84R7389 SCL-F

By: Taylor of Galveston S.B. No. 1562

A BILL TO BE ENTITLED

AN ACT

relating to nonpreferred provider claims under a preferred provider benefit plan related to emergency care.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Chapter 1301, Insurance Code, is amended by adding Subchapter F to read as follows:

SUBCHAPTER F. NONPREFERRED PROVIDER CLAIMS RELATED TO EMERGENCY

CARE PROVIDED TO INSUREDS; ARBITRATION

Sec. 1301.251. DEFINITIONS. In this subchapter:

(1) "Chief administrative law judge" means the chief administrative law judge of the State Office of Administrative Hearings.

(2) "Emergency care" has the meaning assigned by Section 1301.155.

Sec. 1301.252. APPLICABILITY OF SUBCHAPTER. (a) This subchapter does not apply to health care services, including emergency care, in which physician fees are subject to schedules or other monetary limitations under any other law, including workers' compensation under Title 5, Labor Code.

(b) This subchapter applies only to emergency care provided:

(1) to an insured;

(2) within a hospital, freestanding emergency medical care facility, or similar facility that is a preferred provider; and

(3) by a facility-based physician or health care provider who is a nonpreferred provider.

(c) This subchapter does not apply to:

(1) the Employees Retirement System of Texas or another entity issuing or administering a basic coverage plan under Chapter 1551;

(2) the Teacher Retirement System of Texas or another entity issuing or administering a basic plan under Chapter 1575 or a health coverage plan under Chapter 1579; or

(3) The Texas A&M University System or The University of Texas System or another entity issuing or administering basic coverage under Chapter 1601.

Sec. 1301.253. PAYMENT OF NONPREFERRED PROVIDER BILL. Notwithstanding Section 1301.005 or any other law, an insurer shall pay a nonpreferred provider a reasonable amount for emergency care provided by the nonpreferred provider to an insured.

Sec. 1301.254. HOLD HARMLESS FOR INSUREDS. A nonpreferred provider may not bill an insured eligible to receive services under a preferred provider benefit plan, and the insured is not liable to the provider, for emergency care provided in a hospital, freestanding emergency medical care facility, or similar facility that is a preferred provider except for any applicable copayment, coinsurance, or deductible that would be owed if the provider was a preferred provider under the plan.

Sec. 1301.255. ARBITRATOR QUALIFICATIONS. (a) Except as provided by Subsection (b), to qualify for an appointment as an arbitrator under this subchapter, a person must have completed at least 40 classroom hours of training in dispute resolution techniques in a course conducted by an alternative dispute resolution organization or other dispute resolution organization approved by the chief administrative law judge.

(b) A person not qualified under Subsection (a) may be appointed as an arbitrator on agreement of the parties.

(c) A person may not act as an arbitrator for a claim settlement dispute if the person has been employed by, consulted for, or otherwise had a business relationship with an insurer offering the preferred provider benefit plan or a health care provider during the three years immediately preceding the request for arbitration.

Sec. 1301.256. APPOINTMENT OF ARBITRATOR. (a) An arbitration under this subchapter shall be conducted by one arbitrator.

(b) The chief administrative law judge shall appoint the arbitrator through a random assignment from a list of qualified arbitrators maintained by the State Office of Administrative Hearings.

(c) Notwithstanding Subsection (b), a person other than an arbitrator appointed by the chief administrative law judge may conduct the arbitration on agreement of all of the parties and notice to the chief administrative law judge.

Sec. 1301.257. REQUEST AND PRELIMINARY PROCEDURES FOR ARBITRATION. (a) If a dispute arises over the nonpreferred provider's fee or the insurer's payment to the provider, the provider or insurer may request arbitration under this subchapter.

(b) A request for arbitration must be provided to the department on a form prescribed by the commissioner and must include:

(1) the name of the nonpreferred provider and insurer;

(2) a brief description of the claim to be resolved, including the nonpreferred provider's fee and the insurer's payment to the provider;

(3) contact information, including a telephone number, for the requesting party and the party's counsel, if the party retains counsel; and

(4) any other information the commissioner may require by rule.

(c) On receipt of a request for arbitration, the department shall notify the nonpreferred provider, insurer, and insured of the request. In the notice to the insured, the department must explain in plain language the amount billed by the provider, the amount paid by the insurer, that either the provider or insurer has requested arbitration, and that the insured has a right to participate in the informal settlement teleconference or arbitration.

(d) In an effort to settle the claim before arbitration, the nonpreferred provider and insurer shall participate in an informal settlement teleconference not later than the 30th day after the date on which a party submits a request for arbitration under this section. The insured may elect to participate in the teleconference.

(e) A claim to be resolved under this subchapter that does not settle as a result of a teleconference conducted under Subsection (d) must be referred to the State Office of Administrative Hearings by the department, and an arbitration hearing must be conducted in the county in which the medical services were rendered.

(f) The State Office of Administrative Hearings may implement measures, including an additional informal settlement teleconference, to encourage early and informal resolution to a billing dispute before arbitration commences.

(g) The insured may elect to participate in the arbitration.

Sec. 1301.258. CONDUCT OF ARBITRATION. (a) In arbitration conducted under this subchapter, an arbitrator shall determine whether the nonpreferred provider's billed charge or the insurer's payment to the provider is the reasonable amount to be paid for the emergency care that is the basis for the claim. In determining the amount to be paid, the arbitrator shall consider the criteria under Section 1301.259.

(b) An arbitrator shall determine the amount to be paid not later than the 30th day after the date the arbitrator receives the claim.

(c) If an arbitrator determines, based on the nonpreferred provider's billed charge and insurer's payment, that a settlement between the provider and insurer is reasonably likely or that both the provider's billed charge and insurer's payment represent unreasonable extremes, then the arbitrator may require the parties to negotiate in good faith for a settlement. The arbitrator may grant the parties not more than 10 business days for the negotiation, which run concurrently with the 30-day period for arbitration.

(d) Except as provided by this subchapter, the arbitrator must hold in strict confidence all information provided to the arbitrator by a party and all communications of the arbitrator with a party.

(e) A party must have an opportunity during the arbitration to speak and state the party's position.

(f) The arbitrator may:

(1) receive in evidence any documentary evidence or other information the arbitrator considers relevant;

(2) administer oaths; and

(3) issue subpoenas to require:

(A) the attendance and testimony of witnesses; and

(B) the production of books, records, and other evidence relevant to a claim presented for arbitration.

(g) The determination of an arbitrator is binding on the nonpreferred provider and insurer and is admissible in court or in an administrative proceeding.

Sec. 1301.259. CRITERIA FOR DETERMINING PAYMENT AMOUNT. In determining the appropriate amount to be paid for the emergency care, the arbitrator shall consider all relevant factors, including:

(1) whether there is a gross disparity between the billed charge for the same services rendered by the nonpreferred provider as compared to:

(A) payments to the provider for the same services rendered by the provider to other patients in preferred provider benefit plans in which the provider is a nonpreferred provider; and

(B) payments by the insurer to reimburse similarly qualified nonpreferred providers for the same services in the same region;

(2) the level of training, education, and experience of the nonpreferred provider;

(3) the nonpreferred provider's usual charge for comparable services with regard to insureds in preferred provider benefit plans in which the provider is a nonpreferred provider;

(4) the circumstances and complexity of the particular case, including time and place of the services;

(5) individual patient characteristics; and

(6) the usual and customary cost of the service.

Sec. 1301.260. PAYMENT FOR ARBITRATION COSTS. (a) If an arbitrator determines the insurer's payment as the amount to be paid, the nonpreferred provider shall pay the arbitration costs.

(b) If an arbitrator determines the nonpreferred provider's billed charge as the amount to be paid, the insurer shall pay the arbitration costs.

(c) If good faith negotiation under Section 1301.258(c) results in a settlement between the nonpreferred provider and insurer, the provider and insurer shall evenly divide and share the costs of arbitration.

SECTION 2. Subchapter A, Chapter 1467, Insurance Code, is amended by adding Section 1467.0021 to read as follows:

Sec. 1467.0021. CERTAIN CLAIMS EXCLUDED. This chapter does not apply to a claim with respect to which Subchapter F, Chapter 1301, applies.

SECTION 3. The change in law made by this Act applies only to a payment for emergency care provided by a nonpreferred provider at a health care facility that is a preferred provider on or after January 1, 2016. Payment for emergency care provided before January 1, 2016, 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, 2015.