney general has good cause to believe that a
physician or provider has improperly used or disclosed information
received by the physician or provider under Section 3E of this
article, the attorney general may:
(1) bring an action seeking an injunction against the
physician or provider to restrain the improper use or disclosure of
information;
(2) on the finding of a court that the physician or
provider has violated Section 3E, recover a civil penalty of not
more than $1,000 for each negligent violation or $10,000 for each
intentional violation; and
(3) recover court costs and attorney's fees.
Sec. 10. SERVICES PROVIDED BY CERTAIN PHYSICIANS AND HEALTH
CARE PROVIDERS. The provisions of this article relating to prompt
payment by an insurer of a physician or health care provider and to
verification of medical care or health care services apply to a
physician or health care provider who:
(1) is not a preferred provider under a preferred
provider benefit plan; 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. TERMS OF ENROLLEE ELIGIBILITY. A contract between
an insurer and a group policyholder must provide that:
(1) the group policyholder will provide the insurer
with a copy of an insured's certificate of creditable coverage, if
applicable, at the time the insured becomes eligible for coverage
under the policy;
(2) the group policyholder is liable for an individual
insured's premiums for the month in which the policyholder notifies
the insurer that the individual is no longer part of the group
eligible for coverage under the policy; and
(3) the individual remains covered under the policy
during that month.
Sec. 12. PROOF OF COVERAGE. A card or other similar
document issued to an individual insured as proof of coverage must:
(1) indicate that the issuer of the coverage is
regulated under this code and subject to the prompt payment
provisions of this article; and
(2) display:
(A) the first date on which the individual's
coverage became effective; or
(B) a toll-free number a physician or provider
may use to obtain that date.
Sec. 13. CONFLICT WITH OTHER LAW. To the extent of any
conflict between this article and Article 21.52C or Article 21.58A
of this code, this article controls.
SECTION 3. Subchapter F, Chapter 843, Insurance Code, as
effective June 1, 2003, is amended by adding Sections 843.209 and
843.210 to read as follows:
Sec. 843.209. TERMS OF ENROLLEE ELIGIBILITY. A contract
between a health maintenance organization and a group contract
holder must provide that:
(1) the group contract holder will provide the health
maintenance organization with a copy of an enrollee's certificate
of creditable coverage, if applicable, at the time the enrollee
becomes eligible for coverage under the contract;
(2) the group contract holder is liable for an
enrollee's premiums for the month in which the contract holder
notifies the health maintenance organization that the enrollee is
no longer part of the group eligible for coverage by the contract;
and
(3) the enrollee remains covered by the contract
during that month.
Sec. 843.210. PROOF OF COVERAGE. A card or other similar
document issued to an enrollee as proof of coverage must:
(1) indicate that the health maintenance organization
is regulated under this code and subject to the prompt payment
provisions of Subchapter J; and
(2) display:
(A) the first date on which the enrollee's
coverage became effective; or
(B) a toll-free number a physician or provider
may use to obtain that date.
SECTION 4. 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 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 a 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, or other business
operations; and
(2) disclose the information to a government agency
involved in the regulation of health care or health coverage.
(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) Nothing in this section may be construed to require a
health maintenance organization to provide specific information
that would violate any applicable copyright law or licensing
agreement. However, the health maintenance organization must
supply, in lieu of any information withheld on the basis of
copyright law or a licensing agreement, a summary of information
that will allow a reasonable person with sufficient training,
experience, and competence in claims processing to determine the
payment to be made under the terms of the contract for covered
services provided to enrollees.
(e) The provisions of this section may not be waived,
voided, or nullified by contract.
SECTION 5. 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 claim by a physician or provider, other than an
institutional provider, is a "clean claim" if the claim is
submitted using Centers for Medicare and Medicaid Services Form
1500 or a successor to that form developed by the National Uniform
Claim Committee or its successor and adopted by the commissioner by
rule for the purposes of this subsection and contains the
information required by the commissioner by rule for the purposes
of this subsection entered into the appropriate fields on the form
in the manner prescribed.
(c) A claim by an institutional provider is a "clean claim"
if the claim is submitted using Centers for Medicare and Medicaid
Services Form UB-92 or a successor to that form developed by the
National Uniform Billing Committee or its successor and adopted by
the commissioner by rule for the purposes of this subsection and
contains the information required by the commissioner by rule for
the purposes of this subsection entered into the appropriate fields
on the form in the manner prescribed.
(d) The commissioner may not require any data element for
electronically filed claims that is not required to comply with
federal law.
(e) A health maintenance organization and a physician or
provider may agree by contract that a claim that uses fewer elements
than those required by the commissioner is a clean claim for
purposes of this section.
(f) A 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 6. 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 under this subchapter to a health
maintenance organization 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. [A physician or provider 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) If a physician or provider fails to submit a claim in
compliance with Subsection (a), the physician or provider forfeits
the right to payment unless the failure to submit the claim in
compliance with Subsection (a) is a result of a catastrophic event
that substantially interferes with the normal business operations
of the physician or provider as determined under guidelines
established by the commissioner by rule.
(c) A health maintenance organization shall accept as proof
of timely filing information from another health benefit plan
issuer showing that the physician or provider submitted the claim
to the health benefit plan issuer in compliance with Subsection
(a).
(d) The period for submitting a claim under this section may
be extended by contract.
(e) A physician or provider may not submit a duplicate claim
for payment before the 46th day after the date the original claim
was submitted.
(f) The commissioner shall adopt rules under which a health
maintenance organization may determine whether a claim is a
duplicate claim. [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 7. 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 or 843.340, not [Not] later than the
45th day after the date on which a health maintenance organization
receives a clean claim submitted by [from] a physician or provider,
the health maintenance organization shall make a determination of
whether the claim is eligible for payment and:
(1) if the health maintenance organization determines
the entire claim is eligible for payment, 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 eligible for payment, 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 eligible for payment, notify the physician or
provider in writing why the claim will not be paid.
SECTION 8. 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 physician or provider to determine eligibility for
payment, the health maintenance organization, not later than the
30th day after the date the health maintenance organization
receives a clean claim, shall request in writing that the physician
or provider provide any additional information the health
maintenance organization desires in good faith 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.
(c) The health maintenance organization may not request
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 the physician or provider.
(d) If a health maintenance organization requests
additional information under this section, the period for
determining whether the claim is eligible for payment is extended
by one day for each day after the date the health maintenance
organization requests the additional information and before the
date the health maintenance organization receives the additional
information.
(e) A health maintenance organization may not make more than
one request under this section in connection with a claim.
(f) The commissioner shall adopt rules to identify a
submission by a physician or provider that includes additional
information requested by the health maintenance organization.
SECTION 9. 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 10. 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 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 45th day after the date on which the health maintenance
organization receives the claim from a physician or provider and
shall clearly indicate on the explanation of benefits statement in
the manner prescribed by the commissioner by rule that the claim is
being paid subject to the completion of an audit.
(b) The health maintenance organization must complete the
audit on or before the 180th day after the date the health
maintenance organization receives the claim.
(c) If the health maintenance organization requests
additional information needed 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 the
claim's related episode of care.
(d) The health maintenance organization may not request as
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 physician or provider.
(e) If a 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 as required by Subdivision (1), recover the amount of
the claim under Section 843.3401 and reasonable attorney's fees and
court costs in any action to recover payment under that section.
[Following completion of the audit, any additional payment due a
physician or provider or any refund due the health maintenance
organization shall be made not later than the 30th day after the
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 11. Subchapter J, Chapter 843, Insurance Code, as
effective June 1, 2003, is amended by adding Sections 843.3401,
843.3404, and 843.3405 to read as follows:
Sec. 843.3401. OVERPAYMENT. (a) Except as provided by
Subsection (b), a health maintenance organization may deduct the
amount of an overpayment from any amount owed by the health
maintenance organization to the physician or provider, or may
otherwise recover the amount of overpayment 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 exercises a right of appeal
available under the physician's or provider's contract with the
health maintenance organization with respect to an alleged
overpayment, the health maintenance organization may not recover
the amount overpaid until the physician's or provider's right of
appeal is exhausted.
Sec. 843.3404. VERIFICATION OF ELIGIBILITY FOR PAYMENT.
(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.
(b) On the request of a physician or provider for
verification of the payment eligibility of a particular health care
service the 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, is eligible for payment from the health
maintenance organization to the physician or provider and whether a
certificate of creditable coverage for the patient has been
provided to the health maintenance organization by the group
contract holder under Section 843.209.
(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 standard time Monday through
Friday on each day that is not a legal holiday and between 9 a.m. and
noon central standard 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 standard time Monday through
Friday and after noon central standard time on Saturday, Sunday,
and legal holidays and have the capability to respond to each call
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 health maintenance
organization notifies the physician or 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.
(f) If a health maintenance organization has provided a
verification for health care services, the health maintenance
organization may not deny or reduce payment to the physician or
provider for those health care services if those services are
provided to the enrollee during the calendar month in which 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. 843.3405. PREAUTHORIZATION OF HEALTH CARE SERVICES.
(a) In this section, "preauthorization" means a determination by
the health maintenance organization that the 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 to
each participating physician or provider, not later than the 10th
working 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) Not later than the third day after the date a health
maintenance organization receives a request from a participating
physician or provider for preauthorization, the health maintenance
organization shall review and issue by mail or otherwise a
determination indicating whether the proposed services are
preauthorized.
(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 and issue a length of stay for the
admission into a health care facility based on the health
maintenance organization's written medically accepted screening
criteria and review procedures, considering the recommendation of
the patient's physician or provider. 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 and issue a
determination indicating whether proposed services are
preauthorized on or before the calendar day after the date 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 standard time Monday through
Friday on each day that is not a legal holiday and between 9 a.m. and
noon central standard 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 standard time Monday through
Friday and after noon central standard time on Saturday, Sunday,
and legal holidays and have the capability to respond to each call
on or before the calendar day after the date the call was 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.
SECTION 12. 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 clean claims
payment processes must:
(1) use nationally recognized, generally accepted
Current Procedural Terminology codes, notes, and guidelines,
including all relevant modifiers, if available; and
(2) be consistent with the nationally recognized,
noncommercial system of bundling edits and logic known as the
National Correct Coding Initiative and available from the National
Technical Information Service. [A health maintenance 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 13. Subchapter J, Chapter 843, Insurance Code, as
effective June 1, 2003, is amended by adding Section 843.3411 to
read as follows:
Sec. 843.3411. COORDINATION OF PAYMENT. (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 health benefit plan coverage and to provide the
information to the health maintenance organization on the
applicable claim form. Except as provided by this subsection, a
health maintenance organization may not require a physician or
provider to investigate coordination of other health benefit plan
coverage.
(b) Coordination of payment under this section does not
extend the period for determining whether a service is eligible for
payment under Section 843.338, 843.3385, 843.339, or 843.340.
(c) A physician or provider who submits a claim for
particular medical care or health care services to more than one
health maintenance organization or insurer shall provide written
notice on the claim submitted to each health maintenance
organization or insurer of the identity of each other health
maintenance organization or insurer with which a claim for the same
medical care or health care services is being filed. The
commissioner by rule may require claim elements under Section
843.336 that facilitate coordination of payment. A claim
electronically submitted by the physician or provider for covered
services or benefits for which there is other coverage that
contains a coordination of benefits provision must include the name
of the primary plan, adjustment code group, claims adjustment
reason, and amount paid as a covered claim by the primary plan.
That information is required for the claim submitted to the
secondary plan to be a clean claim. A physician or provider may
file a claim with the secondary plan only after the physician or
provider has received notice of the disposition of the claim by the
primary plan.
(d) A health maintenance organization processing an
electronic claim as a secondary plan shall rely on the primary plan
information submitted on the claim by the physician or provider. If
the secondary plan cannot determine liability based on the
information provided by the physician or provider, the health
maintenance organization may ask for additional information from
any source available, including the physician or provider, the
primary payor, or the enrollee, subject to Sections 843.338,
843.3385, 843.339, and 843.340. Primary plan information may be
submitted electronically by the primary plan to the secondary
payor.
(e) If a health maintenance organization is a secondary
payor and pays a portion of the claim that should have been paid by
the insurer or health maintenance organization that is the primary
payor, the secondary payor must first pursue recovery of the amount
of the overpayment from the primary payor. The secondary payor
shall provide notice to the physician or provider of the
overpayment and that recovery of the overpayment will be pursued
from the primary payor. If the secondary payor is unable to collect
the amount of the overpayment from the primary payor, the secondary
payor may collect the amount of the overpayment from the physician
or provider under Section 843.3401. The time allowed to recover an
overpayment from a physician or provider under this subsection in
accordance with Section 843.3401 begins on the date the secondary
payor notifies the physician or provider that recovery is being
pursued from the primary payor.
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) This section
applies only to a clean claim eligible for payment.
(b) A health maintenance organization that pays a clean
claim after the date the health maintenance organization is
required to pay the claim in accordance with this subchapter and
before the 46th day after that date shall pay to the physician or
provider the contracted rate owed by the health maintenance
organization for the claim plus a penalty in the amount of the
lesser of:
(1) 50 percent of the difference between the billed
charge and the contracted rate; or
(2) $100,000.
(c) A health maintenance organization that pays a clean
claim on or after the 46th day after the date the health maintenance
organization is required to pay the claim in accordance with this
subchapter and before the 91st day after that date shall pay to the
physician or provider the contracted rate owed by the health
maintenance organization for the claim plus a penalty in the amount
of the lesser of:
(1) 100 percent of the difference between the billed
charge and the contracted rate; or
(2) $200,000.
(d) A health maintenance organization that pays a clean
claim on or after the 91st day after the date the health maintenance
organization is required to pay the claim in accordance with this
subchapter shall pay to the physician or provider the contracted
rate owed by the health maintenance organization for the claim plus
a penalty in the amount of the lesser of:
(1) 100 percent of the difference between the billed
charge and the contracted rate plus simple interest on the amount of
that difference and the amount of the contracted rate at a rate of
18 percent annually, computed beginning on the 91st day after the
date the health maintenance organization is required to pay the
claim and ending on the date the payment is made; or
(2) $200,000.
(e) A health maintenance organization that pays only a
portion of the amount of a clean claim on or before the date the
health maintenance organization is required to pay the claim in
accordance with this subchapter and pays any portion of the balance
of the contracted rate owed by the health maintenance organization
for the claim before the 46th day after that date shall pay to the
physician or provider, in addition to the contracted rate owed by
the health maintenance organization for the claim, a penalty in the
amount of 50 percent of the amount paid after the date the health
maintenance organization is required to pay the claim and before
the 46th day after that date. A penalty under this subsection may
not exceed $100,000.
(f) A health maintenance organization that pays only a
portion of the amount of a clean claim on or before the date the
health maintenance organization is required to pay the claim in
accordance with this subchapter and pays any portion of the balance
of the contracted rate owed by the health maintenance organization
for the claim on or after the 46th day after that date and before the
91st day after that date shall pay to the physician or provider, in
addition to the contracted rate owed by the health maintenance
organization for the claim, a penalty in the amount of 100 percent
of the amount paid after the date the health maintenance
organization is required to pay the claim and before the 91st day
after that date. A penalty under this subsection may not exceed
$200,000.
(g) A health maintenance organization that pays only a
portion of the amount of a clean claim on or before the date the
health maintenance organization is required to pay the claim in
accordance with this subchapter and does not pay the balance of the
contracted rate owed by the health maintenance organization for the
claim before the 91st day after that date shall pay to the physician
or provider, in addition to the contracted rate owed by the health
maintenance organization for the claim, a penalty in the amount of
100 percent of the amount that remains unpaid on the 91st day after
the date the health maintenance organization is required to pay the
claim plus simple interest on the amount of that difference and the
amount of the contracted rate at a rate of 18 percent annually,
computed beginning on the 91st day after the date the health
maintenance organization is required to pay the claim and ending on
the date of payment. A penalty under this subsection may not exceed
$300,000.
(h) A health maintenance organization is not liable for a
penalty under this section if:
(1) in the case of an underpayment, the physician or
provider fails to notify the health maintenance organization of the
underpayment not later than the 180th day after the date the
underpayment is received; or
(2) the failure to pay the claim in accordance with
this subchapter is a result of a catastrophic event that
substantially interferes with the business operations of the health
maintenance organization as determined under guidelines
established by the commissioner by rule.
(i) A health maintenance organization that pays a penalty
under this section shall clearly indicate on the explanation of
benefits statement or other written documentation 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, 843.3385, 843.339, or 843.340 in processing more
than two percent of clean claims submitted to the health
maintenance organization by participating physicians or providers
who are institutional providers or more than two percent of clean
claims submitted to the health maintenance organization by
participating physicians or providers who are not institutional
providers 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, 843.3385, 843.339, or 843.340.
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 843.345, Insurance Code, as effective
June 1, 2003, is amended to read as follows:
Sec. 843.345. EXCEPTIONS. 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 17. Subchapter J, Chapter 843, Insurance Code, as
effective June 1, 2003, is amended by adding Sections 843.347,
843.348, and 843.349 to read as follows:
Sec. 843.347. 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. 843.348. CONFLICT WITH OTHER LAW. To the extent of any
conflict between this subchapter and Article 21.52C or Article
21.58A, this subchapter controls.
Sec. 843.349. WAIVER PROHIBITED. Except as provided by
Section 843.337(d), the provisions of this subchapter may not be
waived, voided, or nullified by contract.
SECTION 18. Subchapter N, Chapter 843, Insurance Code, as
effective June 1, 2003, is amended by adding Section 843.465 to read
as follows:
Sec. 843.465. AUTHORITY OF ATTORNEY GENERAL. (a) In
addition to any other remedy available for a violation of this
chapter, the attorney general may take action and seek remedies
available under Section 15, Article 21.21, and Sections 17.58,
17.60, 17.61, and 17.62, Business & Commerce Code, for a violation
of Section 843.281, 843.363, or 843.314, or Subchapter J.
(b) If the attorney general has good cause to believe that a
physician or provider has failed in good faith to repay a health
maintenance organization under Section 843.3401, the attorney
general may:
(1) bring an action to compel the physician or
provider to repay the health maintenance organization;
(2) on the finding of a court that the physician or
provider has violated Section 843.3401, recover a civil penalty of
not more than the greater of $1,000 or two times the amount in
dispute for each violation; and
(3) recover court costs and attorney's fees.
(c) If the attorney general has good cause to believe that a
physician or provider is or has improperly used or disclosed
information received by the physician or provider under Section
843.319, the attorney general may:
(1) bring an action seeking an injunction against the
physician or provider to restrain the improper use or disclosure of
information;
(2) on the finding of a court that the physician or
provider has violated Section 843.319, recover a civil penalty of
not more than $1,000 for each negligent violation or $10,000 for
each intentional violation; and
(3) recover court costs and attorney's fees.
SECTION 19. 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 feasibility of and factors involved in
standardization of 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) an exchange operating under Chapter 942 of this
code;
(6) a health maintenance organization operating under
Chapter 843 of this code;
(7) a multiple employer welfare arrangement that holds
a certificate of authority under Chapter 846 of this code; or
(8) 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.
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) An issuer of a health benefit plan is not required to
require a health care professional or facility to comply with the
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 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) This section expires September 1, 2007.
Sec. 3. 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. 4. 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 20. 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
Section 2001.034(a), Government Code, to use the emergency rules
procedures.
SECTION 21. (a) Except as provided by this section, the
changes in law made by this Act apply only to services provided by a
physician or health care provider, and payment for those services,
on or after the 60th day after the effective date of this Act.
Services provided before the 60th day after the effective date of
this Act, and payment for those services, 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) The changes in law made by this Act do not apply to
services provided by a physician or health care provider, and
payment for those services, under a contract with an insurer or
health maintenance organization entered into before the 60th day
after the effective date of this Act. Provision of and payment for
those services 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 22. This Act takes effect immediately 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.