By: Duncan  S.B. No. 1731
         (In the Senate - Filed March 9, 2007; March 21, 2007, read
  first time and referred to Committee on State Affairs;
  April 24, 2007, reported adversely, with favorable Committee
  Substitute by the following vote:  Yeas 8, Nays 0; April 24, 2007,
  sent to printer.)
 
  COMMITTEE SUBSTITUTE FOR S.B. No. 1731 By:  Duncan
 
 
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;
               (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)  If a consumer 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.
         (g)  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 relating to the charges for an inpatient admission,
  outpatient surgical procedure, or other service. If a consumer
  objects to the billed amount for a particular admission, procedure,
  or service, the facility must make a good faith effort to resolve
  the complaint in an informal manner based on its complaint
  procedures.  If a complaint cannot be resolved informally, the
  facility shall advise the consumer that a complaint may be filed
  with the department and provide the consumer with the 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 radiology 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.  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)  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.
         (e)  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.
         (f)  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.
         (g)  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.
         (h)  In this section, "physician" means a person licensed to
  practice in this state.
         SECTION 5.  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 6.  Chapter 38, Insurance Code, is amended by adding
  Subchapter H to read as follows:
  SUBCHAPTER H.  HEALTH CARE COST 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 costs.  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 COST
  INFORMATION.  The department shall provide to the Department of
  State Health Services for publication, for identified regions of
  this state, aggregate health care cost 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 cost 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 7.  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 8.  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 9.  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 10.  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 11.  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 12.  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 13.  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 14.  Subsections (a), (b), (c), and (d), Section
  311.002, Health and Safety Code, are repealed.
         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.
 
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