By: Duncan S.B. No. 1731
 
 
A BILL TO BE ENTITLED
AN ACT
relating to consumer access to health care information and consumer
protection for services provided by or through health benefit
plans, hospitals, ambulatory surgical centers, birthing centers,
and other health care facilities; providing penalties.
       BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
       SECTION 1.  Subtitle G, Title 4, Health and Safety Code, is
amended by adding Chapter 324 to read as follows:
CHAPTER 324. CONSUMER ACCESS TO HEALTH CARE INFORMATION
SUBCHAPTER A. GENERAL PROVISIONS
       Sec. 324.001.  DEFINITIONS. In this chapter:
             (1)  "Average charge" means the mathematical average of
facility charges for an inpatient admission or outpatient surgical
procedure.  The term does not include charges for a particular
inpatient admission or outpatient surgical procedure that exceed
the average by more than two standard deviations.
             (2)  "Billed charge" means the amount a facility
charges for an inpatient admission, outpatient surgical procedure,
or health care service or supply.
             (3)  "Costs" means the fixed and variable expenses
incurred by a facility in the provision of a health care service.
             (4)  "Consumer" means any person who is considering
receiving, is receiving, or has received a health care service or
supply as a patient from a facility. The term includes the personal
representative of the patient.
             (5)  "Department" means the Department of State Health
Services.
             (6)  "Executive commissioner" means the executive
commissioner of the Health and Human Services Commission.
             (7)  "Facility" means:
                   (A)  an ambulatory surgical center licensed under
Chapter 243;
                   (B)  a birthing center licensed under Chapter 244;
or
                   (C)  a hospital licensed under Chapter 241.
       Sec. 324.002.  RULES. The executive commissioner shall
adopt and enforce rules to further the purposes of this chapter.
[Sections 324.003-324.050 reserved for expansion]
SUBCHAPTER B. CONSUMER GUIDE TO HEALTH CARE
       Sec. 324.051.  DEPARTMENT WEBSITE.  (a)  The department
shall make available on the department's Internet website a
consumer guide to health care. The department shall include
information in the guide concerning facility pricing practices and
the correlation between a facility's average charge for an
inpatient admission or outpatient surgical procedure and the
actual, billed charge for the admission or procedure, including
notice that the average charge for a particular inpatient admission
or outpatient surgical procedure will vary from the actual, billed
charge for the admission or procedure based on:
             (1)  the person's medical condition;
             (2)  any unknown medical conditions of the person;
             (3)  the person's diagnosis and recommended treatment
protocols ordered by the physician providing care to the person;
and
             (4)  other factors associated with the inpatient
admission or outpatient surgical procedure.
       (b)  The department shall include information in the guide to
advise consumers that:
             (1)  the average charge for an inpatient admission or
outpatient surgical procedure may vary between facilities
depending on a facility's cost structure, the range and frequency
of the services provided, intensity of care, and payor mix;
             (2)  the average charge by a facility for an inpatient
admission or outpatient surgical procedure will vary from the
facility's costs or the amount that the facility may be reimbursed
by a health benefit plan for the admission or surgical procedure;
             (3)  the consumer may be personally liable for payment
for an inpatient admission, outpatient surgical procedure, or
health care service or supply depending on the consumer's health
benefit plan coverage;
             (4)  the consumer should contact the consumer's health
benefit plan for accurate information regarding the plan structure,
benefit coverage, deductibles, copayments, coinsurance, and other
plan provisions that may impact the consumer's liability for
payment for an inpatient admission, outpatient surgical procedure,
or health care service or supply; and
             (5)  the consumer, if uninsured, may be eligible for a
discount on facility charges based on a sliding fee scale or a
written charity care policy established by the facility.
       (c)  The department shall include on the consumer guide to
health care website:
             (1)  an Internet link for consumers to access quality
of care data, including:
                   (A)  the Texas Health Care Information Collection
website;
                   (B)  the Hospital Compare website within the
United States Department of Health and Human Services website;
                   (C)  the Joint Commission on Accreditation of
Healthcare Organizations website; and
                   (D)  the Texas Hospital Association's Texas
PricePoint website; and
             (2)  a disclaimer noting the websites that are not
provided by this state or an agency of this state.
       (d)  The department may accept gifts and grants to fund the
consumer guide to health care.  On the department's Internet
website, the department may not identify, recognize, or acknowledge
in any format the donors or grantors to the consumer guide to health
care.
[Sections 324.052-324.100 reserved for expansion]
SUBCHAPTER C.  BILLING OF FACILITY SERVICES AND SUPPLIES
       Sec. 324.101.  FACILITY POLICIES. (a)  Each facility shall
develop, implement, and enforce written policies for the billing of
facility health care services and supplies. The policies must
address:
             (1)  any discounting of facility charges to an
uninsured consumer, subject to Chapter 552, Insurance Code;
             (2)  any discounting of facility charges provided to a
financially or medically indigent consumer who qualifies for
indigent services based on a sliding fee scale or a written charity
care policy established by the facility and the documented income
and other resources of the consumer;
             (3)  the providing of an itemized statement required by
Subsection (e);
             (4)  whether interest will be applied to any billed
service not covered by a third-party payor and the rate of any
interest charged;
             (5)  the procedure for handling complaints; and
             (6)  the providing of a conspicuous written disclosure
to a consumer at the time the consumer is first admitted to the
facility or first receives services at the facility that:
                   (A)  provides confirmation whether the facility
is a participating provider under the consumer's third-party payor
coverage on the date services are to be rendered based on the
information received from the consumer at the time the confirmation
is provided; and
                   (B)  informs the consumer that a physician or
other health care provider who may provide services to the consumer
while in the facility may not be a participating provider with the
same third-party payors as the facility.
       (b)  For services provided in an emergency department of a
hospital or as a result of an emergent direct admission, the
hospital shall provide the written disclosure required by
Subsection (a)(6) before discharging the patient from the emergency
department or hospital, as appropriate.
       (c)  Each facility shall post in the general waiting area and
in the waiting areas of any off-site or on-site registration,
admission, or business office a clear and conspicuous notice of the
availability of the policies required by Subsection (a).
       (d)  The facility shall provide an estimate of the facility's
charges for any elective inpatient admission or nonemergency
outpatient surgical procedure or other service on request and
before the scheduling of the admission or procedure or service. The
estimate must be provided not later than the 10th business day after
the date on which the estimate is requested. The facility must
advise the consumer that:
             (1)  the request for an estimate of charges may result
in a delay in the scheduling and provision of the inpatient
admission, outpatient surgical procedure, or other service;
             (2)  the actual charges for an inpatient admission,
outpatient surgical procedure, or other service will vary based on
the person's medical condition and other factors associated with
performance of the procedure or service;
             (3)  the actual charges for an inpatient admission,
outpatient surgical procedure, or other service may differ from the
amount to be paid by the consumer or the consumer's third-party
payor;
             (4)  the consumer may be personally liable for payment
for the inpatient admission, outpatient surgical procedure, or
other service depending on the consumer's health benefit plan
coverage; and
             (5)  the consumer should contact the consumer's health
benefit plan for accurate information regarding the plan structure,
benefit coverage, deductibles, copayments, coinsurance, and other
plan provisions that may impact the consumer's liability for
payment for the inpatient admission, outpatient surgical
procedure, or other service.
       (e)  A facility shall provide to the consumer at the
consumer's request an itemized statement of the billed services if
the consumer requests the statement not later than the first
anniversary of the date the person is discharged from the facility.
The facility shall provide the statement to the consumer not later
than the 10th business day after the date on which the statement is
requested.
       (f)  A facility shall provide an itemized statement of billed
services to a third-party payor who is actually or potentially
responsible for paying all or part of the billed services provided
to a patient and who has received a claim for payment of those
services. To be entitled to receive a statement, the third-party
payor must request the statement from the facility and must have
received a claim for payment. The request must be made not later
than one year after the date on which the payor received the claim
for payment. The facility shall provide the statement to the payor
not later than the 30th day after the date on which the payor
requests the statement. If a third-party payor receives a claim for
payment of part but not all of the billed services, the third-party
payor may request an itemized statement of only the billed services
for which payment is claimed or to which any deduction or copayment
applies.
       (g)  A facility in violation of this section is subject to
enforcement action by the appropriate licensing agency.
       (h)  If a consumer or a third-party payor requests more than
two copies of the statement, the facility may charge a reasonable
fee for the third and subsequent copies provided. The fee may not
exceed the sum of:
             (1)  a basic retrieval or processing fee, which must
include the fee for providing the first 10 pages of the copies and
which may not exceed $30;
             (2)  a charge for each page of:
                   (A)  $1 for the 11th through the 60th page of the
provided copies;
                   (B)  50 cents for the 61st through the 400th page
of the provided copies; and
                   (C)  25 cents for any remaining pages of the
provided copies; and
             (3)  the actual cost of mailing, shipping, or otherwise
delivering the provided copies.
       (i)  If a consumer overpays a facility, the facility must
refund the amount of the overpayment not later than the 30th day
after the date the facility determines that an overpayment has been
made. This subsection does not apply to an overpayment subject to
Section 1301.132 or 843.350, Insurance Code.
       Sec. 324.102.  COMPLAINT PROCESS. A facility shall
establish and implement a procedure for handling consumer
complaints, and must make a good faith effort to resolve the
complaint in an informal manner based on its complaint procedures.
If the complaint cannot be resolved informally, the facility shall
advise the consumer that a complaint may be filed with the
department and shall provide the consumer with the mailing address
and telephone number of the department.
       Sec. 324.103.  CONSUMER WAIVER PROHIBITED. The provisions
of this chapter may not be waived, voided, or nullified by a
contract or an agreement between a facility and a consumer.
       SECTION 2.  Subdivision (10), Section 108.002, Health and
Safety Code, is amended to read as follows:
             (10)  "Health care facility" means:
                   (A)  a hospital;
                   (B)  an ambulatory surgical center licensed under
Chapter 243;
                   (C)  a chemical dependency treatment facility
licensed under Chapter 464;
                   (D)  a renal dialysis facility;
                   (E)  a birthing center;
                   (F)  a rural health clinic; [or]
                   (G)  a federally qualified health center as
defined by 42 U.S.C. Section 1396d(l)(2)(B); or
                   (H)  a free-standing imaging center.
       SECTION 3.  Subsection (k), Section 108.009, Health and
Safety Code, is amended to read as follows:
       (k)  The council shall collect health care data elements
relating to payer type, the racial and ethnic background of
patients, and the use of health care services by consumers.  The
council shall prioritize data collection efforts on inpatient and
outpatient surgical and radiological procedures from hospitals,
ambulatory surgical centers, and free-standing radiology centers.
       SECTION 4.  Subsection (h), Section 311.002, Health and
Safety Code, is amended to read as follows:
       (h)  In this section, "hospital" includes:
             (1)  [a hospital licensed under Chapter 241;
             [(2)]  a treatment facility licensed under Chapter 464;
and
             (2) [(3)]  a mental health facility licensed under
Chapter 577.
       SECTION 5.  Chapter 101, Occupations Code, is amended by
adding Subchapter H, transferring Section 101.202 to Subchapter H
redesignated as Section 101.351 and further amending that section,
and adding Section 101.352 to read as follows:
SUBCHAPTER H.  BILLING
       Sec. 101.351 [101.202].  FAILURE TO PROVIDE BILLING
INFORMATION. On the written request of a patient, a health care
professional shall provide, in plain language, a written
explanation of the charges for professional services previously
made on a bill or statement for the patient.  This section does not
apply to a physician subject to Section 101.352.
       Sec. 101.352.  BILLING POLICIES AND INFORMATION;
PHYSICIANS.  (a)  A physician shall develop, implement, and enforce
written policies for the billing of health care services and
supplies. The policies must address:
             (1)  any discounting of charges for health care
services or supplies provided to an uninsured patient that is not
covered by a patient's third-party payor, subject to Chapter 552,
Insurance Code;
             (2)  any discounting of charges for health care
services or supplies provided to an indigent patient who qualifies
for services or supplies based on a sliding fee scale or a written
charity care policy established by the physician;
             (3)  whether interest will be applied to any billed
health care service or supply not covered by a third-party payor and
the rate of any interest charged; and
             (4)  the procedure for handling complaints relating to
billed charges for health care services or supplies.
       (b)  Each physician who maintains a waiting area shall post a
clear and conspicuous notice of the availability of the policies
required by Subsection (a) in the waiting area and in any
registration, admission, or business office in which patients are
reasonably expected to seek service.
       (c)  On the request of a patient who is seeking services that
are to be provided on an out-of-network basis or who does not have
coverage under a government program, health insurance policy, or
health maintenance organization evidence of coverage, a physician
shall provide an estimate of the charges for any health care
services or supplies. The estimate must be provided not later than
the 10th business day after the date of the request. A physician
must advise the consumer that:
             (1)  the request for an estimate of charges may result
in a delay in the scheduling and provision of the services;
             (2)  the actual charges for the services or supplies
will vary based on the patient's medical condition and other
factors associated with performance of the services;
             (3)  the actual charges for the services or supplies
may differ from the amount to be paid by the patient or the
patient's third-party payor; and
             (4)  the patient may be personally liable for payment
for the services or supplies depending on the patient's health
benefit plan coverage.
       (d)  For services provided in an emergency department of a
hospital or as a result of an emergent direct admission, the
physician shall provide the estimate of charges required by
Subsection (c) before discharging the patient from the emergency
department or hospital, as appropriate.
       (e)  A physician shall provide a patient with an itemized
statement of the charges for professional services or supplies not
later than the 10th business day after the date on which the
statement is requested if the patient requests the statement not
later than the first anniversary of the date on which the health
care services or supplies were provided.
       (f)  If a patient requests more than two copies of the
statement, a physician may charge a reasonable fee for the third and
subsequent copies provided. The Texas Medical Board shall by rule
set the permissible fee a physician may charge for copying,
processing, and delivering a copy of the statement.
       (g)  On the request of a patient, a physician shall provide,
in plain language, a written explanation of the charges for
services or supplies previously made on a bill or statement for the
patient.
       (h)  If a patient overpays a physician, the physician must
refund the amount of the overpayment not later than the 30th day
after the date the physician determines that an overpayment has
been made. This subsection does not apply to an overpayment subject
to Section 1301.132 or 843.350, Insurance Code.
       (i)  In this section, "physician" means a person licensed to
practice in this state.
       SECTION 6.  Section 154.002, Occupations Code, is amended by
adding Subsection (c) to read as follows:
       (c)  The board shall make available on the board's Internet
website a consumer guide to health care. The board shall include
information in the guide concerning the billing and reimbursement
of health care services provided by physicians, including
information that advises consumers that:
             (1)  the charge for a health care service or supply will
vary based on:
                   (A)  the person's medical condition;
                   (B)  any unknown medical conditions of the person;
                   (C)  the person's diagnosis and recommended
treatment protocols; and
                   (D)  other factors associated with performance of
the health care service;
             (2)  the charge for a health care service or supply may
differ from the amount to be paid by the consumer or the consumer's
third-party payor;
             (3)  the consumer may be personally liable for payment
for the health care service or supply depending on the consumer's
health benefit plan coverage; and
             (4)  the consumer should contact the consumer's health
benefit plan for accurate information regarding the plan structure,
benefit coverage, deductibles, copayments, coinsurance, and other
plan provisions that may impact the consumer's liability for
payment for the health care services or supplies.
       SECTION 7.  Chapter 38, Insurance Code, is amended by adding
Subchapter H to read as follows:
SUBCHAPTER H.  HEALTH CARE REIMBURSEMENT RATE INFORMATION
       Sec. 38.351.  PURPOSE OF SUBCHAPTER.  The purpose of this
subchapter is to authorize the department to:
             (1)  collect data concerning health benefit plan
reimbursement rates in a uniform format; and
             (2)  disseminate, on an aggregate basis for
geographical regions in this state, information concerning health
care reimbursement rates derived from the data.
       Sec. 38.352.  DEFINITION.  In this subchapter, "group health
benefit plan" means a preferred provider benefit plan as defined by
Section 1301.001 or an evidence of coverage for a health care plan
that provides basic health care services as defined by Section
843.002.
       Sec. 38.353.  APPLICABILITY OF SUBCHAPTER. (a)  This
subchapter applies to the issuer of a group health benefit plan,
including:
             (1)  an insurance company;
             (2)  a group hospital service corporation;
             (3)  a fraternal benefit society;
             (4)  a stipulated premium company;
             (5)  a reciprocal or interinsurance exchange; or
             (6)  a health maintenance organization.
       (b)  Notwithstanding any provision in Chapter 1551, 1575,
1579, or 1601 or any other law, and except as provided by Subsection
(e), this subchapter applies to:
             (1)  a basic coverage plan under Chapter 1551;
             (2)  a basic plan under Chapter 1575;
             (3)  a primary care coverage plan under Chapter 1579;
and
             (4)  basic coverage under Chapter 1601.
       (c)  Except as provided by Subsection (d), this subchapter
applies to a small employer health benefit plan provided under
Chapter 1501.
       (d)  This subchapter does not apply to:
             (1)  standard health benefit plans provided under
Chapter 1507;
             (2)  children's health benefit plans provided under
Chapter 1502;
             (3)  health care benefits provided under a workers' 
compensation insurance policy;
             (4)  Medicaid managed care programs operated under
Chapter 533, Government Code;
             (5)  Medicaid programs operated under Chapter 32, Human
Resources Code; or
             (6)  the state child health plan operated under Chapter
62 or 63, Health and Safety Code.
       (e)  The commissioner by rule may exclude a type of health
benefit plan from the requirements of this subchapter if the
commissioner finds that data collected in relation to the health
benefit plan would not be relevant to accomplishing the purposes of
this subchapter.
       Sec. 38.354.  RULES.  The commissioner may adopt rules as
provided by Subchapter A, Chapter 36, to implement this subchapter.
       Sec. 38.355.  DATA CALL; STANDARDIZED FORMAT.  (a)  Each
health benefit plan issuer shall submit to the department, at the
time and in the form and manner required by the department,
aggregate reimbursement rates by region paid by the health benefit
plan issuer for health care services identified by the department.
       (b)  The department shall require that data submitted under
this section be submitted in a standardized format, established by
rule, to permit comparison of health care reimbursement rates.  To
the extent feasible, the department shall develop the data
submission requirements in a manner that allows collection of
reimbursement rates as a dollar amount and not by comparison to
other standard reimbursement rates, such as Medicare reimbursement
rates.
       (c)  The department shall specify the period for which
reimbursement rates must be filed under this section.
       (d)  The department may contract with a private third party
to obtain the data under this subchapter. If the department
contracts with a third party, the department may determine the
aggregate data to be collected and published under Section 38.357
if consistent with the purposes of this subchapter described in
Section 38.351. The department shall prohibit the third party
contractor from selling, leasing, or publishing the data obtained
by the contractor under this subchapter.
       Sec. 38.356.  CONFIDENTIALITY OF DATA.  Except as provided
by Section 38.357, data collected under this subchapter is
confidential and not subject to disclosure under Chapter 552,
Government Code.
       Sec. 38.357.  PUBLICATION OF AGGREGATE HEALTH CARE
REIMBURSEMENT RATE INFORMATION.  The department shall provide to
the Department of State Health Services for publication, for
identified regions of this state, aggregate health care
reimbursement rate information derived from the data collected
under this subchapter.  The published information may not reveal
the name of any health care provider or health benefit plan issuer.  
The department may make the aggregate health care reimbursement
rate information available through the department's Internet
website.
       Sec. 38.358.  PENALTIES.  A health benefit plan issuer that
fails to submit data as required in accordance with this subchapter
is subject to an administrative penalty under Chapter 84.  For
purposes of penalty assessment, each day the health benefit plan
issuer fails to submit the data as required is a separate violation.
       SECTION 8.  Section 843.155, Insurance Code, is amended by
amending Subsection (b) and adding Subsection (d) to read as
follows:
       (b)  The report shall:
             (1)  be verified by at least two principal officers;
             (2)  be in a form prescribed by the commissioner; and
             (3)  include:
                   (A)  a financial statement of the health
maintenance organization, including its balance sheet and receipts
and disbursements for the preceding calendar year, certified by an
independent public accountant;
                   (B)  the number of individuals enrolled during the
preceding calendar year, the number of enrollees as of the end of
that year, and the number of enrollments terminated during that
year;
                   (C)  a statement of:
                         (i)  an evaluation of enrollee satisfaction;
                         (ii)  an evaluation of quality of care;
                         (iii)  coverage areas;
                         (iv)  accreditation status;
                         (v)  premium costs;
                         (vi)  plan costs;
                         (vii)  premium increases;
                         (viii)  the range of benefits provided;
                         (ix)  copayments and deductibles;
                         (x)  the accuracy and speed of claims
payment by the organization;
                         (xi)  the credentials of physicians of the
organization;
                         (xii)  the number of providers;
                         (xiii)  the names of network providers; and
                         (xiv)  a list of the hospitals in the
network;
                   (D)  updated financial projections for the next
calendar year of the type described in Section 843.078(e), until
the health maintenance organization has had a net income for 12
consecutive months; and
                   (E) [(D)]  other information relating to the
performance of the health maintenance organization as necessary to
enable the commissioner to perform the commissioner's duties under
this chapter and Chapter 20A.
       (d)  The annual report filed by the health maintenance
organization shall be made publicly available on the department's
Internet website in a user-friendly format that allows consumers to
make direct comparisons of the financial and other data reported by
health maintenance organizations under this section.
       SECTION 9.  Subchapter A, Chapter 1301, Insurance Code, is
amended by adding Section 1301.009 to read as follows:
       Sec. 1301.009.  ANNUAL REPORT.  (a)  Not later than March 1
of each year, an insurer shall file with the commissioner a report
relating to the preferred provider benefit plan offered under this
chapter and covering the preceding calendar year.
       (b)  The report shall:
             (1)  be verified by at least two principal officers;
             (2)  be in a form prescribed by the commissioner; and
             (3)  include:
                   (A)  a financial statement of the insurer,
including its balance sheet and receipts and disbursements for the
preceding calendar year, certified by an independent public
accountant;
                   (B)  the number of individuals enrolled during the
preceding calendar year, the number of enrollees as of the end of
that year, and the number of enrollments terminated during that
year; and
                   (C)  a statement of:
                         (i)  an evaluation of enrollee satisfaction;
                         (ii)  an evaluation of quality of care;
                         (iii)  coverage areas;
                         (iv)  accreditation status;
                         (v)  premium costs;
                         (vi)  plan costs;
                         (vii)  premium increases;
                         (viii)  the range of benefits provided;
                         (ix)  copayments and deductibles;
                         (x)  the accuracy and speed of claims
payment by the insurer for the plan;
                         (xi)  the credentials of physicians who are
preferred providers;
                         (xii)  the number of preferred providers;
                         (xiii)  the names of preferred providers;
and
                         (xiv)  a list of the hospitals that are
preferred providers.
       (c)  The annual report filed by the insurer shall be made
publicly available on the department's website in a user-friendly
format that allows consumers to make direct comparisons of the
financial and other data reported by insurers under this section.
       (d)  An insurer providing group coverage of $10 million or
less in premiums or individual coverage of $2 million or less in
premiums is not required to report the data required under
Subsection (b)(3)(C).
       SECTION 10.  Subtitle F, Title 8, Insurance Code, is amended
by adding Chapter 1456 to read as follows:
CHAPTER 1456. DISCLOSURE OF PROVIDER STATUS
       Sec. 1456.001.  DEFINITIONS. In this chapter:
             (1)  "Balance billing" means the practice of charging
an enrollee in a health benefit plan that uses a provider network to
recover from the enrollee the balance of a non-network health care
provider's fee for service received by the enrollee from the health
care provider that is not fully reimbursed by the enrollee's health
benefit plan.
             (2)  "Enrollee" means an individual who is eligible to
receive health care services through a health benefit plan.
             (3)  "Facility-based physician" means a radiologist,
an anesthesiologist, a pathologist, an emergency department
physician, or a neonatologist:
                   (A)  to whom the facility has granted clinical
privileges; and
                   (B)  who provides services to patients of the
facility under those clinical privileges.
             (4)  "Health care facility" means a hospital, emergency
clinic, outpatient clinic, birthing center, ambulatory surgical
center, or other facility providing health care services.
             (5)  "Health care practitioner" means an individual who
is licensed to provide and provides health care services.
             (6)  "Provider network" means a health benefit plan
under which health care services are provided to enrollees through
contracts with health care providers and that requires those
enrollees to use health care providers participating in the plan
and procedures covered by the plan. The term includes a network
operated by:
                   (A)  a health maintenance organization;
                   (B)  a preferred provider benefit plan issuer; or
                   (C)  another entity that issues a health benefit
plan, including an insurance company.
       Sec. 1456.002.  APPLICABILITY OF CHAPTER.  (a)  This chapter
applies to any health benefit plan that:
             (1)  provides benefits for medical or surgical expenses
incurred as a result of a health condition, accident, or sickness,
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 that is offered by:
                   (A)  an insurance company;
                   (B)  a group hospital service corporation
operating under Chapter 842;
                   (C)  a fraternal benefit society operating under
Chapter 885;
                   (D)  a stipulated premium company operating under
Chapter 884;
                   (E)  a health maintenance organization operating
under Chapter 843;
                   (F)  a multiple employer welfare arrangement that
holds a certificate of authority under Chapter 846;
                   (G)  an approved nonprofit health corporation
that holds a certificate of authority under Chapter 844; or
                   (H)  an entity not authorized under this code or
another insurance law of this state that contracts directly for
health care services on a risk-sharing basis, including a
capitation basis; or
             (2)  provides health and accident coverage through a
risk pool created under Chapter 172, Local Government Code,
notwithstanding Section 172.014, Local Government Code, or any
other law.
       (b)  This chapter applies to a person to whom a health
benefit plan contracts to:
             (1)  process or pay claims;
             (2)  obtain the services of physicians or other
providers to provide health care services to enrollees; or
             (3)  issue verifications or preauthorizations.
       (c)  This chapter does not apply to:
             (1)  Medicaid managed care programs operated under
Chapter 533, Government Code;
             (2)  Medicaid programs operated under Chapter 32, Human
Resources Code; or
             (3)  the state child health plan operated under Chapter
62 or 63, Health and Safety Code.
       Sec. 1456.003.  REQUIRED DISCLOSURE:  HEALTH BENEFIT PLAN.
(a)  Each health benefit plan that provides health care through a
provider network shall provide notice to its enrollees that:
             (1)  a facility-based physician or other health care
practitioner may not be included in the health benefit plan's
provider network; and
             (2)  a health care practitioner described by
Subdivision (1) may balance bill the enrollee for amounts not paid
by the health benefit plan.
       (b)  The health benefit plan shall provide the disclosure in
writing to each enrollee:
             (1)  in any materials sent to the enrollee in
conjunction with issuance or renewal of the plan's insurance policy
or evidence of coverage;
             (2)  in an explanation of payment summary provided to
the enrollee or in any other analogous document that describes the
enrollee's benefits under the plan; and
             (3)  conspicuously displayed, on any health benefit
plan website that an enrollee is reasonably expected to access.
       (c)  A health benefit plan must clearly identify any health
care facilities within the provider network in which facility-based
physicians do not participate in the health benefit plan's provider
network. Health care facilities identified under this subsection
must be identified in a separate and conspicuous manner in any
provider network directory or website directory.
       (d)  Any explanation of benefits sent to an enrollee that
contains a remark code indicating a payment made to a non-network
physician has been paid at the health benefit plan's allowable or
usual and customary amount shall also include the number for the
department's consumer protection division for complaints regarding
payment.
       Sec. 1456.004.  REQUIRED DISCLOSURE:  FACILITY-BASED
PHYSICIANS. (a)  If a facility-based physician bills a patient who
is covered by a health benefit plan described in Section 1456.002
that does not have a contract with the facility-based physician,
the facility-based physician shall send a billing statement that:
             (1)  contains an itemized listing of the services and
supplies provided along with the dates the services and supplies
were provided;
             (2)  contains a conspicuous, plain-language
explanation that:
                   (A)  the facility-based physician is not within
the health plan provider network; and
                   (B)  the health benefit plan has paid a rate, as
determined by the health benefit plan, which is below the
facility-based physician billed amount;
             (3)  contains a telephone number to call to discuss the
statement, provide an explanation of any acronyms, abbreviations,
and numbers used on the statement, or discuss any payment issues;
             (4)  contains a statement that the patient may call to
discuss alternative payment arrangements;
             (5)  contains a notice that the patient may file
complaints with the Texas Medical Board and includes the Texas
Medical Board mailing address and complaint telephone number; and
             (6)  for billing statements that total an amount
greater than $200, over any applicable copayments or deductibles,
states, in plain language, that if the patient finalizes a payment
plan agreement within 45 days of receiving the first billing
statement and substantially complies with the agreement, the
facility-based physician may not furnish adverse information to a
consumer reporting agency regarding an amount owed by the patient
for the receipt of medical treatment.
       (b)  A patient may be considered by the facility-based
physician to be out of substantial compliance with the payment plan
agreement if payments are not made in compliance with the agreement
for a period of 90 days.
       Sec. 1456.005.  DISCIPLINARY ACTION AND ADMINISTRATIVE
PENALTY. (a)  The commissioner may take disciplinary action
against a licensee that violates this chapter, in accordance with
Chapter 84.
       (b)  A violation of this chapter by a facility-based
physician is grounds for disciplinary action and imposition of an
administrative penalty by the Texas Medical Board.
       (c)  The Texas Medical Board shall:
             (1)  notify a facility-based physician of a finding by
the Texas Medical Board that the facility-based physician is
violating or has violated this chapter or a rule adopted under this
chapter; and
             (2)  provide the facility-based physician with an
opportunity to correct the violation without penalty or reprimand.
       Sec. 1456.006.  COMMISSIONER RULES; FORM OF DISCLOSURE. The
commissioner by rule may prescribe specific requirements for the
disclosure required under Section 1456.003. The form of the
disclosure must be substantially as follows:
       NOTICE:  "ALTHOUGH HEALTH CARE SERVICES MAY BE OR HAVE BEEN
PROVIDED TO YOU AT A HEALTH CARE FACILITY THAT IS A MEMBER OF THE
PROVIDER NETWORK USED BY YOUR HEALTH BENEFIT PLAN, OTHER
PROFESSIONAL SERVICES MAY BE OR HAVE BEEN PROVIDED AT OR THROUGH THE
FACILITY BY PHYSICIANS AND OTHER HEALTH CARE PRACTITIONERS WHO ARE
NOT MEMBERS OF THAT NETWORK. YOU MAY BE RESPONSIBLE FOR PAYMENT OF
ALL OR PART OF THE FEES FOR THOSE PROFESSIONAL SERVICES THAT ARE NOT
PAID OR COVERED BY YOUR HEALTH BENEFIT PLAN."
       Sec. 1456.0065.  STUDY OF NETWORK ADEQUACY AND CONTRACTS OF
HEALTH PLANS. (a)  In this section:
             (1)  "Commissioner" means the commissioner of
insurance.
             (2)  "Health benefit plan" means an insurance policy or
a contract or evidence of coverage issued by a health maintenance
organization or an employer or employee sponsored health plan.
       (b)  The commissioner shall appoint an advisory committee to
study facility-based provider network adequacy of health benefit
plans.
       (c)  The advisory committee shall be composed of:
             (1)  one or more physician representatives;
             (2)  one or more hospital representatives;
             (3)  one or more health benefit plan representatives,
to equal the total number of physician and hospital
representatives; and
             (4)  one representative each from associations
representing physicians, hospitals, and health benefit plans.
       (d)  The advisory committee shall advise the commissioner
periodically of its findings not later than December 1, 2008.
       (e)  Members of the advisory committee serve without
compensation.
       (f)  The advisory committee is abolished and this section
expires January 1, 2009.
       Sec. 1456.007.  HEALTH BENEFIT PLAN ESTIMATE OF CHARGES. A
health benefit plan that must comply with this chapter under
Section 1456.002 shall, on the request of an enrollee, provide an
estimate of payments that will be made for any health care service
or supply and shall also specify any deductibles, copayments,
coinsurance, or other amounts for which the enrollee is
responsible. The estimate must be provided not later than the 10th
business day after the date on which the estimate was requested. A
health benefit plan must advise the enrollee that:
             (1)  the actual payment and charges for the services or
supplies will vary based upon the enrollee's actual medical
condition and other factors associated with performance of medical
services; and
             (2)  the enrollee may be personally liable for the
payment of services or supplies based upon the enrollee's health
benefit plan coverage.
       SECTION 11.  Section 843.201, Insurance Code, is amended by
adding Subsection (d) to read as follows:
       (d)  A health maintenance organization shall provide to an
enrollee on request information on:
             (1)  whether a physician or other health care provider
is a participating provider in the health maintenance
organization's network;
             (2)  whether proposed health care services are covered
by the health plan; and
             (3)  what the enrollee's personal responsibility will
be for payment of applicable copayment or deductible amounts.
       SECTION 12.  Subchapter F, Chapter 843, Insurance Code, is
amended by adding Section 843.211 to read as follows:
       Sec. 843.211.  APPLICABILITY OF SUBCHAPTER TO ENTITIES
CONTRACTING WITH HEALTH MAINTENANCE ORGANIZATION.  This subchapter
applies to a person to whom a health maintenance organization
contracts to:
             (1)  process or pay claims;
             (2)  obtain the services of physicians or other
providers to provide health care services to enrollees; or
             (3)  issue verifications or preauthorizations.
       SECTION 13.  Section 1301.158, Insurance Code, is amended by
adding Subsection (d) to read as follows:
       (d)  An insurer shall provide to an insured on request
information on:
             (1)  whether a physician or other health care provider
is a participating provider in the insurer's preferred provider
network;
             (2)  whether proposed health care services are covered
by the health insurance policy;
             (3)  what the insured's personal responsibility will be
for payment of applicable copayment or deductible amounts; and
             (4)  coinsurance amounts owed based on the provider's
contracted rate for in-network services or the insurer's usual and
customary reimbursement rate for out-of-network services.
       SECTION 14.  Subchapter D, Chapter 1301, Insurance Code, is
amended by adding Section 1301.163 to read as follows:
       Sec. 1301.163.  APPLICABILITY OF SUBCHAPTER TO ENTITIES
CONTRACTING WITH INSURER.  This subchapter applies to a person to
whom an insurer contracts to:
             (1)  process or pay claims;
             (2)  obtain the services of physicians or other
providers to provide health care services to enrollees; or
             (3)  issue verifications or preauthorizations.
       SECTION 15.  This Act applies 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 16.  Except as provided by Section 17 of this Act,
the Department of State Health Services, Texas Medical Board, and
Texas Department of Insurance shall adopt rules as necessary to
implement this Act not later than May 1, 2008.
       SECTION 17.  Not later than December 31, 2007, the
commissioner of insurance shall adopt rules as necessary to
implement Subchapter H, Chapter 38, Insurance Code, as added by
this Act.  The rules must require that each health benefit plan
issuer subject to that subchapter make the initial submission of
data under that subchapter not later than the 60th day after the
effective date of the rules.
       SECTION 18.  (a)  The commissioner of insurance by rule
shall require each health benefit plan issuer subject to Chapter
1456, Insurance Code, as added by this Act, to submit information to
the Texas Department of Insurance concerning the use of non-network
providers by health benefit plan enrollees and the payments made to
those providers.  The information collected must cover a 12-month
period specified by the commissioner of insurance.  The
commissioner of insurance shall work with the network adequacy
study group to develop the data collection and evaluate the
information collected.
       (b)  A health benefit plan issuer that fails to submit data
as required in accordance with this section is subject to an
administrative penalty under Chapter 84, Insurance Code.  For
purposes of penalty assessment, each day the health benefit plan
issuer fails to submit the data as required is a separate violation.
       SECTION 19.  This Act takes effect September 1, 2007.