83R2991 SCL-D
 
  By: Bonnen of Galveston H.B. No. 2360
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to the disclosure of health care costs and related
  information.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Subtitle F, Title 8, Insurance Code, is amended
  by adding Chapter 1470 to read as follows:
  CHAPTER 1470. DISCLOSURE OF PAYMENT AND COMPENSATION METHODOLOGY
         Sec. 1470.001.  DEFINITIONS. In this chapter, unless the
  context otherwise requires:
               (1)  "Edit" means a practice or procedure under which
  an adjustment is made regarding procedure codes that results in:
                     (A)  payment for some, but not all, of the health
  care procedures performed under a procedure code;
                     (B)  payment made under a different procedure
  code;
                     (C)  a reduced payment as a result of services
  provided to a patient that are claimed under more than one procedure
  code on the same service date;
                     (D)  a reduced payment related to a modifier used
  with a procedure code; or
                     (E)  a reduced payment based on multiple units of
  the same procedure code billed for a single date of service.
               (2)  "Health benefit plan issuer" means:
                     (A)  an insurance company, association,
  organization, group hospital service corporation, health
  maintenance organization, or pharmacy benefit manager that
  delivers or issues for delivery an individual, group, blanket, or
  franchise insurance policy or insurance agreement, a group hospital
  service contract, or an evidence of coverage that provides health
  insurance or health care benefits and includes:
                           (i)  a life, health, or accident insurance
  company operating under Chapter 841 or 982;
                           (ii)  a general casualty insurance company
  operating under Chapter 861;
                           (iii)  a fraternal benefit society operating
  under Chapter 885;
                           (iv)  a mutual life insurance company
  operating under Chapter 882;
                           (v)  a local mutual aid association
  operating under Chapter 886;
                           (vi)  a statewide mutual assessment company
  operating under Chapter 881;
                           (vii)  a mutual assessment company or mutual
  assessment life, health, and accident association operating under
  Chapter 887;
                           (viii)  a mutual insurance company operating
  under Chapter 883 that writes coverage other than life insurance;
                           (ix)  a Lloyd's plan operating under Chapter
  941;
                           (x)  a reciprocal exchange operating under
  Chapter 942;
                           (xi)  a stipulated premium insurance company
  operating under Chapter 884;
                           (xii)  an exchange operating under Chapter
  942;
                           (xiii)  a Medicare supplemental policy as
  defined by Section 1882(g)(1), Social Security Act (42 U.S.C.
  Section 1395ss(g)(1);
                           (xiv)  a Medicaid managed care program
  operated under Chapter 533, Government Code;
                           (xv)  a health maintenance organization
  operating under Chapter 843;
                           (xvi)  a multiple employer welfare
  arrangement that holds a certificate of authority under Chapter
  846; and
                           (xvii)  an approved nonprofit health
  corporation that holds a certificate of authority under Chapter
  844;
                     (B)  the state Medicaid program operated under
  Chapter 32, Human Resources Code, or the state child health plan or
  health benefits plan for children under Chapter 62 or 63, Health and
  Safety Code;
                     (C)  the Employees Retirement System of Texas or
  another entity issuing or administering a basic coverage plan under
  Chapter 1551;
                     (D)  the Teacher Retirement System of Texas or
  another entity issuing or administering a basic plan under Chapter
  1575 or a primary care coverage plan under Chapter 1579;
                     (E)  The Texas A&M University System or The
  University of Texas System or another entity issuing or
  administering basic coverage under Chapter 1601; and
                     (F)  an entity issuing or administering medical
  benefits provided under a workers' compensation insurance policy or
  otherwise under Title 5, Labor Code.
               (3)  "Health care contract" means a contract entered
  into or renewed between a health care contractor and a physician or
  health care provider for the delivery of health care services to
  others.
               (4)  "Health care contractor" means an individual or
  entity that has as a business purpose contracting with physicians
  or health care providers for the delivery of health care services.
  The term includes a health benefit plan issuer, an administrator
  regulated under Chapter 4151, and a pharmacy benefit manager that
  administers or manages prescription drug benefits.
               (5)  "Health care provider" means an individual or
  entity that furnishes goods or services under a license,
  certificate, registration, or other authority issued by this state
  to diagnose, prevent, alleviate, or cure a human illness or injury.  
  The term includes a physician or a hospital or other health care
  facility.
               (6)  "Physician" means:
                     (A)  an individual licensed to engage in the
  practice of medicine in this state; or
                     (B)  an entity organized under Subchapter B,
  Chapter 162, Occupations Code.
               (7)  "Procedure code" means an alphanumeric code used
  to identify a specific health procedure performed by a health care
  provider. The term includes:
                     (A)  the American Medical Association's Current
  Procedural Terminology code, also known as the "CPT code";
                     (B)  the Centers for Medicare and Medicaid
  Services Health Care Common Procedure Coding System; and
                     (C)  other analogous codes published by national
  organizations and recognized by the commissioner.
         Sec. 1470.002.  DEFINITION OF MATERIAL CHANGE. For purposes
  of this chapter, "material change" means a change to a contract that
  decreases the health care provider's payment or compensation.
         Sec. 1470.003.  APPLICABILITY OF CHAPTER. (a) This chapter
  does not apply to an employment contract or arrangement between
  health care providers.
         (b)  Notwithstanding Subsection (a), this chapter applies to
  contracts for health care services between a medical group and
  other medical groups.
         Sec. 1470.004.  RULEMAKING AUTHORITY. The commissioner may
  adopt reasonable rules as necessary to implement the purposes and
  provisions of this chapter.
         Sec. 1470.005.  DISCLOSURE TO THIRD PARTY. A health care
  contract may not preclude the use of the contract or disclosure of
  the contract to a third party to enforce this chapter or other state
  or federal law. The third party is bound by any applicable
  confidentiality requirements, including those stated in the
  contract.
         Sec. 1470.006.  REQUIRED DISCLOSURE OF PAYMENT AND
  COMPENSATION TERMS. (a) Each health care contract must include a
  disclosure form that states, in plain language, payment and
  compensation terms. The form must include information sufficient
  for a health care provider to determine the compensation or payment
  for the provider's services.
         (b)  The disclosure form under Subsection (a) must include:
               (1)  the manner of payment, such as fee-for-service,
  capitation, or risk sharing;
               (2)  the methodology used to compute any fee schedule,
  such as the use of a relative value unit system and conversion
  factor, percentage of Medicare payment system, or percentage of
  billed charges;
               (3)  the fee schedule for procedure codes reasonably
  expected to be billed by the health care provider for services
  provided under the contract and, on request, the fee schedule for
  other procedure codes used by, or that may be used by, the health
  care provider; and
               (4)  the effect of edits, if any, on payment or
  compensation.
         (c)  As applicable, the methodology disclosure under
  Subsection (b)(2) must include:
               (1)  the name of any relative value system used;
               (2)  the version, edition, or publication date of that
  system;
               (3)  any applicable conversion or geographic factors;
  and
               (4)  the date by which compensation or fee schedules
  may be changed by the methodology, if allowed under the contract.
         (d)  The fee schedule described by Subsection (b)(3) must
  include, as applicable, service or procedure codes and the
  associated payment or compensation for each code. The fee schedule
  may be provided electronically.
         (e)  A health care contractor shall provide the fee schedule
  described by Subsection (b)(3) to an affected health care provider
  when a material change related to payment or compensation occurs.
  Additionally, a health care provider may request that a written fee
  schedule be provided up to twice annually, and the health care
  contractor must provide the written fee schedule promptly.
         (f)  A health care contractor may satisfy the requirement
  under Subsection (b)(4) regarding the effect of edits by providing
  a clearly understandable, readily available mechanism that allows a
  health care provider to determine the effect of an edit on payment
  or compensation before a service is provided or a claim is
  submitted.
         Sec. 1470.007.  ENFORCEMENT. (a) The commissioner shall
  adopt rules as necessary to enforce the provisions of this chapter.
         (b)  A violation of Section 1470.006 is a deceptive act or
  practice in insurance under Subchapter B, Chapter 541.
         SECTION 2.  Subtitle A, Title 3, Occupations Code, is
  amended by adding Chapter 118 to read as follows:
  CHAPTER 118. REQUIRED DISCLOSURE OF HEALTH CARE COSTS
         Sec. 118.001.  DEFINITIONS. In this chapter:
               (1)  "Consumer" means an individual who seeks or
  acquires health care goods, including drugs or devices, or services
  from a health care provider.
               (2)  "Department" means the Texas Department of
  Licensing and Regulation.
               (3)  "Health care contractor" has the meaning assigned
  by Section 1470.001, Insurance Code.
               (4)  "Health care provider" means a person who
  furnishes goods or services under a license, certificate,
  registration, or other authority issued by this state to diagnose,
  prevent, alleviate, or cure a human illness or injury.  The term
  includes a physician or a hospital or other health care facility.
         Sec. 118.002.  RULEMAKING AUTHORITY. The department may
  adopt reasonable rules as necessary to implement the purposes and
  provisions of this chapter.
         Sec. 118.003.  DISCLOSURE OF HEALTH CARE COSTS. (a) A
  health care provider must disclose to a consumer before the
  commencement of a health care service or the transfer of a health
  care good, including a drug or device, the itemized cost of the
  service or good.
         (b)  The itemized cost of the service or good must separately
  state all significant components of the cost, including, if
  applicable:
               (1)  the contracted rates of the health care provider;
               (2)  the fee schedule of the consumer's health plan
  issuer;
               (3)  the cost of the consumer's specific medical or
  health care procedure;
               (4)  the cost of other health care providers involved
  in the service or good;
               (5)  the cost of stay at a hospital or other health care
  facility; and
               (6)  the price the manufacturer or wholesaler of the
  health care good charged for the good sold to the health care
  provider.
         (c)  The disclosure may be made through the health care
  provider's Internet website or in writing given to the consumer
  before the commencement of the health care service or the transfer
  of the health care good. If the disclosure was given through the
  provider's Internet website, the provider shall inform the consumer
  in writing, before the commencement of the service or transfer of
  the good, that health care costs are disclosed on the provider's
  website.
         Sec. 118.004.  FAILURE TO DISCLOSE. (a) A provider that
  fails to disclose the information as described by this section
  cannot recover a fee, a deductible, a copayment, or any other
  payment or obligation from the consumer related to a health care
  service or good for which the provider did not disclose the itemized
  costs.
         (b)  Notwithstanding Subsection (a), a health care provider
  may recover the amount of a payment or other obligation owed to the
  provider from a consumer if the cause of the failure to disclose was
  a health care contractor's failure to disclose information under
  Section 1470.005, Insurance Code.
         SECTION 3.  (a) Chapter 1470, Insurance Code, as added by
  this Act, applies only to a health care contract that is entered
  into or renewed on or after January 1, 2014. A health care contract
  entered into before January 1, 2014, 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.
         (b)  Chapter 118, Occupations Code, as added by this Act,
  applies only to a health care service that is commenced or a health
  care good that is transferred on or after the effective date of this
  Act. A health care service that is commenced or a health care good
  that is transferred before the effective date of this Act is
  governed by the law in effect immediately before the effective date
  of this Act, and that law is continued in effect for that purpose.
         SECTION 4.  This Act takes effect September 1, 2013.