By: Van de Putte S.B. No. 1106
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to payment of claims to pharmacies and pharmacists.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Section 843.002, Insurance Code, is amended by
  adding Subdivision (9-a) to read as follows:
               (9-a)  "Extrapolation" means a mathematical process or
  technique used by a health maintenance organization or pharmacy
  benefit manager that administers pharmacy claims for a health
  maintenance organization in the audit of a pharmacy or pharmacist
  to estimate audit results or findings for a larger batch or group of
  claims not reviewed by the health maintenance organization or
  pharmacy benefit manager.
         SECTION 2.  Section 843.338, Insurance Code, is amended to
  read as follows:
         Sec. 843.338.  DEADLINE FOR ACTION ON CLEAN CLAIMS. Except
  as provided by Sections [Section] 843.3385 and 843.339, not later
  than the 45th day after the date on which a health maintenance
  organization receives a clean claim from a participating physician
  or provider in a nonelectronic format or the 30th day after the date
  the health maintenance organization receives a clean claim from a
  participating physician or provider that is electronically
  submitted, the health maintenance organization shall make a
  determination of whether the claim is payable and:
               (1)  if the health maintenance organization determines
  the entire claim is payable, pay the total amount of the claim in
  accordance with the contract between the physician or provider and
  the health maintenance organization;
               (2)  if the health maintenance organization determines
  a portion of the claim is payable, pay the portion of the claim that
  is not in dispute and notify the physician or provider in writing
  why the remaining portion of the claim will not be paid; or
               (3)  if the health maintenance organization determines
  that the claim is not payable, notify the physician or provider in
  writing why the claim will not be paid.
         SECTION 3.  Section 843.339, Insurance Code, is amended to
  read as follows:
         Sec. 843.339.  DEADLINE FOR ACTION ON [CERTAIN] PRESCRIPTION
  CLAIMS; PAYMENT. (a)  A [Not later than the 21st day after the date
  a] health maintenance organization, or a pharmacy benefit manager
  that administers pharmacy claims for the health maintenance
  organization, that affirmatively adjudicates a pharmacy claim that
  is electronically submitted[, the health maintenance organization]
  shall pay the total amount of the claim through electronic funds
  transfer not later than the 14th day after the date on which the
  claim was affirmatively adjudicated.
         (b)  A health maintenance organization, or a pharmacy
  benefit manager that administers pharmacy claims for the health
  maintenance organization, that affirmatively adjudicates a
  pharmacy claim that is not electronically submitted shall pay the
  total amount of the claim not later than the 21st day after the date
  on which the claim was affirmatively adjudicated.
         SECTION 4.  Section 843.340, Insurance Code, is amended by
  adding Subsections (f) and (g) to read as follows:
         (f)  A health maintenance organization or a pharmacy benefit
  manager that administers pharmacy claims for the health maintenance
  organization may not use extrapolation to complete the audit of a
  provider who is a pharmacist or pharmacy. A health maintenance
  organization or a pharmacy benefit manager that administers
  pharmacy claims for the health maintenance organization may not
  require extrapolation audits as a condition of participation in the
  health maintenance organization's contract, network, or program
  for a provider who is a pharmacist or pharmacy.
         (g)  A health maintenance organization or a pharmacy benefit
  manager that administers pharmacy claims for the health maintenance
  organization that performs an on-site audit under this chapter of a
  provider who is a pharmacist or pharmacy shall provide the provider
  reasonable notice of the audit and accommodate the provider's
  schedule to the greatest extent possible. The notice required
  under this subsection must be in writing and must be sent by
  certified mail to the provider not later than the 15th day before
  the date on which the on-site audit is scheduled to occur.
         SECTION 5.  Section 843.344, Insurance Code, is amended to
  read as follows:
         Sec. 843.344.  APPLICABILITY OF SUBCHAPTER TO ENTITIES
  CONTRACTING WITH HEALTH MAINTENANCE ORGANIZATION. This subchapter
  applies to a person, including a pharmacy benefit manager, with
  whom a health maintenance organization contracts to:
               (1)  process or pay claims;
               (2)  obtain the services of physicians and providers to
  provide health care services to enrollees; or
               (3)  issue verifications or preauthorizations.
         SECTION 6.  Subchapter J, Chapter 843, Insurance Code, is
  amended by adding Sections 843.354, 843.355, and 843.356 to read as
  follows:
         Sec. 843.354.  DEPARTMENT ENFORCEMENT OF PHARMACY CLAIMS.
  (a)  Notwithstanding any other provision of this subchapter, a
  dispute regarding payment of a claim to a provider who is a
  pharmacist or pharmacy shall be resolved as provided by this
  section.
         (b)  A provider who is a pharmacist or pharmacy may submit a
  complaint to the department alleging noncompliance with the
  requirements of this subchapter by a health maintenance
  organization, a pharmacy benefit manager that administers pharmacy
  claims for the health maintenance organization, or another entity
  that contracts with the health maintenance organization as provided
  by Section 843.344. A complaint must be submitted in writing or by
  submitting a completed complaint form to the department by mail or
  through another delivery method. The department shall maintain a
  complaint form on the department's Internet website and at the
  department's offices for use by a complainant.
         (c)  After investigation of the complaint by the department,
  the commissioner shall determine the validity of the complaint and
  shall enter a written order. In the order, the commissioner shall
  provide the health maintenance organization and the complainant
  with:
               (1)  a summary of the investigation conducted by the
  department;
               (2)  written notice of the matters asserted, including
  a statement:
                     (A)  of the legal authority, jurisdiction, and
  alleged conduct under which an enforcement action is imposed or
  denied, with a reference to the statutes and rules involved; and
                     (B)  that, on request to the department, the
  health maintenance organization and the complainant are entitled to
  a hearing conducted by the State Office of Administrative Hearings
  in the manner prescribed by Section 843.355 regarding the
  determinations made in the order; and
               (3)  a determination of the denial of the allegations
  or the imposition of penalties against the health maintenance
  organization.
         (d)  An order issued under Subsection (c) is final in the
  absence of a request by the complainant or health maintenance
  organization for a hearing under Section 843.355.
         (e)  If the department investigation substantiates the
  allegations of noncompliance made under Subsection (b), the
  commissioner, after notice and an opportunity for a hearing as
  described by Subsection (c), shall require the health maintenance
  organization to pay penalties as provided by Section 843.342.
         Sec. 843.355.  HEARING BY STATE OFFICE OF ADMINISTRATIVE
  HEARINGS; FINAL ORDER. (a)  The State Office of Administrative
  Hearings shall conduct a hearing regarding a written order of the
  commissioner under Section 843.354 on the request of the
  department. A hearing under this section is subject to Chapter
  2001, Government Code, and shall be conducted as a contested case
  hearing.
         (b)  After receipt of a proposal for decision issued by the
  State Office of Administrative Hearings after a hearing conducted
  under Subsection (a), the commissioner shall issue a final order.
         (c)  If it appears to the department, the complainant, or the
  health maintenance organization that a person or entity is engaging
  in or is about to engage in a violation of a final order issued under
  Subsection (b), the department, the complainant, or the health
  maintenance organization may bring an action for judicial review in
  district court in Travis County to enjoin or restrain the
  continuation or commencement of the violation or to compel
  compliance with the final order.  The complainant or the health
  maintenance organization may also bring an action for judicial
  review of the final order.
         Sec. 843.356.  LEGISLATIVE DECLARATION. It is the intent of
  the legislature that the requirements contained in this subchapter
  regarding payment of claims to providers who are pharmacists or
  pharmacies apply to all health maintenance organizations and
  pharmacy benefit managers unless otherwise prohibited by federal
  law.
         SECTION 7.  Section 1301.001, Insurance Code, is amended by
  amending Subdivision (1) and adding Subdivision (1-a) to read as
  follows:
               (1)  "Extrapolation" means a mathematical process or
  technique used by an insurer or pharmacy benefit manager that
  administers pharmacy claims for an insurer in the audit of a
  pharmacy or pharmacist to estimate audit results or findings for a
  larger batch or group of claims not reviewed by the insurer or
  pharmacy benefit manager.
               (1-a)  "Health care provider" means a practitioner,
  institutional provider, or other person or organization that
  furnishes health care services and that is licensed or otherwise
  authorized to practice in this state. The term includes a
  pharmacist and a pharmacy. The term does not include a physician.
         SECTION 8.  Section 1301.103, Insurance Code, is amended to
  read as follows:
         Sec. 1301.103.  DEADLINE FOR ACTION ON CLEAN CLAIMS. Except
  as provided by Sections 1301.104 and [Section] 1301.1054, not later
  than the 45th day after the date an insurer receives a clean claim
  from a preferred provider in a nonelectronic format or the 30th day
  after the date an insurer receives a clean claim from a preferred
  provider that is electronically submitted, the insurer shall make a
  determination of whether the claim is payable and:
               (1)  if the insurer determines the entire claim is
  payable, pay the total amount of the claim in accordance with the
  contract between the preferred provider and the insurer;
               (2)  if the insurer determines a portion of the claim is
  payable, pay the portion of the claim that is not in dispute and
  notify the preferred provider in writing why the remaining portion
  of the claim will not be paid; or
               (3)  if the insurer determines that the claim is not
  payable, notify the preferred provider in writing why the claim
  will not be paid.
         SECTION 9.  Section 1301.104, Insurance Code, is amended to
  read as follows:
         Sec. 1301.104.  DEADLINE FOR ACTION ON CERTAIN PHARMACY
  CLAIMS; PAYMENT.  (a)  An [Not later than the 21st day after the
  date an] insurer, or a pharmacy benefit manager that administers
  pharmacy claims for the insurer under a preferred provider benefit
  plan, that affirmatively adjudicates a pharmacy claim that is
  electronically submitted[, the insurer] shall pay the total amount
  of the claim through electronic funds transfer not later than the
  14th day after the date on which the claim was affirmatively
  adjudicated.
         (b)  An insurer, or a pharmacy benefit manager that
  administers pharmacy claims for the insurer under a preferred
  provider benefit plan, that affirmatively adjudicates a pharmacy
  claim that is not electronically submitted shall pay the total
  amount of the claim not later than the 21st day after the date on
  which the claim was affirmatively adjudicated.
         SECTION 10.  Section 1301.105, Insurance Code, is amended by
  adding Subsections (e) and (f) to read as follows:
         (e)  An insurer or a pharmacy benefit manager that
  administers pharmacy claims for the insurer may not use
  extrapolation to complete the audit of a preferred provider that is
  a pharmacist or pharmacy. An insurer may not require extrapolation
  audits as a condition of participation in the insurer's contract,
  network, or program for a preferred provider that is a pharmacist or
  pharmacy.
         (f)  An insurer or a pharmacy benefit manager that
  administers pharmacy claims for the insurer that performs an
  on-site audit of a preferred provider that is a pharmacist or
  pharmacy shall provide the provider reasonable notice of the audit
  and accommodate the provider's schedule to the greatest extent
  possible. The notice required under this subsection must be in
  writing and must be sent by certified mail to the preferred provider
  not later than the 15th day before the date on which the on-site
  audit is scheduled to occur.
         SECTION 11.  Section 1301.109, Insurance Code, is amended to
  read as follows:
         Sec. 1301.109.  APPLICABILITY TO ENTITIES CONTRACTING WITH
  INSURER. This subchapter applies to a person, including a pharmacy
  benefit manager, with whom an insurer contracts to:
               (1)  process or pay claims;
               (2)  obtain the services of physicians and health care
  providers to provide health care services to insureds; or
               (3)  issue verifications or preauthorizations.
         SECTION 12.  Subchapter C-1, Chapter 1301, Insurance Code,
  is amended by adding Sections 1301.139, 1301.140, and 1301.141 to
  read as follows:
         Sec. 1301.139.  DEPARTMENT ENFORCEMENT OF PHARMACY CLAIMS.
  (a)  Notwithstanding any other provision of this subchapter, a
  dispute regarding payment of a claim to a preferred provider who is
  a pharmacist or pharmacy shall be resolved as provided by this
  section.
         (b)  A preferred provider who is a pharmacist or pharmacy may
  submit a complaint to the department alleging noncompliance with
  the requirements of this subchapter by an insurer, a pharmacy
  benefit manager that administers pharmacy claims for the insurer,
  or another entity that contracts with the insurer as provided by
  Section 1301.109. A complaint must be submitted in writing or by
  submitting a completed complaint form to the department by mail or
  through another delivery method. The department shall maintain a
  complaint form on the department's Internet website and at the
  department's offices for use by a complainant.
         (c)  After investigation of the complaint by the department,
  the commissioner shall determine the validity of the complaint and
  shall enter a written order. In the order, the commissioner shall
  provide the insurer and the complainant with:
               (1)  a summary of the investigation conducted by the
  department;
               (2)  written notice of the matters asserted, including
  a statement:
                     (A)  of the legal authority, jurisdiction, and
  alleged conduct under which an enforcement action is imposed or
  denied, with a reference to the statutes and rules involved; and
                     (B)  that, on request to the department, the
  insurer and the complainant are entitled to a hearing conducted by
  the State Office of Administrative Hearings in the manner
  prescribed by Section 1301.140 regarding the determinations made in
  the order; and
               (3)  a determination of the denial of the allegations
  or the imposition of penalties against the insurer.
         (d)  An order issued under Subsection (c) is final in the
  absence of a request by the complainant or insurer for a hearing
  under Section 1301.140.
         (e)  If the department investigation substantiates the
  allegations of noncompliance made under Subsection (b), the
  commissioner, after notice and an opportunity for a hearing as
  described by Subsection (c), shall require the insurer to pay
  penalties as provided by Section 1301.137.
         Sec. 1301.140.  HEARING BY STATE OFFICE OF ADMINISTRATIVE
  HEARINGS; FINAL ORDER.  (a)  The State Office of Administrative
  Hearings shall conduct a hearing regarding a written order of the
  commissioner under Section 1301.139 on the request of the
  department. A hearing under this section is subject to Chapter
  2001, Government Code, and shall be conducted as a contested case
  hearing.
         (b)  After receipt of a proposal for decision issued by the
  State Office of Administrative Hearings after a hearing conducted
  under Subsection (a), the commissioner shall issue a final order.
         (c)  If it appears to the department, the complainant, or the
  insurer that a person or entity is engaging in or is about to engage
  in a violation of a final order issued under Subsection (b), the
  department, the complainant, or the insurer may bring an action for
  judicial review in district court in Travis County to enjoin or
  restrain the continuation or commencement of the violation or to
  compel compliance with the final order.  The complainant or the
  insurer may also bring an action for judicial review of the final
  order.
         Sec. 1301.141.  LEGISLATIVE DECLARATION. It is the intent
  of the legislature that the requirements contained in this
  subchapter regarding payment of claims to preferred providers who
  are pharmacists or pharmacies apply to all insurers and pharmacy
  benefit managers unless otherwise prohibited by federal law.
         SECTION 13.  The change in law made by this Act applies only
  to a claim submitted by a provider to a health maintenance
  organization or an insurer on or after the effective date of this
  Act. A claim submitted before the effective date of this Act is
  governed by the law as it existed immediately before that date, and
  that law is continued in effect for that purpose.
         SECTION 14.  The change in law made by this Act applies only
  to a contract between a pharmacy benefit manager and an insurer or
  health maintenance organization entered into or renewed on or after
  January 1, 2010. A contract entered into or renewed before January
  1, 2010, 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 15.  This Act takes effect September 1, 2009.