86R31987 SCL-D
 
  By: Hancock, et al. S.B. No. 1264
 
  (Oliverson, Martinez Fischer, Bonnen of Galveston, Zerwas,
 
  Lucio III) 
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to consumer protections against certain medical and health
  care billing by certain out-of-network providers.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
  ARTICLE 1. ELIMINATION OF SURPRISE BILLING FOR CERTAIN HEALTH
  BENEFIT PLANS
         SECTION 1.01.  Subtitle F, Title 8, Insurance Code, is
  amended by adding Chapter 1466 to read as follows:
  CHAPTER 1466. OUT-OF-NETWORK COVERAGES AND BALANCE BILLING
  PROHIBITIONS
  SUBCHAPTER A. GENERAL PROVISIONS
         Sec. 1466.0001.  APPLICABILITY OF DEFINITIONS. In this
  chapter, terms defined by Section 1467.001 have the meanings
  assigned by that section.
         Sec. 1466.0002.  APPLICABILITY OF CHAPTER. This chapter
  applies only to:
               (1)  a health benefit plan offered by a health
  maintenance organization operating under Chapter 843;
               (2)  a preferred provider benefit plan, including an
  exclusive provider benefit plan, offered by an insurer under
  Chapter 1301; and
               (3)  a health benefit plan, other than a health
  maintenance organization plan, under Chapter 1551, 1575, or 1579.
  SUBCHAPTER B. REQUIRED COVERAGES
         Sec. 1466.0051.  USUAL AND CUSTOMARY RATE FOR CERTAIN
  GOVERNMENTAL PLANS. For purposes of this subchapter, the usual and
  customary rate for a health benefit plan under Chapter 1551, 1575,
  or 1579 is the relevant allowable amount as described by the
  applicable master benefit plan document or policy.
         Sec. 1466.0052.  EMERGENCY CARE COVERAGE. A health benefit
  plan that provides coverage for emergency care performed for or a
  supply related to that care provided to an enrollee by an
  out-of-network provider must provide the coverage at the usual and
  customary rate or at an agreed rate.
         Sec. 1466.0053.  FACILITY-BASED PROVIDER COVERAGE;
  EXCEPTION. (a) Except as provided by Subsection (b), a health
  benefit plan that provides coverage for a health care or medical
  service performed for or a supply related to that service provided
  to an enrollee by an out-of-network provider who is a
  facility-based provider must provide the coverage at the usual and
  customary rate or at an agreed rate if the provider performed the
  service at a health care facility that is a participating provider.
         (b)  This section does not apply to a nonemergency health
  care or medical service:
               (1)  that an enrollee elects to receive in writing in
  advance of the service with respect to each out-of-network provider
  providing the service; and
               (2)  for which an out-of-network provider, before
  providing the service, provides a complete written disclosure to
  the enrollee that:
                     (A)  explains that the provider does not have a
  contract with the enrollee's health benefit plan;
                     (B)  discloses projected amounts for which the
  enrollee may be responsible; and
                     (C)  discloses the circumstances under which the
  enrollee would be responsible for those amounts.
         Sec. 1466.0054.  DIAGNOSTIC IMAGING PROVIDER OR LABORATORY
  SERVICE PROVIDER COVERAGE; EXCEPTION. (a) Except as provided by
  Subsection (b), a health benefit plan that provides coverage for a
  health care or medical service performed for or a supply related to
  that service provided to an enrollee by an out-of-network provider
  who is a diagnostic imaging provider or laboratory service provider
  must provide the coverage at the usual and customary rate or at an
  agreed rate if the provider performed the service in connection
  with a health care service performed by a participating provider.
         (b)  This section does not apply to a nonemergency health
  care or medical service:
               (1)  that an enrollee elects to receive in writing in
  advance of the service with respect to each out-of-network provider
  providing the service; and
               (2)  for which an out-of-network provider, before
  providing the service, provides a complete written disclosure to
  the enrollee that:
                     (A)  explains that the provider does not have a
  contract with the enrollee's health benefit plan;
                     (B)  discloses projected amounts for which the
  enrollee may be responsible; and
                     (C)  discloses the circumstances under which the
  enrollee would be responsible for those amounts.
         Sec. 1466.0055.  ACTION ON CLEAN CLAIMS FOR REQUIRED
  COVERAGES. (a) A health maintenance organization shall act on a
  clean claim as defined by Section 843.336 related to a health care
  or medical service or supply required to be covered under this
  subchapter in accordance with Section 843.338 as if the
  out-of-network provider is a participating physician or provider.
         (b)  An insurer shall act on a clean claim as defined by
  Section 1301.101 related to a health care or medical service or
  supply required to be covered under this subchapter in accordance
  with Section 1301.103 as if the out-of-network provider is a
  preferred provider.
         (c)  An administrator shall act on a clean claim as defined
  by Section 1301.101 related to a health care or medical service or
  supply required to be covered under this subchapter in accordance
  with Section 1301.103 as if:
               (1)  the out-of-network provider is a preferred
  provider; and
               (2)  the administrator is an insurer.
  SUBCHAPTER C. BALANCE BILLING PROHIBITIONS
         Sec. 1466.0101.  BALANCE BILLING PROHIBITION NOTICE. A
  health benefit plan issuer or administrator shall provide written
  notice in accordance with this section in an explanation of
  benefits provided to the enrollee and the out-of-network provider
  in connection with a health care service or supply that is subject
  to Subchapter B. The notice must include:
               (1)  a statement of the billing prohibition under
  Section 1466.0102;
               (2)  the total amount the provider may bill the
  enrollee under the enrollee's health benefit plan and an
  itemization of copayments, deductibles, coinsurance, or other
  amounts included in that total; and
               (3)  for an explanation of benefits provided to the
  provider, information required by commissioner rule advising the
  provider of the availability of mediation or arbitration, as
  applicable, under Chapter 1467.
         Sec. 1466.0102.  CERTAIN BALANCE BILLING PROHIBITED. For a
  health care service or supply required to be covered under
  Subchapter B, an out-of-network provider or a person asserting a
  claim as an agent or assignee of the provider may not bill an
  enrollee in, and the enrollee does not have financial
  responsibility for, an amount greater than an applicable copayment,
  coinsurance, or deductible under the enrollee's health benefit plan
  that:
               (1)  is based on:
                     (A)  the amount initially determined payable by
  the health benefit plan issuer or administrator; or
                     (B)  if applicable, a modified amount as
  determined under the issuer's or administrator's internal dispute
  resolution process; and
               (2)  is not based on any additional amount determined
  to be owed to the provider under Chapter 1467.
  SUBCHAPTER D. ENFORCEMENT
         Sec. 1466.0151.  INJUNCTION RELATED TO BALANCE BILLING
  VIOLATION. (a) If the attorney general receives a referral from
  the appropriate regulatory agency indicating that an individual or
  entity, including a health benefit plan issuer or administrator,
  has exhibited a pattern of intentionally violating Subchapter C,
  the attorney general may bring a civil action in the name of the
  state to enjoin the individual or entity from the violation.
         (b)  If the attorney general prevails in an action brought
  under Subsection (a), the attorney general may recover reasonable
  attorney's fees, costs, and expenses, including court costs and
  witness fees, incurred in bringing the action.
         Sec. 1466.0152.  ENFORCEMENT BY REGULATORY AGENCY. (a) An
  appropriate regulatory agency that licenses, certifies, or
  otherwise authorizes a physician, health care practitioner, health
  care facility, or other health care provider to practice or operate
  in this state shall take disciplinary action against the physician,
  practitioner, facility, or provider if the physician,
  practitioner, facility, or provider violates Section 1466.0102.
         (b)  A regulatory agency described by Subsection (a) may
  adopt rules as necessary to implement this section. Section
  2001.0045, Government Code, does not apply to rules adopted under
  this subsection.
  ARTICLE 2. OUT-OF-NETWORK CLAIM DISPUTE RESOLUTION
         SECTION 2.01.  Section 1467.001, Insurance Code, is amended
  by adding Subdivisions (1-a), (2-c), (2-d), (4-b), and (6-a) and
  amending Subdivisions (2-a), (2-b), (3), (5), and (7) to read as
  follows:
               (1-a)  "Arbitration" means a process in which an
  impartial arbiter issues a binding determination in a dispute
  between a health benefit plan issuer or administrator and an
  out-of-network provider or the provider's representative to settle
  a health benefit claim.
               (2-a)  "Diagnostic imaging provider" means a health
  care provider who performs a diagnostic imaging service on a
  patient for a fee or interprets imaging produced by a diagnostic
  imaging service.
               (2-b)  "Diagnostic imaging service" means magnetic
  resonance imaging, computed tomography, positron emission
  tomography, or any hybrid technology that combines any of those
  imaging modalities.
               (2-c)  "Emergency care" has the meaning assigned by
  Section 1301.155.
               (2-d) [(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 subject to this chapter [under Chapter 1551,
  1575, or 1579].
               (4-b)  "Laboratory service provider" means an
  accredited facility in which a specimen taken from a human body is
  interpreted and pathological diagnoses are made or a person who
  makes an interpretation of or diagnosis based on a specimen or
  information provided by a laboratory based on a specimen.
               (5)  "Mediation" means a process in which an impartial
  mediator facilitates and promotes agreement between the health
  [insurer offering a preferred provider] benefit plan issuer or the
  administrator and an out-of-network [a facility-based] provider
  [or emergency care provider] or the provider's representative to
  settle a health benefit claim of an enrollee.
               (6-a)  "Out-of-network provider" means a diagnostic
  imaging provider, emergency care provider, facility-based
  provider, or laboratory service provider that is not a
  participating provider for a health benefit plan.
               (7)  "Party" means a health benefit plan issuer [an
  insurer] offering a health [a preferred provider] benefit plan, an
  administrator, or an out-of-network [a facility-based provider or
  emergency care] provider or the provider's representative who
  participates in a mediation or arbitration conducted under this
  chapter. [The enrollee is also considered a party to the
  mediation.]
         SECTION 2.02.  Sections 1467.002, 1467.003, and 1467.005,
  Insurance Code, are amended to read as follows:
         Sec. 1467.002.  APPLICABILITY OF CHAPTER.  This chapter
  applies to:
               (1)  a health benefit plan offered by a health
  maintenance organization operating under Chapter 843;
               (2)  a preferred provider benefit plan, including an
  exclusive provider benefit plan, offered by an insurer under
  Chapter 1301; and
               (3) [(2)]  an administrator of a health benefit plan,
  other than a health maintenance organization plan, under Chapter
  1551, 1575, or 1579.
         Sec. 1467.003.  RULES.  (a)  The commissioner, the Texas
  Medical Board, and 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.
         (b)  Section 2001.0045, Government Code, does not apply to a
  rule adopted under this chapter.
         Sec. 1467.005.  REFORM. This chapter may not be construed to
  prohibit:
               (1)  a health [an insurer offering a preferred
  provider] benefit plan issuer or administrator from, at any time,
  offering a reformed claim settlement; or
               (2)  an out-of-network [a facility-based provider or
  emergency care] provider from, at any time, offering a reformed
  charge for health care or medical services or supplies.
         SECTION 2.03.  Subchapter A, Chapter 1467, Insurance Code,
  is amended by adding Section 1467.006 to read as follows:
         Sec. 1467.006.  BENCHMARKING DATABASE. (a)  The
  commissioner shall select an organization to maintain a
  benchmarking database that contains information necessary to
  calculate, with respect to a health care or medical service or
  supply, for each geographical area in this state:
               (1)  the 80th percentile of billed charges of all
  physicians or health care providers who are not facilities; and
               (2)  the 50th percentile of rates paid to participating
  providers who are not facilities.
         (b)  The commissioner may not select under Subsection (a) an
  organization that is financially affiliated with a health benefit
  plan issuer.
         SECTION 2.04.  The heading to Subchapter B, Chapter 1467,
  Insurance Code, is amended to read as follows:
  SUBCHAPTER B. MANDATORY MEDIATION FOR OUT-OF-NETWORK FACILITIES
         SECTION 2.05.  Subchapter B, Chapter 1467, Insurance Code,
  is amended by adding Sections 1467.050 and 1467.0505 to read as
  follows:
         Sec. 1467.050.  APPLICABILITY OF SUBCHAPTER. This
  subchapter applies only with respect to a health benefit claim
  submitted by an out-of-network provider that is a facility.
         Sec. 1467.0505.  ESTABLISHMENT AND ADMINISTRATION OF
  MEDIATION PROGRAM. (a)  The commissioner shall establish and
  administer a mediation program to resolve disputes over
  out-of-network provider charges in accordance with this
  subchapter.
         (b)  The commissioner:
               (1)  shall adopt rules, forms, and procedures necessary
  for the implementation and administration of the mediation program,
  including the establishment of a portal on the department's
  Internet website through which a request for mediation under
  Section 1467.051 may be submitted; and
               (2)  shall maintain a list of qualified mediators for
  the program.
         SECTION 2.06.  The heading to Section 1467.051, Insurance
  Code, is amended to read as follows:
         Sec. 1467.051.  AVAILABILITY OF MANDATORY MEDIATION[;
  EXCEPTION].
         SECTION 2.07.  Sections 1467.051(a) and (b), Insurance Code,
  are amended to read as follows:
         (a)  An out-of-network provider, health benefit plan issuer,
  or administrator [An enrollee] may request mediation of a
  settlement of an out-of-network health benefit claim through a
  portal on the department's Internet website if:
               (1)  there is an [the] amount billed by the provider and
  unpaid by the issuer or administrator [for which the enrollee is
  responsible to a facility-based provider or emergency care
  provider,] after copayments, deductibles, and coinsurance for
  which an enrollee may not be billed [, 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)  an out-of-network laboratory service; or
                     (C)  an out-of-network diagnostic imaging service 
  [a health care or medical service or supply provided by a
  facility-based provider in a facility that is a preferred provider
  or that has a contract with the administrator].
         (b)  If a person [Except as provided by Subsections (c) and
  (d), if an enrollee] requests  mediation under this subchapter, the
  out-of-network [facility-based] provider [or emergency care
  provider,] or the provider's representative, and the health benefit
  plan issuer [insurer] or the administrator, as appropriate, shall
  participate in the mediation.
         SECTION 2.08.  Section 1467.052, Insurance Code, is amended
  by amending Subsections (a) and (c) and adding Subsection (d) to
  read as follows:
         (a)  Except as provided by Subsection (b), to qualify for an
  appointment as a mediator under this subchapter [chapter] 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 commissioner [chief
  administrative law judge].
         (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 a health [an insurer
  offering the preferred provider] benefit plan issuer or
  administrator or a facility [physician, health care practitioner,
  or other health care provider] during the three years immediately
  preceding the request for mediation.
         (d)  The commissioner shall immediately terminate the
  approval of a mediator who no longer meets the requirements under
  this subchapter and rules adopted under this subchapter to serve as
  a mediator.
         SECTION 2.09.  Section 1467.053, Insurance Code, is amended
  by adding Subsection (b-1) and amending Subsection (d) to read as
  follows:
         (b-1)  If the parties do not select a mediator by mutual
  agreement on or before the 30th day after the date the mediation is
  requested, the party requesting the mediation shall notify the
  commissioner, and the commissioner shall select a mediator from the
  commissioner's list of approved mediators.
         (d)  The mediator's fees shall be split evenly and paid by
  the health benefit plan issuer [insurer] or administrator and the
  out-of-network [facility-based provider or emergency care]
  provider.
         SECTION 2.10.  Section 1467.054, Insurance Code, is amended
  by amending Subsections (a) and (d) and adding Subsection (b-1) to
  read as follows:
         (a)  An out-of-network provider, health benefit plan issuer,
  or administrator [enrollee] may request mandatory mediation under
  this subchapter [chapter].
         (b-1)  The person who requests the mediation shall provide
  written notice on the date the mediation is requested in the form
  and manner provided by commissioner rule to:
               (1)  the department; and
               (2)  each other party.
         (d)  In an effort to settle the claim before mediation, all
  parties must participate in an informal settlement teleconference
  not later than the 30th day after the date on which a person [the
  enrollee] submits a request for mediation under this subchapter
  [section].
         SECTION 2.11.  Sections 1467.055(g) and (i), Insurance Code,
  are amended to read as follows:
         (g)  A [Except at the request of an enrollee, a] mediation
  shall be held not later than the 180th day after the date of the
  request for mediation.
         (i)  A health care or medical service or supply provided by
  an out-of-network [a facility-based] provider [or emergency care
  provider] may not be summarily disallowed. This subsection does not
  require a health benefit plan issuer [an insurer] or administrator
  to pay for an uncovered service or supply.
         SECTION 2.12.  Sections 1467.056(a), (b), and (d), Insurance
  Code, are amended to read as follows:
         (a)  In a mediation under this subchapter [chapter], the
  parties shall[:
               [(1)] evaluate whether:
               (1) [(A)]  the amount charged by the out-of-network
  [facility-based] provider [or emergency care provider] for the
  health care or medical service or supply is excessive; and
               (2) [(B)]  the amount paid by the health benefit plan
  issuer [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].
         (b)  The out-of-network [facility-based] provider [or
  emergency care provider] may present information regarding the
  amount charged for the health care or medical service or supply. The
  health benefit plan issuer [insurer] or administrator may present
  information regarding the amount paid by the issuer [insurer] or
  administrator.
         (d)  The goal of the mediation is to reach an agreement
  between [among the enrollee,] the out-of-network [facility-based]
  provider [or emergency care provider,] and the health benefit plan
  issuer [insurer] or administrator, as applicable, as to the amount
  paid by the issuer [insurer] or administrator to the out-of-network
  [facility-based] provider and [or emergency care provider,] the
  amount charged by the out-of-network [facility-based] provider [or
  emergency care provider, and the amount paid to the facility-based
  provider or emergency care provider by the enrollee].
         SECTION 2.13.  Subchapter B, Chapter 1467, Insurance Code,
  is amended by adding Section 1467.0575 to read as follows:
         Sec. 1467.0575.  RIGHT TO RECEIVE PAYMENT; RIGHT TO FILE
  ACTION. (a) An out-of-network provider has a right to a reasonable
  payment from an enrollee's health benefit plan for covered services
  and supplies provided to the enrollee that are subject to this
  subchapter and for which the provider has not been fully
  reimbursed.
         (b)  Not later than the 45th day after the date that the
  mediator's report is provided to the department under Section
  1467.060, either party to a mediation for which there was no
  agreement may file a civil action to determine the amount due to an
  out-of-network provider. A party may not bring a civil action
  before the conclusion of the mediation process under this
  subchapter.
         SECTION 2.14.  Section 1467.060, Insurance Code, is amended
  to read as follows:
         Sec. 1467.060.  REPORT OF MEDIATOR. Not later than the 45th
  day after the date the mediation concludes, the [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 2.15.  Chapter 1467, Insurance Code, is amended by
  adding Subchapter B-1 to read as follows:
  SUBCHAPTER B-1. MANDATORY BINDING ARBITRATION FOR OTHER PROVIDERS
         Sec. 1467.081.  APPLICABILITY OF SUBCHAPTER. This
  subchapter applies only with respect to a health benefit claim
  submitted by an out-of-network provider who is not a facility.
         Sec. 1467.082.  ESTABLISHMENT AND ADMINISTRATION OF
  ARBITRATION PROGRAM. (a)  The commissioner shall establish and
  administer an arbitration program to resolve disputes over
  out-of-network provider charges in accordance with this
  subchapter.
         (b)  The commissioner:
               (1)  shall adopt rules, forms, and procedures necessary
  for the implementation and administration of the arbitration
  program, including the establishment of a portal on the
  department's Internet website through which a request for
  arbitration under Section 1467.084 may be submitted; and
               (2)  shall maintain a list of qualified arbitrators for
  the program.
         Sec. 1467.083.  ISSUE TO BE ADDRESSED; BASIS FOR
  DETERMINATION. (a)  The only issue that an arbitrator may
  determine under this subchapter is the reasonable amount for the
  health care or medical services or supplies provided to the
  enrollee by an out-of-network provider.
         (b)  The determination must take into account:
               (1)  whether there is a gross disparity between the fee
  billed by the out-of-network provider and:
                     (A)  fees paid to the out-of-network provider for
  the same services or supplies rendered by the provider to other
  enrollees for which the provider is an out-of-network provider; and
                     (B)  fees paid by the health benefit plan issuer
  to reimburse similarly qualified out-of-network providers for the
  same services or supplies in the same region;
               (2)  the level of training, education, and experience
  of the out-of-network provider;
               (3)  the out-of-network provider's usual billed charge
  for comparable services or supplies with regard to other enrollees
  for which the provider is an out-of-network provider;
               (4)  the circumstances and complexity of the enrollee's
  particular case, including the time and place of the provision of
  the service or supply;
               (5)  individual enrollee characteristics;
               (6)  the 80th percentile of all billed charges for the
  service or supply performed by a health care provider in the same or
  similar specialty and provided in the same geographical area as
  reported in a benchmarking database described by Section 1467.006;
               (7)  the 50th percentile of rates for the service or
  supply paid to participating providers in the same or similar
  specialty and provided in the same geographical area as reported in
  a benchmarking database described by Section 1467.006;
               (8)  historical rates paid to participating providers;
  and
               (9)  historical data for the percentiles described by
  Subdivisions (6) and (7).
         Sec. 1467.084.  AVAILABILITY OF MANDATORY ARBITRATION. (a)
  Not later than the 90th day after the date an out-of-network
  provider receives the initial payment for a health care or medical
  service or supply, the out-of-network provider or the health
  benefit plan issuer or administrator may request arbitration of a
  settlement of an out-of-network health benefit claim through a
  portal on the department's Internet website if:
               (1)  there is a charge billed by the provider and unpaid
  by the issuer or administrator after copayments, deductibles, and
  coinsurance for which an enrollee may not be billed; and
               (2)  the health benefit claim is for:
                     (A)  emergency care;
                     (B)  a health care or medical service or supply
  provided by a facility-based provider in a facility that is a
  participating provider;
                     (C)  an out-of-network laboratory service; or
                     (D)  an out-of-network diagnostic imaging
  service.
         (b)  If a person requests arbitration under this subchapter,
  the out-of-network provider or the provider's representative, and
  the health benefit plan issuer or the administrator, as
  appropriate, shall participate in the arbitration.
         (c)  The person who requests the arbitration shall provide
  written notice on the date the arbitration is requested in the form
  and manner prescribed by commissioner rule to:
               (1)  the department; and
               (2)  each other party.
         (d)  In an effort to settle the claim before arbitration, all
  parties must participate in an informal settlement teleconference
  not later than the 30th day after the date on which the arbitration
  is requested.  A health benefit plan issuer or administrator, as
  applicable, shall make a reasonable effort to arrange the
  teleconference.
         (e)  The commissioner shall adopt rules providing
  requirements for submitting arbitration in one proceeding.  The
  rules must provide that:
               (1)  a claim for a billed charge of $1,500 or more may
  not be combined with another claim;
               (2)  the total amount in controversy for multiple
  claims in one arbitration may not exceed $5,000; and
               (3)  the multiple claims in one arbitration must be
  limited to the same out-of-network provider.
         Sec. 1467.085.  EFFECT OF ARBITRATION AND APPLICABILITY OF
  OTHER LAW. (a) Notwithstanding Section 1467.004, an
  out-of-network provider, health benefit plan issuer, or
  administrator may not file suit for an out-of-network claim subject
  to this chapter until the conclusion of the arbitration on the issue
  of the amount to be paid in the out-of-network claim dispute.
         (b)  An arbitration conducted under this subchapter is not
  subject to Title 7, Civil Practice and Remedies Code.
         Sec. 1467.086.  SELECTION AND APPROVAL OF ARBITRATOR.
  (a)  If the parties do not select an arbitrator by mutual agreement
  on or before the 30th day after the date the arbitration is
  requested, the party requesting the arbitration shall notify the
  commissioner, and the commissioner shall select an arbitrator from
  the commissioner's list of approved arbitrators.
         (b)  In selecting an arbitrator under this section, the
  commissioner shall give preference to an arbitrator who is
  knowledgeable and experienced in applicable principles of contract
  and insurance law and the health care industry generally.
         (c)  In approving an individual as an arbitrator, the
  commissioner shall ensure that the individual does not have a
  conflict of interest that would adversely impact the individual's
  independence and impartiality in rendering a decision in an
  arbitration. A conflict of interest includes current or recent
  ownership or employment of the individual or a close family member
  in a health benefit plan issuer or out-of-network provider that may
  be involved in the arbitration.
         (d)  The commissioner shall immediately terminate the
  approval of an arbitrator who no longer meets the requirements
  under this subchapter and rules adopted under this subchapter to
  serve as an arbitrator.
         Sec. 1467.087.  PROCEDURES. (a)  The arbitrator shall set a
  date for submission of all information to be considered by the
  arbitrator.
         (b)  A party may not engage in discovery in connection with
  the arbitration.
         (c)  On agreement of all parties, any deadline under this
  subchapter may be extended.
         (d)  Unless otherwise agreed to by the parties, an arbitrator
  may not determine whether a health benefit plan covers a particular
  health care or medical service or supply.
         (e)  The parties shall evenly split and pay the arbitrator's
  fees and expenses.
         Sec. 1467.088.  DECISION. (a)  Not later than the 75th day
  after the date the arbitration is requested, an arbitrator shall
  provide the parties with a written decision in which the
  arbitrator:
               (1)  determines whether the billed charge or the
  initial payment made by the health benefit plan issuer or
  administrator is the closest to the reasonable amount for the
  services or supplies determined in accordance with Section
  1467.083(b), provided that if the out-of-network provider elects to
  participate in the issuer's or administrator's internal appeal
  process before arbitration:
                     (A)  the provider may revise the billed charge to
  correct a billing error before the completion of the appeal
  process; and
                     (B)  the health benefit plan issuer or
  administrator may increase the initial payment under the appeal
  process; and
               (2)  selects the billed charge or initial payment
  described by Subdivision (1) as the binding award amount.
         (b)  An arbitrator may not modify the binding award amount
  selected under Subsection (a).
         (c)  An arbitrator shall provide written notice in the form
  and manner prescribed by commissioner rule of the reasonable amount
  for the services or supplies and the binding award amount. If the
  parties settle before a decision, the parties shall provide written
  notice in the form and manner prescribed by commissioner rule of the
  amount of the settlement. The department shall maintain a record of
  notices provided under this subsection.
         Sec. 1467.089.  EFFECT OF DECISION. (a)  An arbitrator's
  decision under Section 1467.088 is binding.
         (b)  Not later than the 45th day after the date of an
  arbitrator's decision under Section 1467.088, a party not satisfied
  with the decision may file an action to determine the payment due to
  an out-of-network provider.
         (c)  In an action filed under Subsection (b), the court shall
  determine whether the arbitrator's decision is proper based on a
  substantial evidence standard of review.
         (d)  Not later than the 10th day after the date of an
  arbitrator's decision under Section 1467.088 or a court's
  determination in an action filed under Subsection (b), a health
  benefit plan issuer or administrator shall pay to an out-of-network
  provider any additional amount necessary to satisfy the binding
  award or the court's determination, as applicable.
         SECTION 2.16.  Subchapter C, Chapter 1467, Insurance Code,
  is amended to read as follows:
  SUBCHAPTER C.  BAD FAITH PARTICIPATION [MEDIATION]
         Sec. 1467.101.  BAD FAITH. (a)  The following conduct
  constitutes bad faith participation [mediation] for purposes of
  this chapter:
               (1)  failing to participate in the informal settlement
  teleconference under Section 1467.084(d) or an arbitration or
  mediation under this chapter;
               (2)  failing to provide information the arbitrator or
  mediator believes is necessary to facilitate a decision or [an]
  agreement; or
               (3)  failing to designate a representative
  participating in the arbitration or mediation with full authority
  to enter into any [mediated] agreement.
         (b)  Failure to reach an agreement under Subchapter B is not
  conclusive proof of bad faith participation [mediation].
         Sec. 1467.102.  PENALTIES. (a)  Bad faith participation or
  otherwise failing to comply with Subchapter B-1 [mediation, by a
  party other than the enrollee,] is grounds for imposition of an
  administrative penalty by the regulatory agency that issued a
  license or certificate of authority to the party who committed the
  violation.
         (b)  Except for good cause shown, on a report of a mediator
  and appropriate proof of bad faith participation under Subchapter B
  [mediation], the regulatory agency that issued the license or
  certificate of authority shall impose an administrative penalty.
         SECTION 2.17.  Sections 1467.151(a), (b), and (c), Insurance
  Code, are amended to read as follows:
         (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]; and
               (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,
  arbitration, or mediation subject to this chapter[; and
               [(2)     related to a claim that is the basis of an
  enrollee complaint], including:
               (1) [(A)]  the type of services or supplies that gave
  rise to the dispute;
               (2) [(B)]  the type and specialty, if any, of the
  out-of-network [facility-based] provider [or emergency care
  provider] who provided the out-of-network service or supply;
               (3) [(C)]  the county and metropolitan area in which
  the health care or medical service or supply was provided;
               (4) [(D)]  whether the health care or medical service
  or supply was for emergency care; and
               (5) [(E)]  any other information about:
                     (A) [(i)]  the health benefit plan issuer
  [insurer] or administrator that the commissioner by rule requires;
  or
                     (B) [(ii)]  the out-of-network [facility-based]
  provider [or emergency care provider] 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) [(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.
  ARTICLE 3. CONFORMING AMENDMENTS
         SECTION 3.01.  Section 1456.001(6), Insurance Code, is
  amended to read as follows:
               (6)  "Provider network" means a health benefit plan
  under which health care services are provided to enrollees through
  contracts with health care providers and that requires those
  enrollees to use health care providers participating in the plan
  and procedures covered by the plan. [The term includes a network
  operated by:
                     [(A)  a health maintenance organization;
                     [(B)  a preferred provider benefit plan issuer; or
                     [(C)     another entity that issues a health benefit
  plan, including an insurance company.]
         SECTION 3.02.  Sections 1456.002(a) and (c), Insurance Code,
  are amended to read as follows:
         (a)  This chapter applies to any health benefit plan that:
               (1)  provides benefits for medical or surgical expenses
  incurred as a result of a health condition, accident, or sickness,
  including an individual, group, blanket, or franchise insurance
  policy or insurance agreement, a group hospital service contract,
  or an individual or group evidence of coverage that is offered by:
                     (A)  an insurance company;
                     (B)  a group hospital service corporation
  operating under Chapter 842;
                     (C)  a fraternal benefit society operating under
  Chapter 885;
                     (D)  a stipulated premium company operating under
  Chapter 884;
                     (E)  [a health maintenance organization operating
  under Chapter 843;
                     [(F)]  a multiple employer welfare arrangement
  that holds a certificate of authority under Chapter 846;
                     (F) [(G)]  an approved nonprofit health
  corporation that holds a certificate of authority under Chapter
  844; or
                     (G) [(H)]  an entity not authorized under this
  code or another insurance law of this state that contracts directly
  for health care services on a risk-sharing basis, including a
  capitation basis; or
               (2)  provides health and accident coverage through a
  risk pool created under Chapter 172, Local Government Code,
  notwithstanding Section 172.014, Local Government Code, or any
  other law.
         (c)  This chapter does not apply to:
               (1)  Medicaid managed care programs operated under
  Chapter 533, Government Code;
               (2)  Medicaid programs operated under Chapter 32, Human
  Resources Code; [or]
               (3)  the state child health plan operated under Chapter
  62 or 63, Health and Safety Code; or
               (4)  a health benefit plan subject to Section
  1466.0053.
         SECTION 3.03.  The following provisions of the Insurance
  Code are repealed:
               (1)  Section 1456.004(c);
               (2)  Section 1467.001(2);
               (3)  Sections 1467.051(c) and (d);
               (4)  Section 1467.0511;
               (5)  Sections 1467.053(b) and (c);
               (6)  Sections 1467.054(b), (c), (f), and (g);
               (7)  Sections 1467.055(d) and (h);
               (8)  Section 1467.057;
               (9)  Section 1467.058;
               (10)  Section 1467.059; and
               (11)  Section 1467.151(d).
  ARTICLE 4. STUDY
         SECTION 4.01.  Subchapter A, Chapter 38, Insurance Code, is
  amended by adding Section 38.004 to read as follows:
         Sec. 38.004.  BALANCE BILLING PROHIBITION REPORT. (a)  The
  department shall, each biennium, conduct a study on the impacts of
  S.B. No. 1264, Acts of the 86th Legislature, Regular Session, 2019,
  on Texas consumers and health coverage in this state, including:
               (1)  trends in billed amounts for health care or
  medical services or supplies, especially emergency services,
  laboratory services, diagnostic imaging services, and
  facility-based services;
               (2)  comparison of the total amount spent on
  out-of-network emergency services, laboratory services, diagnostic
  imaging services, and facility-based services by calendar year and
  provider type or physician specialty;
               (3)  trends and changes in network participation by
  providers of emergency services, laboratory services, diagnostic
  imaging services, and facility-based services by provider type or
  physician specialty, including whether any terminations were
  initiated by a health benefit plan issuer, administrator, or
  provider;
               (4)  trends and changes in the amounts paid to
  participating providers;
               (5)  the number of complaints, completed
  investigations, and disciplinary sanctions for billing by
  providers of emergency services, laboratory services, diagnostic
  imaging services, or facility-based services of enrollees for
  amounts greater than the enrollee's responsibility under an
  applicable health benefit plan, including an applicable copayment,
  coinsurance, or deductible;
               (6)  trends in amounts paid to out-of-network
  providers;
               (7)  trends in the usual and customary rate for health
  care or medical services or supplies, especially emergency
  services, laboratory services, diagnostic imaging services, and
  facility-based services; and
               (8)  the effectiveness of the claim dispute resolution
  process under Chapter 1467.
         (b)  In conducting the study described by Subsection (a), the
  department shall collect settlement data and verdicts or
  arbitration awards, as applicable, from parties to mediation or
  arbitration under Chapter 1467.
         (c)  The department:
               (1)  shall collect data quarterly from a health benefit
  plan issuer or administrator subject to Chapter 1467 to conduct the
  study required by this section; and
               (2)  may utilize any reliable external resource or
  entity to acquire information reasonably necessary to prepare the
  report required by Subsection (d).
         (d)  Not later than December 1 of each even-numbered year,
  the department shall prepare and submit a written report on the
  results of the study under this section, including the department's
  findings, to the legislature.
  ARTICLE 5. TRANSITION AND EFFECTIVE DATE
         SECTION 5.01.  The changes in law made by this Act apply only
  to a health care or medical service or supply provided on or after
  January 1, 2020. A health care or medical service or supply
  provided before January 1, 2020, 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 5.02.  The Texas Department of Insurance, the
  Employees Retirement System of Texas, the Teacher Retirement System
  of Texas, and any other state agency subject to this Act are
  required to implement a provision of this Act only if the
  legislature appropriates money specifically for that purpose.  If
  the legislature does not appropriate money specifically for that
  purpose, those agencies may, but are not required to, implement a
  provision of this Act using other appropriations available for that
  purpose.
         SECTION 5.03.  This Act takes effect September 1, 2019.