84R2120 SCL-D
 
  By: Campbell S.B. No. 1097
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to payment of and disclosures related to certain
  out-of-network provider charges; authorizing a fee; providing a
  penalty.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Chapter 1301, Insurance Code, is amended by
  adding Subchapter C-2 to read as follows:
  SUBCHAPTER C-2. PAYMENT OF OUT-OF-NETWORK PROVIDER CHARGES
         Sec. 1301.141.  DEFINITIONS. In this subchapter:
               (1)  "Clean claim" has the meaning assigned by Section
  1301.101.
               (2)  "Database provider" means a database provider
  certified by the department under Section 1301.1424.
               (3)  "Designated reimbursement information
  organization" means an organization designated by the commissioner
  under Section 1301.1426.
               (4)  "Geozip area" means an area that includes all zip
  codes with the identical first three digits.  For purposes of this
  term, the geozip area is the closest geozip area to the location in
  which the health care service was performed if the location does not
  have a zip code.
               (5)  "Out-of-network provider," with respect to a
  preferred provider benefit plan, means a physician or health care
  provider that is not a preferred provider of the plan.
               (6)  "Purchaser" means an insured under a preferred
  provider benefit plan, regardless of whether the insured pays any
  part of the insured's premium, and a sponsor of the preferred
  provider benefit plan, regardless of whether the sponsor pays any
  part of an insured's premium.
               (7)  "Usual and customary charge" means a charge for a
  service, classified by geozip area and Current Procedural
  Terminology code, that is in the 90th percentile of the charges for
  that service reported to a database provider.
         Sec. 1301.1414.  APPLICABILITY OF SUBCHAPTER. This
  subchapter applies only to an insurer providing a preferred
  provider benefit plan that provides benefits for services provided
  by out-of-network providers.
         Sec. 1301.1415.  PAYMENT OF CERTAIN OUT-OF-NETWORK
  PROVIDERS. (a)  An insurer must use a charge-based methodology that
  complies with this subchapter for computing a payment for a service
  provided by an out-of-network provider if the provider submits a
  clean claim for payment that includes:
               (1)  a certification of the usual and customary charge
  for the service determined by a database provider selected by the
  out-of-network provider; or
               (2)  a certification by a database provider selected by
  the out-of-network provider that there are not sufficient reported
  charges in the database provider's database to establish the usual
  and customary charge for the service.
         (b)  If an out-of-network provider submits a clean claim for
  payment of a charge that includes a certification from a database
  provider selected by the out-of-network provider indicating that
  the billed charge is not higher than the usual and customary charge,
  the insurer shall pay the lesser of the billed charge or the usual
  and customary charge minus any portion of the charge that is the
  insured's responsibility under the preferred provider benefit
  plan.
         (c)  If an out-of-network provider submits a clean claim for
  payment of a charge that includes a certification from a database
  provider selected by the out-of-network provider indicating that
  the billed charge is higher than the usual and customary charge, the
  insurer shall pay the billed charge minus any portion of the charge
  that is the insured's responsibility under the preferred provider
  benefit plan if the billed charge is justifiable considering
  special circumstances under which the services are provided. If
  the charge is not justifiable considering special circumstances
  under which the services are provided, the insurer shall pay the
  usual and customary charge minus any portion of the charge that is
  the insured's responsibility under the preferred provider benefit
  plan.
         (d)  If an out-of-network provider submits a clean claim for
  payment of a charge that includes a certification described by
  Subsection (a)(2) with respect to a billed charge, the insurer
  shall pay 80 percent of the billed charge or an amount equal to the
  90th percentile of the charges for the service reported by the
  designated reimbursement information organization for physicians
  or health care providers in the same geozip area, whichever is less,
  minus any portion of the charge that is the insured's
  responsibility under the preferred provider benefit plan.
         (e)  An insurer may not pay less than an applicable amount
  required under this section because the insurer has not received a
  portion of the charge that is the insured's responsibility.
         Sec. 1301.1416.  PROMPT PAYMENT OF CERTAIN CHARGES. If an
  out-of-network provider submits to an insurer a clean claim for
  payment of a charge that includes a statement from the provider
  indicating that the provider is willing to accept a payment for the
  service, classified by geozip area and Current Procedural
  Terminology code, that is in the 85th percentile of the charges for
  that service reported to a database provider selected by the
  out-of-network provider and the claim for payment is otherwise made
  in accordance with Subchapter C, the claim must be paid in
  accordance with Subchapter C as if the physician or health care
  provider was a preferred provider.
         Sec. 1301.142.  REQUIRED CONTRACT TERMS. The language used
  in the health insurance policy to describe the benefit provided
  under the preferred provider benefit plan for services provided by
  an out-of-network provider:
               (1)  must:
                     (A)  provide that, if a certification described by
  Section 1301.1415(a)(2) with respect to the charge is submitted
  with the claim, payment to an out-of-network provider will be
  computed based on 80 percent of the billed charge or an amount equal
  to the 90th percentile of the charges for the service reported by
  the designated reimbursement information organization for
  physicians or health care providers in the same geozip area,
  whichever is less;
                     (B)  define "usual and customary charge" as that
  term is defined by Section 1301.141; and
                     (C)  incorporate into the definition of "usual and
  customary charge" the definition of "database provider" assigned by
  Section 1301.141; and
               (2)  may not add or subtract language from a definition
  required by this section.
         Sec. 1301.1424.  CERTIFICATION AND QUALIFICATIONS OF
  DATABASE PROVIDER AND DATABASE. (a)  A database provider that is
  used to determine usual and customary charges for the purposes of
  this subchapter must be certified by the department.  The
  department may certify a database provider under this subchapter
  only if the department determines that the database provider and
  the database used by the provider for the purposes of this
  subchapter comply with this section.
         (b)  A database provider must be a nonprofit organization
  that:
               (1)  maintains a database with content that complies
  with this section;
               (2)  maintains an active Internet website accessible to
  all physicians or health care providers subscribing to the database
  and to the public; and
               (3)  demonstrates an ability to:
                     (A)  maintain a compilation of charge data that is
  absent any data required to be excluded under Subsection (e)(1);
  and
                     (B)  distinguish charges that are not related to
  one another and eliminate irrelevant or erroneous charges from
  reported charge information.
         (c)  A database provider must compute usual and customary
  charges for services provided by physicians or health care
  providers in accordance with this subchapter.
         (d)  The data in the database must contain out-of-network
  charges, classified by Current Procedural Terminology code, for
  physician and health care providers in each geozip area in this
  state.
         (e)  The data in the database may not:
               (1)  include:
                     (A)  any data other than out-of-network billed
  charges from physicians and health care providers in this state;
                     (B)  physician and health care provider charges
  that reflect payments discounted under governmental or
  nongovernmental health benefit plans; or
                     (C)  information that is more than seven years
  old; or
               (2)  exclude charges accompanied by modifiers that
  indicate procedures with complications.
         (f)  An entity may not be certified as a database provider
  for the purposes of this subchapter if the entity owns or controls,
  or is owned or controlled by, or is an affiliate of, any entity with
  a pecuniary interest in the application of the database, including
  an insurer, a holding company of an insurer, or a trade association
  in the field of insurance or health benefits.
         (g)  The Internet website required by this section must allow
  an individual to determine the usual and customary charge for a
  particular service provided by a physician or health care provider.
         (h)  The department shall ensure that:
               (1)  the data in the database used to compute usual and
  customary charges of out-of-network providers is updated regularly
  to accurately reflect current physician and health care provider
  retail charges;
               (2)  charge information that is more than seven years
  old is removed from the database; and
               (3)  at least one entity is certified as a database
  provider.
         (i)  The department may charge a fee for certification under
  this section in an amount necessary to implement this section.
         Sec. 1301.1425.  PROVISION OF USUAL AND CUSTOMARY CHARGE BY
  DATABASE PROVIDER. A database provider must compute the usual and
  customary charge for each service for which a billed charge is
  submitted to the insurer by a physician or health care provider that
  subscribes to the database and provide the physician or health care
  provider with a certification of the usual and customary charge or a
  certification described by Section 1301.1415(a)(2), as applicable,
  that is sufficient to enable an insurer to whom the physician or
  health care provider submits a claim for payment to comply with this
  subchapter.
         Sec. 1301.1426.  DESIGNATED REIMBURSEMENT INFORMATION
  ORGANIZATION. (a)  The commissioner by rule shall designate an
  organization described by this section to report charges for
  services provided by physicians and health care providers under
  this subchapter.
         (b)  The organization designated under this section must be
  an independent, not-for-profit organization created to:
               (1)  establish and maintain a database to help insurers
  determine reimbursement rates for out-of-network charges; and
               (2)  provide insureds with a clear, unbiased
  explanation of the reimbursement process.
         Sec. 1301.143.  DISCLOSURES REGARDING PAYMENT OF
  OUT-OF-NETWORK PROVIDER. (a)  An insurer that provides benefits
  under a preferred provider benefit plan for services provided by
  out-of-network providers must disclose in the summary plan
  description, on an Internet website maintained by the insurer, and
  to a prospective purchaser of the plan:
               (1)  the definition of "usual and customary charge"
  assigned by Section 1301.141 and a description of how payment to an
  out-of-network provider will, if applicable, be based on the lesser
  of:
                     (A)  the usual and customary charge for the
  specific procedure that a physician or health care provider bills
  the insurer; or
                     (B)  80 percent of the billed charge or an amount
  equal to the 90th percentile of the charges for the service reported
  by the designated reimbursement information organization for
  physicians and health care providers in the same geozip area;
               (2)  examples of the anticipated portion of the charge
  that will be the insured's responsibility for frequently billed
  health care services by out-of-network providers;
               (3)  a methodology for determining the anticipated
  portion of the charge that will be the insured's responsibility for
  a specific health care service that is based on the amount, not an
  approximation, that the insurer pays;
               (4)  the Internet website addresses of each database
  provider certified under this subchapter at which a purchaser or
  prospective purchaser may access the database or a single website
  address at which an updated set of links to the website addresses of
  those database providers may be accessed; and
               (5)  a statement that if the insurer's payment due under
  the plan's out-of-network benefit provisions is not sufficient to
  cover the total billed charge, the physician or health care
  provider agrees to accept as payment in full the amount paid by the
  plan in accordance with those provisions plus any portion of the
  charge that is the insured's responsibility under the plan.
         (b)  Disclosures under this section must:
               (1)  be made in language easily understood by
  purchasers and prospective purchasers of preferred provider
  benefit plans;
               (2)  be made in a uniform, clearly organized manner;
               (3)  be of sufficient detail and comprehensiveness as
  to provide for full and fair disclosure; and
               (4)  be updated as necessary to ensure that the
  disclosures are accurate.
         Sec. 1301.1434.  ANNUAL ACTUARIAL CERTIFICATION. (a)  An
  insurer that offers a preferred provider benefit plan that provides
  coverage for services provided by out-of-network providers must
  annually submit to the department a written certification stating:
               (1)  the difference in value for a purchaser between:
                     (A)  the coverage without the out-of-network
  provider benefits; and
                     (B)  the coverage with the out-of-network
  provider benefits; and
               (2)  that the difference between the amount a purchaser
  would be charged for the coverage without the out-of-network
  provider benefits and the amount that a purchaser would be charged
  for the coverage with the out-of-network provider benefits reflects
  the difference in value certified under Subdivision (1).
         (b)  The certification must be made in easily understood
  language, in a uniform, clearly organized manner, and be of
  sufficient detail and comprehensiveness as to provide for full and
  fair disclosure to an average consumer. The difference between the
  value of the coverage without the out-of-network provider benefits
  and the coverage with the out-of-network provider benefits must be
  expressed in terms of a percentage, although use of a percentage
  alone is not sufficient to satisfy the requirements of this
  section.
         (c)  The certification must be made by an actuary who is
  certified by a nationally recognized actuarial certification
  organization recognized by the commissioner and who is not
  affiliated with the insurer or any of the insurer's affiliates.
         (d)  An insurer must make the certification required by this
  section readily available to the public.
         Sec. 1301.1435.  PAYMENT IN FULL. If the insurer's payment
  due under a preferred provider benefit plan's out-of-network
  benefit provisions is not sufficient to cover the total billed
  charge, a physician or health care provider agrees to accept as
  payment in full the amount paid by the plan in accordance with those
  provisions plus any portion of the charge that is the insured's
  responsibility under the plan.
         Sec. 1301.1436.  REMEDIES. (a)  An insurer that violates
  Section 1301.1416 is subject to the penalties imposed under Section
  1301.137 as if the out-of-network provider was a preferred
  provider.
         (b)  The remedies provided by this section are in addition to
  remedies available under any other provision of this code.
         SECTION 2.  Subchapter C-2, Chapter 1301, Insurance Code, as
  added by this Act, applies only to charges for services provided to
  an insured under a health insurance policy delivered, issued for
  delivery, or renewed on or after January 1, 2016. Charges for
  services provided to an insured under a policy delivered, issued
  for delivery, or renewed before January 1, 2016, are governed by the
  law in effect immediately before the effective date of this Act, and
  that law is continued in effect for that purpose.
         SECTION 3.  This Act takes effect September 1, 2015.