79R7006 AJA-F
By: Taylor H.B. No. 3371
A BILL TO BE ENTITLED
AN ACT
relating to investigation of fraudulent claims by certain insurers
and by health maintenance organizations.
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 by adding Subsection (k-1) to read as
follows:
(k-1) If, after receipt of an otherwise clean claim, an
insurer has a reasonable basis to suspect the claim is fraudulent,
not later than the 30th calendar day after the date the insurer
receives the claim or, if the insurer has requested an attachment
under Subsection (j) of this section, not later than the 15th day
after the date the insurer receives the attachment, the insurer may
submit a written request to the commissioner for an extension to
investigate whether the claim is fraudulent and to determine if the
claim is payable. The request must include the reason the insurer
has not completed the fraud investigation, the nature of the
investigation, the anticipated completion date of the
investigation, and the amount of any partial payment made on the
claim. A copy of the request must be sent to the claimant. On or
before the fifth day after the date the commissioner receives a
request under this subsection, the commissioner shall inform the
insurer whether the request has been approved and, if so, the
specific amount of time of the extension. The commissioner may
grant a request under this subsection only if the commissioner
determines that there is a good faith and articulable reason to
believe that the insurer is not obligated to pay some part or all of
the claim and the investigation could not reasonably be completed
before the insurer is otherwise required to determine whether the
claim is payable. The insurer must identify and pay all sums the
insurer is obligated to pay on the claim that are not subject to the
extension requested under this subsection. A request under this
subsection tolls the deadlines prescribed by Subsection (e) or (j)
of this section for determining whether the claim is payable until:
(1) the fifth day after the date on which the
commissioner denies the request; or
(2) the date specified by the commissioner in an order
approving the request.
SECTION 2. Subchapter J, Chapter 843, Insurance Code, is
amended by adding Section 843.3386 to read as follows:
Sec. 843.3386. FRAUD INVESTIGATION. (a) If, after receipt
of an otherwise clean claim, a health maintenance organization has
a reasonable basis to suspect the claim is fraudulent, not later
than the 30th calendar day after the date the health maintenance
organization receives the claim or, if the health maintenance
organization has requested an attachment under Section 843.3385,
not later than the 15th day after the date the health maintenance
organization receives the attachment, the health maintenance
organization may submit a written request to the commissioner for
an extension to investigate whether the claim is fraudulent and to
determine if the claim is payable.
(b) The request must include:
(1) the reason the health maintenance organization has
not completed the fraud investigation;
(2) the nature of the investigation;
(3) the anticipated completion date of the
investigation; and
(4) the amount of any partial payment made on the
claim.
(c) A copy of the request must be sent to the claimant.
(d) On or before the fifth day after the date the
commissioner receives a request under this subsection, the
commissioner shall inform the health maintenance organization
whether the request has been approved and, if so, the specific
amount of time of the extension. The commissioner may grant a
request under this section only if the commissioner determines that
there is a good faith and articulable reason to believe the health
maintenance organization is not obligated to pay some part or all of
the claim and the investigation could not reasonably be completed
before the health maintenance organization is otherwise required to
determine whether the claim is payable.
(e) The health maintenance organization must identify and
pay all sums the health maintenance organization is obligated to
pay on the claim that are not subject to the extension requested
under this section.
(f) A request under this section tolls the deadlines
prescribed by this subchapter for determining whether the claim is
payable until:
(1) the fifth day after the date on which the
commissioner denies the request; or
(2) the date specified by the commissioner in an order
approving the request.
SECTION 3. Subchapter C, Chapter 1301, Insurance Code, as
effective April 1, 2005, is amended by adding Section 1301.1055 to
read as follows:
Sec. 1301.1055. FRAUD INVESTIGATION. (a) If, after receipt
of an otherwise clean claim, an insurer has a reasonable basis to
suspect the claim is fraudulent, not later than the 30th calendar
day after the date the insurer receives the claim or, if the insurer
has requested an attachment under Section 1301.1054, not later than
the 15th day after the date the insurer receives the attachment, the
insurer may submit a written request to the commissioner for an
extension to investigate whether the claim is fraudulent and to
determine if the claim is payable.
(b) The request must include:
(1) the reason the insurer has not completed the fraud
investigation;
(2) the nature of the investigation;
(3) the anticipated completion date of the
investigation; and
(4) the amount of any partial payment made on the
claim.
(c) A copy of the request must be sent to the claimant.
(d) On or before the fifth day after the date the
commissioner receives a request under this subsection, the
commissioner shall inform the insurer whether the request has been
approved and, if so, the specific amount of time of the extension.
The commissioner may grant a request under this section only if the
commissioner determines that there is a good faith and articulable
reason to believe the insurer is not obligated to pay some part or
all of the claim and the investigation could not reasonably be
completed before the insurer is otherwise required to determine
whether the claim is payable.
(e) The insurer must identify and pay all sums the insurer
is obligated to pay on the claim that are not subject to the
extension requested under this section.
(f) A request under this section tolls the deadlines
prescribed by this subchapter for determining whether the claim is
payable until:
(1) the fifth day after the date on which the
commissioner denies the request; or
(2) the date specified by the commissioner in an order
approving the request.
SECTION 4. (a) Section 1 of this Act takes effect only if
the Act of the 79th Legislature, Regular Session, 2005, relating to
nonsubstantive amendments to and corrections in existing codes does
not take effect. If that Act takes effect, Section 1 of this Act has
no effect.
(b) Section 3 of this Act takes effect only if the Act of the
79th Legislature, Regular Session, 2005, relating to
nonsubstantive additions to and corrections in existing codes takes
effect. If that Act does not take effect, Section 3 of this Act has
no effect.
SECTION 5. (a) With respect to a contract entered into
between an insurer or health maintenance organization and a
physician or health care provider, and payment for medical care or
health care services under the contract, the changes in law made by
this Act apply only to a contract entered into or renewed on or
after the 60th day after the effective date of this Act and payment
for services under the contract. Such a contract entered into
before the 60th day after the effective date of this Act and not
renewed or that was last renewed before the 60th day after the
effective date of this Act, and payment for medical care or health
care services under the contract, are governed by the law in effect
immediately before the effective date of this Act, and that law is
continued in effect for that purpose.
(b) With respect to the payment for medical care or health
care services provided, but not provided under a contract to which
Subsection (a) of this section applies, the changes in law made by
this Act apply only to the payment for those services provided on or
after the 60th day after the effective date of this Act. Payment
for those services provided before the 60th day after the effective
date of this Act is governed by the law in effect immediately before
the effective date of this Act, and that law is continued in effect
for that purpose.
SECTION 6. This Act takes effect September 1, 2005.