79R4680 PB-F
By: Thompson H.B. No. 2665
A BILL TO BE ENTITLED
AN ACT
relating to restrictions on balance billing by certain health care
providers; providing an administrative penalty.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 1204.051, Insurance Code, as effective
April 1, 2005, is amended to read as follows:
Sec. 1204.051. DEFINITIONS. (a) In this subchapter:
(1) "Covered person" means a person who is insured or
covered by a health insurance policy or is a participant in an
employee benefit plan. The term includes:
(A) a person covered by a health insurance policy
because the person is an eligible dependent; and
(B) an eligible dependent of a participant in an
employee benefit plan.
(2) "Employee benefit plan" or "plan" means a plan,
fund, or program established or maintained by an employer, an
employee organization, or both, to the extent that it provides,
through the purchase of insurance or otherwise, health care
services to employees, participants, or the dependents of employees
or participants.
(2-a) "Facility" means a health care facility licensed
to operate in this state as:
(A) an ambulatory surgical center under Chapter
243, Health and Safety Code; or
(B) a hospital under Chapter 241, Health and
Safety Code.
(2-b) "Facility-based physician or health care
provider" includes:
(A) a radiologist, an anesthesiologist, a
pathologist, a neonatologist, a hospitalist, or an emergency
department physician or health care provider:
(i) to whom the facility has granted
clinical privileges; and
(ii) who provides services to patients of
the facility under those clinical privileges;
(B) a physician or health care provider who
provides physician or provider services to a facility's patients in
a clinical area if the facility grants clinical privileges on a
closed staff basis for the clinical area; and
(C) a person or entity other than a facility,
physician, or health care provider that provides health care
services or supplies directly to patients under an agreement with
the facility.
(3) "Health care provider" means a person who provides
health care services under a license, certificate, registration, or
other similar evidence of regulation issued by this or another
state of the United States.
(4) "Health care service" means a service to diagnose,
prevent, alleviate, cure, or heal a human illness or injury that is
provided to a covered person by a physician or other health care
provider.
(5) "Health insurance policy" means an individual,
group, blanket, or franchise insurance policy, or an insurance
agreement, that provides reimbursement or indemnity for health care
expenses incurred as a result of an accident or sickness.
(6) "Insurer" means an insurance company,
association, or organization authorized to engage in business in
this state under Chapter 841, 861, 881, 882, 883, 884, 885, 886,
887, 888, 941, 942, or 982.
(7) "Person" means an individual, association,
partnership, corporation, or other legal entity.
(8) "Physician" means an individual licensed to
practice medicine in this or another state of the United States.
(b) For purposes of this chapter, a member of the medical
staff of a health care facility is not a "facility-based health care
provider" as described by Subdivision (2-b)(B) solely because the
member is appointed to the facility's medical staff and granted
clinical privileges by the facility.
SECTION 2. Section 1204.052, Insurance Code, as effective
April 1, 2005, is amended to read as follows:
Sec. 1204.052. APPLICABILITY TO CERTAIN PLANS OR
PROGRAMS. (a) This subchapter applies to:
(1) an employee benefit plan, to the extent not
preempted by the Employee Retirement Income Security Act of 1974
(29 U.S.C. Section 1001 et seq.);
(2) benefit programs under Chapters 1551 and 1601, to
the extent that the benefit programs are self-insuring; and
(3) insurance coverage provided under Chapter 1575.
(b) This subchapter does not apply to a facility-based
physician or health care provider.
SECTION 3. Chapter 1204, Insurance Code, as effective April
1, 2005, is amended by adding Subchapter G to read as follows:
SUBCHAPTER G. RESTRICTIONS ON CERTAIN BALANCE BILLING
Sec. 1204.301. APPLICABILITY OF DEFINITIONS. In this
subchapter, terms defined by Section 1204.051 have the meanings
assigned by that section.
Sec. 1204.302. APPLICABILITY TO CERTAIN PLANS OR
PROGRAMS. This subchapter applies to:
(1) an employee benefit plan, to the extent not
preempted by the Employee Retirement Income Security Act of 1974
(29 U.S.C. Section 1001 et seq.);
(2) benefit programs under Chapters 1551 and 1601, to
the extent that the benefit programs are self-insuring; and
(3) insurance coverage provided under Chapters 1575
and 1579.
Sec. 1204.303. RESTRICTIONS ON BALANCE BILLING. A
facility-based physician or health care provider may not, in
connection with the provision of health care services to a covered
person:
(1) bill the covered person for any amount above the
applicable copayment, coinsurance, or deductible for the health
care services if the facility-based physician or health care
provider accepts the usual and customary rate as defined by the
health insurance policy or plan subject to this subchapter under
Section 1204.302 or an agreed rate of payment for health care
services from the insurer or plan subject to this subchapter under
Section 1204.302; or
(2) bill the covered person any amount above the
applicable copayment, coinsurance, or deductible for the health
care services if the facility-based physician or health care
provider fails to provide the disclosure required under Section
105.002(a)(3), Occupations Code.
SECTION 4. Section 1271.001, Insurance Code, as effective
April 1, 2005, is amended to read as follows:
Sec. 1271.001. [APPLICABILITY OF] DEFINITIONS. (a) In
this chapter:
(1) "Facility" means a health care facility licensed
to operate in this state as:
(A) an ambulatory surgical center under Chapter
243, Health and Safety Code; or
(B) a hospital under Chapter 241, Health and
Safety Code.
(2) "Facility-based physician or provider" includes:
(A) a radiologist, an anesthesiologist, a
pathologist, a neonatologist, a hospitalist, or an emergency
department physician or provider:
(i) to whom the facility has granted
clinical privileges; and
(ii) who provides services to patients of
the facility under those clinical privileges;
(B) a physician or provider who provides
physician or provider services to a facility's patients in a
clinical area if the facility grants clinical privileges on a
closed staff basis for the clinical area; and
(C) a person other than a facility, physician, or
provider that provides health care services or supplies directly to
patients under an agreement with the facility.
(b) For purposes of this chapter, a member of the medical
staff of a health care facility is not a "facility-based provider"
as described by Subsection (a)(2)(B) solely because the member is
appointed to the facility's medical staff and granted clinical
privileges by the facility.
(c) In this chapter, terms defined by Section 843.002 have
the meanings assigned by that section.
SECTION 5. Section 1271.055, Insurance Code, as effective
April 1, 2005, is amended by adding Subsections (d) and (e) to read
as follows:
(d) A facility that is a member of a health maintenance
organization delivery network must make a reasonable attempt to
provide enrollees with facility-based physicians or providers who
are members of the network while the enrollee is receiving services
from the facility.
(e) If professional services are provided to an enrollee by
a facility-based physician or provider who is not a member of the
health maintenance organization delivery network, on the health
maintenance organization's payment to the facility-based physician
or provider at the usual and customary rate as defined by the health
care plan or at an agreed rate for covered services, the enrollee is
not liable for any further payments to the facility-based
physician or provider except for payment of any applicable
copayments, coinsurance, or deductibles for the covered services.
SECTION 6. Section 1272.001(a), Insurance Code, as
effective April 1, 2005, is amended by adding Subdivisions (4-a)
and (4-b) to read as follows:
(4-a) "Facility" means a health care facility licensed
to operate in this state as:
(A) an ambulatory surgical center under Chapter
243, Health and Safety Code; or
(B) a hospital under Chapter 241, Health and
Safety Code.
(4-b) "Facility-based physician or provider"
includes:
(A) a radiologist, an anesthesiologist, a
pathologist, a neonatologist, a hospitalist, or an emergency
department physician or provider:
(i) to whom the facility has granted
clinical privileges; and
(ii) who provides services to patients of
the facility under those clinical privileges;
(B) a physician or provider who provides
physician or provider services to a facility's patients in a
clinical area if the facility grants clinical privileges on a
closed staff basis for the clinical area; and
(C) a person other than a facility, physician, or
provider that provides health care services or supplies directly to
patients under an agreement with the facility.
SECTION 7. Section 1272.001, Insurance Code, as effective
April 1, 2005, is amended by adding Subsection (c) to read as
follows:
(c) For purposes of this chapter, a member of the medical
staff of a health care facility is not a "facility-based provider"
as described by Subsection (a)(4-b)(B) solely because the member is
appointed to the facility's medical staff and granted clinical
privileges by the facility.
SECTION 8. Section 1272.301, Insurance Code, as effective
April 1, 2005, is amended by adding Subsection (e) to read as
follows:
(e) If a limited provider network or delegated entity
provides or arranges to provide services to enrollees through a
facility-based physician or provider who is not a member of the
health maintenance organization delivery network, on payment by the
health maintenance organization of the usual and customary rate as
defined by the health care plan or an agreed rate for covered
services, the enrollee is not liable for any further payments to the
facility-based physician or provider except for payment of any
applicable copayments, coinsurance, or deductibles for the covered
services.
SECTION 9. (a) Section 1301.001, Insurance Code, as
effective April 1, 2005, is amended to read as follows:
Sec. 1301.001. DEFINITIONS. (a) In this chapter:
(1) "Facility" means a health care facility licensed
to operate in this state as:
(A) an ambulatory surgical center under Chapter
243, Health and Safety Code; or
(B) a hospital under Chapter 241, Health and
Safety Code.
(2) "Facility-based physician or health care
provider" includes:
(A) a radiologist, an anesthesiologist, a
pathologist, a neonatologist, a hospitalist, or an emergency
department physician or health care provider:
(i) to whom the facility has granted
clinical privileges; and
(ii) who provides services to patients of
the facility under those clinical privileges;
(B) a physician or health care provider who
provides physician or provider services to a facility's patients in
a clinical area if the facility grants clinical privileges on a
closed staff basis for the clinical area; and
(C) a person or entity other than a facility,
physician, or health care provider that provides health care
services or supplies directly to patients under an agreement with
the facility.
(3) "Health care provider" means a practitioner,
institutional provider, or other person or organization that
furnishes health care services and that is licensed or otherwise
authorized to practice in this state. The term does not include a
physician.
(4) [(2)] "Health insurance policy" means a group or
individual insurance policy, certificate, or contract providing
benefits for medical or surgical expenses incurred as a result of an
accident or sickness.
(5) [(3)] "Hospital" means a licensed public or
private institution as defined by Chapter 241, Health and Safety
Code, or Subtitle C, Title 7, Health and Safety Code.
(6) [(4)] "Institutional provider" means a hospital,
nursing home, or other medical or health-related service facility
that provides care for the sick or injured or other care that may be
covered in a health insurance policy.
(7) [(5)] "Insurer" means a life, health, and accident
insurance company, health and accident insurance company, health
insurance company, or other company operating under Chapter 841,
842, 884, 885, 982, or 1501, that is authorized to issue, deliver,
or issue for delivery in this state health insurance policies.
(8) [(6)] "Physician" means a person licensed to
practice medicine in this state.
(9) [(7)] "Practitioner" means a person who practices
a healing art and is a practitioner described by Section 1451.001 or
1451.101.
(10) "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.
(11) [(8)] "Preferred provider" means a physician or
health care provider, or an organization of physicians or health
care providers, who contracts with an insurer to provide medical
care or health care to insureds covered by a health insurance
policy.
(12) [(9)] "Preferred provider benefit plan" means a
benefit plan in which an insurer provides, through its health
insurance policy, for the payment of a level of coverage that is
different from the basic level of coverage provided by the health
insurance policy if the insured person uses a preferred provider.
(13) [(10)] "Service area" means a geographic area or
areas specified in a health insurance policy or preferred provider
contract in which a network of preferred providers is offered and
available.
(14) "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.
(b) For purposes of this chapter, a member of the medical
staff of a health care facility is not a "facility-based health care
provider" as described by Subsection (a)(2)(B) solely because the
member is appointed to the facility's medical staff and granted
clinical privileges by the facility.
(b) Section 1, Chapter 214, Acts of the 78th Legislature,
Regular Session, 2003, is repealed.
(c) In accordance with Section 311.031(c), Government Code,
which gives effect to a substantive amendment enacted by the same
legislature that codifies the amended statute, the text of Section
1301.001, Insurance Code, as set out in this section, gives effect
to changes made by Section 1, Chapter 214, Acts of the 78th
Legislature, Regular Session, 2003.
(d) To the extent of any conflict, this section prevails
over another Act of the 79th Legislature, Regular Session, 2005,
relating to nonsubstantive additions and corrections in enacted
codes.
SECTION 10. Subchapter D, Chapter 1301, Insurance Code, as
effective April 1, 2005, is amended by adding Section 1301.164 to
read as follows:
Sec. 1301.164. BALANCE BILLING PROHIBITED. If health care
services are provided to an insured in a facility that is part of
the preferred provider network by a facility-based physician or
health care provider who is not a preferred provider, on payment to
the physician or provider by the insurer of the usual and customary
rate as defined by the health insurance policy or the agreed rate
for covered services, the insured is not liable for further
payments to the facility-based physician or health care provider
except for payment of any applicable copayments, coinsurance, or
deductibles owed by the insured for the covered services.
SECTION 11. Section 105.001, Occupations Code, is amended
to read as follows:
Sec. 105.001. DEFINITIONS [DEFINITION]. In this chapter:
(1) "Facility-based physician or health care
provider" has the meaning assigned by Section 1301.001, Insurance
Code.
(2) "Health[, "health] care provider" means a person
who furnishes services under a license, certificate, registration,
or other authority issued by this state or another state to
diagnose, prevent, alleviate, or cure a human illness or injury.
(3) "Licensing authority" means a department,
commission, board, office, or other agency of this state that
issues a license, certificate, registration, or other authority to
regulate under this code the professional practice of a health care
provider.
SECTION 12. Section 105.002, Occupations Code, is amended
to read as follows:
Sec. 105.002. UNPROFESSIONAL CONDUCT. (a) A health care
provider commits unprofessional conduct if the health care
provider, in connection with the provider's professional
activities or provision of professional services:
(1) knowingly presents or causes to be presented a
false or fraudulent claim for the payment of a loss under an
insurance policy; [or]
(2) knowingly prepares, makes, or subscribes to any
writing, with intent to present or use the writing, or to allow it
to be presented or used, in support of a false or fraudulent claim
under an insurance policy; or
(3) if the health care provider is not a member of the
network of the contracted health maintenance organization,
insurer, or preferred provider organization to which the facility
at which the services are provided belongs, fails to disclose in
writing to a patient before providing professional services that:
(A) the health care provider is not a member of
the network;
(B) the patient may be required to file a claim
for payment of the services directly with the health maintenance
organization, insurer, or preferred provider organization; and
(C) the amount the patient may receive from the
health maintenance organization, insurer, or preferred provider
organization is based on the usual and customary rate as defined by
the health care plan or health insurance policy and the patient may
be responsible for any charges over that amount.
(b) A facility-based physician or health care provider
commits unprofessional conduct if the facility-based physician or
health care provider, in connection with professional activities:
(1) bills a patient for any amount above the
applicable copayment, coinsurance, or deductible for covered
services if the facility-based physician or health care provider
accepts the usual and customary rate as defined by the health care
plan or health insurance policy or an agreed rate of payment from
the health maintenance organization, preferred provider
organization, or insurer for health care services; or
(2) bills the patient any amount above the applicable
copayment, coinsurance, or deductible for covered services if the
facility-based physician or health care provider fails to provide
the disclosure required under Subsection (a)(3).
(c) In addition to other provisions of civil or criminal
law, commission of unprofessional conduct under Subsection (a) or
(b) constitutes cause for:
(1) the revocation or suspension by the appropriate
licensing authority of a provider's license, permit, registration,
certificate, or other authority;
(2) imposition by the appropriate licensing authority
of an administrative penalty in an amount not to exceed $500 for
each day of violation; or
(3) other appropriate disciplinary action.
SECTION 13. This Act applies only to an insurance policy,
certificate, or contract or an evidence of coverage delivered,
issued for delivery, or renewed on or after the effective date of
this Act. A policy, certificate, or contract or evidence of
coverage delivered, issued for delivery, or renewed before the
effective date of this Act is governed by the law as it existed
immediately before the effective date of this Act, and that law is
continued in effect for that purpose.
SECTION 14. (a) Section 105.002, Occupations Code, as
amended by this Act, applies only to conduct occurring on or after
the effective date of this Act.
(b) Conduct occurring before the effective date of this Act
is governed by the law in effect on the date that the conduct
occurred, and the former law is continued in effect for that
purpose.
SECTION 15. 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, 2005.