By: Hancock  S.B. No. 507
         (In the Senate - Filed January 17, 2017; February 6, 2017,
  read first time and referred to Committee on Business & Commerce;
  March 16, 2017, reported adversely, with favorable Committee
  Substitute by the following vote:  Yeas 8, Nays 1; March 16, 2017,
  sent to printer.)
Click here to see the committee vote
 
  COMMITTEE SUBSTITUTE FOR S.B. No. 507 By:  Hancock
 
 
A BILL TO BE ENTITLED
 
AN ACT
 
  relating to mediation of the settlement of certain out-of-network
  health benefit claims involving balance billing.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Section 1467.001, Insurance Code, is amended by
  amending Subdivisions (1), (3), (4), (5), and (7) and adding
  Subdivisions (2-a), (2-b), (3-a), and (4-a) to read as follows:
               (1)  "Administrator" means:
                     (A)  an administering firm for a health benefit
  plan providing coverage under Chapter 1551, 1575, or 1579; and
                     (B)  if applicable, the claims administrator for
  the health benefit plan.
               (2-a)  "Emergency care" has the meaning assigned by
  Section 1301.155.
               (2-b)  "Emergency care provider" means a physician,
  health care practitioner, facility, or other health care provider
  who provides and bills an enrollee, administrator, or health
  benefit plan for emergency care.
               (3)  "Enrollee" means an individual who is eligible to
  receive benefits through a preferred provider benefit plan or a
  health benefit plan under Chapter 1551, 1575, or 1579.
               (3-a)  "Facility" has the meaning assigned by Section
  324.001, Health and Safety Code.
               (4)  "Facility-based provider [physician]" means a
  physician, health care practitioner, or other health care provider
  [radiologist, an anesthesiologist, a pathologist, an emergency
  department physician, a neonatologist, or an assistant surgeon:
                     [(A)     to whom the facility has granted clinical
  privileges; and
                     [(B)]  who provides health care or medical 
  services to patients of a [the] facility [under those clinical
  privileges].
               (4-a)  "Health care practitioner" means an individual
  who is licensed to provide health care services.
               (5)  "Mediation" means a process in which an impartial
  mediator facilitates and promotes agreement between the insurer
  offering a preferred provider benefit plan or the administrator and
  a facility-based provider or emergency care provider [physician] or
  the provider's [physician's] representative to settle a health
  benefit claim of an enrollee.
               (7)  "Party" means an insurer offering a preferred
  provider benefit plan, an administrator, or a facility-based
  provider or emergency care provider [physician] or the provider's
  [physician's] representative who participates in a mediation
  conducted under this chapter.  The enrollee is also considered a
  party to the mediation.
         SECTION 2.  Section 1467.002, Insurance Code, is amended to
  read as follows:
         Sec. 1467.002.  APPLICABILITY OF CHAPTER. This chapter
  applies to:
               (1)  a preferred provider benefit plan offered by an
  insurer under Chapter 1301; and
               (2)  an administrator of a health benefit plan, other
  than a health maintenance organization plan, under Chapter 1551,
  1575, or 1579.
         SECTION 3.  Section 1467.003, Insurance Code, is amended to
  read as follows:
         Sec. 1467.003.  RULES. The commissioner, the Texas Medical
  Board, any other appropriate regulatory agency, and the chief
  administrative law judge shall adopt rules as necessary to
  implement their respective powers and duties under this chapter.
         SECTION 4.  Section 1467.005, Insurance Code, is amended to
  read as follows:
         Sec. 1467.005.  REFORM. This chapter may not be construed to
  prohibit:
               (1)  an insurer offering a preferred provider benefit
  plan or administrator from, at any time, offering a reformed claim
  settlement; or
               (2)  a facility-based provider or emergency care
  provider [physician] from, at any time, offering a reformed charge
  for health care or medical services or supplies.
         SECTION 5.  Section 1467.051, Insurance Code, is amended to
  read as follows:
         Sec. 1467.051.  AVAILABILITY OF MANDATORY MEDIATION;
  EXCEPTION.  (a)  An enrollee may request mediation of a settlement
  of an out-of-network health benefit claim if:
               (1)  the amount for which the enrollee is responsible
  to a facility-based provider or emergency care provider
  [physician], after copayments, deductibles, and coinsurance,
  including the amount unpaid by the administrator or insurer, is
  greater than $500; and
               (2)  the health benefit claim is for:
                     (A)  emergency care; or
                     (B)  a health care or medical service or supply
  provided by a facility-based provider [physician] in a facility
  [hospital] that is a preferred provider or that has a contract with
  the administrator.
         (b)  Except as provided by Subsections (c) and (d), if an
  enrollee requests mediation under this subchapter, the
  facility-based provider or emergency care provider, [physician] or
  the provider's [physician's] representative, and the insurer or the
  administrator, as appropriate, shall participate in the mediation.
         (c)  Except in the case of an emergency and if requested by
  the enrollee, a facility-based provider [physician] shall, before
  providing a health care or medical service or supply, provide a
  complete disclosure to an enrollee that:
               (1)  explains that the facility-based provider
  [physician] does not have a contract with the enrollee's health
  benefit plan;
               (2)  discloses projected amounts for which the enrollee
  may be responsible; and
               (3)  discloses the circumstances under which the
  enrollee would be responsible for those amounts.
         (d)  A facility-based provider [physician] who makes a
  disclosure under Subsection (c) and obtains the enrollee's written
  acknowledgment of that disclosure may not be required to mediate a
  billed charge under this subchapter if the amount billed is less
  than or equal to the maximum amount projected in the disclosure.
         SECTION 6.  Subchapter B, Chapter 1467, Insurance Code, is
  amended by adding Section 1467.0511 to read as follows:
         Sec. 1467.0511.  NOTICE AND INFORMATION PROVIDED TO
  ENROLLEE.  (a)  A bill sent to an enrollee by a facility-based
  provider or emergency care provider or an explanation of benefits
  sent to an enrollee by an insurer or administrator for an
  out-of-network health benefit claim eligible for mediation under
  this chapter must contain, in not less than 10-point boldface type,
  a conspicuous, plain-language explanation of the mediation process
  available under this chapter, including information on how to
  request mediation and a statement that is substantially similar to
  the following:
         "You may be able to reduce some of your out-of-pocket costs
  for an out-of-network medical or health care claim that is eligible
  for mediation by contacting the Texas Department of Insurance at
  (website) and (phone number)."
         (b)  If an enrollee contacts an insurer, administrator,
  facility-based provider, or emergency care provider about a bill
  that may be eligible for mediation under this chapter, the insurer,
  administrator, facility-based provider, or emergency care provider
  is encouraged to:
               (1)  inform the enrollee about mediation under this
  chapter; and
               (2)  provide the enrollee with the department's
  toll-free telephone number and Internet website address.
         SECTION 7.  Section 1467.052(c), Insurance Code, is amended
  to read as follows:
         (c)  A person may not act as mediator 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 physician, health care
  practitioner, or other health care provider during the three years
  immediately preceding the request for mediation.
         SECTION 8.  Section 1467.053(d), Insurance Code, is amended
  to read as follows:
         (d)  The mediator's fees shall be split evenly and paid by
  the insurer or administrator and the facility-based provider or
  emergency care provider [physician].
         SECTION 9.  Sections 1467.054(b), (c), and (e), Insurance
  Code, are amended to read as follows:
         (b)  A request for mandatory mediation must be provided to
  the department on a form prescribed by the commissioner and must
  include:
               (1)  the name of the enrollee requesting mediation;
               (2)  a brief description of the claim to be mediated;
               (3)  contact information, including a telephone
  number, for the requesting enrollee and the enrollee's counsel, if
  the enrollee retains counsel;
               (4)  the name of the facility-based provider or
  emergency care provider [physician] and name of the insurer or
  administrator; and
               (5)  any other information the commissioner may require
  by rule.
         (c)  On receipt of a request for mediation, the department
  shall notify the facility-based provider or emergency care provider
  [physician] and insurer or administrator of the request.
         (e)  A dispute to be mediated under this chapter that does
  not settle as a result of a teleconference conducted under
  Subsection (d) must be conducted in the county in which the health
  care or medical services were rendered.
         SECTION 10.  Sections 1467.055(d), (h), and (i), Insurance
  Code, are amended to read as follows:
         (d)  If the enrollee is participating in the mediation in
  person, at the beginning of the mediation the mediator shall inform
  the enrollee that if the enrollee is not satisfied with the mediated
  agreement, the enrollee may file a complaint with:
               (1)  the Texas Medical Board or other appropriate
  regulatory agency against the facility-based provider or emergency
  care provider [physician] for improper billing; and
               (2)  the department for unfair claim settlement
  practices.
         (h)  On receipt of notice from the department that an
  enrollee has made a request for mediation that meets the
  requirements of this chapter, the facility-based provider or
  emergency care provider [physician] may not pursue any collection
  effort against the enrollee who has requested mediation for amounts
  other than copayments, deductibles, and coinsurance before the
  earlier of:
               (1)  the date the mediation is completed; or
               (2)  the date the request to mediate is withdrawn.
         (i)  A health care or medical service or supply provided by a
  facility-based provider or emergency care provider [physician] may
  not be summarily disallowed.  This subsection does not require an
  insurer or administrator to pay for an uncovered service or supply.
         SECTION 11.  Sections 1467.056(a), (b), and (d), Insurance
  Code, are amended to read as follows:
         (a)  In a mediation under this chapter, the parties shall:
               (1)  evaluate whether:
                     (A)  the amount charged by the facility-based
  provider or emergency care provider [physician] for the health care
  or medical service or supply is excessive; and
                     (B)  the amount paid by the insurer or
  administrator represents the usual and customary rate for the
  health care or medical service or supply or is unreasonably low; and
               (2)  as a result of the amounts described by
  Subdivision (1), determine the amount, after copayments,
  deductibles, and coinsurance are applied, for which an enrollee is
  responsible to the facility-based provider or emergency care
  provider [physician].
         (b)  The facility-based provider or emergency care provider
  [physician] may present information regarding the amount charged
  for the health care or medical service or supply. The insurer or
  administrator may present information regarding the amount paid by
  the insurer or administrator.
         (d)  The goal of the mediation is to reach an agreement among
  the enrollee, the facility-based provider or emergency care
  provider [physician], and the insurer or administrator, as
  applicable, as to the amount paid by the insurer or administrator to
  the facility-based provider or emergency care provider
  [physician], the amount charged by the facility-based provider or
  emergency care provider [physician], and the amount paid to the
  facility-based provider or emergency care provider [physician] by
  the enrollee.
         SECTION 12.  Section 1467.057(a), Insurance Code, is amended
  to read as follows:
         (a)  The mediator of an unsuccessful mediation under this
  chapter shall report the outcome of the mediation to the
  department, the Texas Medical Board or other appropriate regulatory
  agency, and the chief administrative law judge.
         SECTION 13.  Section 1467.058, Insurance Code, is amended to
  read as follows:
         Sec. 1467.058.  CONTINUATION OF MEDIATION. After a referral
  is made under Section 1467.057, the facility-based provider or
  emergency care provider [physician] and the insurer or
  administrator may elect to continue the mediation to further
  determine their responsibilities. Continuation of mediation under
  this section does not affect the amount of the billed charge to the
  enrollee.
         SECTION 14.  Section 1467.059, Insurance Code, is amended to
  read as follows:
         Sec. 1467.059.  MEDIATION AGREEMENT. The mediator shall
  prepare a confidential mediation agreement and order that states:
               (1)  the total amount for which the enrollee will be
  responsible to the facility-based provider or emergency care
  provider [physician], after copayments, deductibles, and
  coinsurance; and
               (2)  any agreement reached by the parties under Section
  1467.058.
         SECTION 15.  Section 1467.060, Insurance Code, is amended to
  read as follows:
         Sec. 1467.060.  REPORT OF MEDIATOR. The mediator shall
  report to the commissioner and the Texas Medical Board or other
  appropriate regulatory agency:
               (1)  the names of the parties to the mediation; and
               (2)  whether the parties reached an agreement or the
  mediator made a referral under Section 1467.057.
         SECTION 16.  Section 1467.101(c), Insurance Code, is amended
  to read as follows:
         (c)  A mediator shall report bad faith mediation to the
  commissioner or the Texas Medical Board or other regulatory agency,
  as appropriate, following the conclusion of the mediation.
         SECTION 17.  Section 1467.151, Insurance Code, is amended to
  read as follows:
         Sec. 1467.151.  CONSUMER PROTECTION; RULES.  (a)  The
  commissioner and the Texas Medical Board or other regulatory
  agency, as appropriate, shall adopt rules regulating the
  investigation and review of a complaint filed that relates to the
  settlement of an out-of-network health benefit claim that is
  subject to this chapter.  The rules adopted under this section must:
               (1)  distinguish among complaints for out-of-network
  coverage or payment and give priority to investigating allegations
  of delayed health care or medical care;
               (2)  develop a form for filing a complaint and
  establish an outreach effort to inform enrollees of the
  availability of the claims dispute resolution process under this
  chapter;
               (3)  ensure that a complaint is not dismissed without
  appropriate consideration;
               (4)  ensure that enrollees are informed of the
  availability of mandatory mediation; and
               (5)  require the administrator to include a notice of
  the claims dispute resolution process available under this chapter
  with the explanation of benefits sent to an enrollee.
         (b)  The department and the Texas Medical Board or other
  appropriate regulatory agency shall maintain information:
               (1)  on each complaint filed that concerns a claim or
  mediation subject to this chapter; and
               (2)  related to a claim that is the basis of an enrollee
  complaint, including:
                     (A)  the type of services that gave rise to the
  dispute;
                     (B)  the type and specialty, if any, of the
  facility-based provider or emergency care provider [physician] who
  provided the out-of-network service;
                     (C)  the county and metropolitan area in which the
  health care or medical service or supply was provided;
                     (D)  whether the health care or medical service or
  supply was for emergency care; and
                     (E)  any other information about:
                           (i)  the insurer or administrator that the
  commissioner by rule requires; or
                           (ii)  the facility-based provider or
  emergency care provider [physician] that the Texas Medical Board or
  other appropriate regulatory agency by rule requires.
         (c)  The information collected and maintained by the
  department and the Texas Medical Board and other appropriate
  regulatory agencies under Subsection (b)(2) is public information
  as defined by Section 552.002, Government Code, and may not include
  personally identifiable information or health care or medical
  information.
         (d)  A facility-based provider or emergency care provider
  [physician] who fails to provide a disclosure under Section
  1467.051 or 1467.0511 is not subject to discipline by the Texas
  Medical Board or other appropriate regulatory agency for that
  failure and a cause of action is not created by a failure to
  disclose as required by Section 1467.051 or 1467.0511.
         SECTION 18.  The changes in law made by this Act apply only
  to a claim for health care or medical services or supplies provided
  on or after January 1, 2018. A claim for health care or medical
  services or supplies provided before January 1, 2018, 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 19.  This Act takes effect September 1, 2017.
 
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