By: Bonnen of Galveston H.B. No. 4016

A BILL TO BE ENTITLED

AN ACT

relating to payment of and disclosures related to certain out-of-network provider charges; 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) "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.

(2) "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.

(3) "Usual and customary charge" means 135% of the highest allowed charge for a service, classified by geozip area and Current Procedural Terminology code.

Sec. 1301.1414. APPLICABILITY OF SUBCHAPTER. (a) This subchapter applies only to an insurer providing a preferred provider benefit plan that provides benefits for services provided by out-of-network providers.

(b) 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; and

(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. 1301.1415. PAYMENT OF CERTAIN OUT-OF-NETWORK PROVIDERS. (a) If an out-of-network provider submits to an insurer a claim for payment of a charge that is less than or equal to the usual and customary charge for the service provided and includes an election by the out-of-network provider to participate in this subchapter, the insurer shall pay the charge minus any portion of the charge that is the insured's responsibility under the preferred provider benefit plan.

(b) An insurer may not pay less than the amount the insurer is required to pay 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 CLAIMS. If an out-of-network provider submits to an insurer a claim described by Section 1301.1415, the insurer shall pay the claim in accordance with Subchapter C as if the physician or health care provider were a preferred provider.

Sec. 1301.142. 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;

(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; and

(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.

(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. 1301.1425. PAYMENT IN FULL. If the insurer's payment due under a preferred provider benefit plan's out-of-network benefit provisions is greater than or equal to the usual and customary charge but is not sufficient to cover the total billed charge, an out-of-network provider electing to participate in this subchapter 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. 1301.143. 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 were 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, 2018. Charges for services provided to an insured under a policy delivered, issued for delivery, or renewed before January 1, 2018, 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, 2017.