H.B. No. 3459
 
 
 
 
AN ACT
  relating to preauthorization requirements for certain health care
  services and utilization review for certain health benefit plans.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Subchapter E, Chapter 1551, Insurance Code, is
  amended by adding Section 1551.2181 to read as follows:
         Sec. 1551.2181.  EXEMPTION FROM PREAUTHORIZATION
  REQUIREMENTS FOR PHYSICIANS AND HEALTH CARE PROVIDERS PROVIDING
  CERTAIN HEALTH CARE SERVICES. A preauthorization process used by a
  health benefit plan provided under this chapter is subject to the
  same limitations and requirements provided by Subchapter N, Chapter
  4201, for a preauthorization process used by an insurer.
         SECTION 2.  Subchapter D, Chapter 1575, Insurance Code, is
  amended by adding Section 1575.1701 to read as follows:
         Sec. 1575.1701.  EXEMPTION FROM PREAUTHORIZATION
  REQUIREMENTS FOR PHYSICIANS AND HEALTH CARE PROVIDERS PROVIDING
  CERTAIN HEALTH CARE SERVICES. A preauthorization process used by a
  health benefit plan provided under this chapter is subject to the
  same limitations and requirements provided by Subchapter N, Chapter
  4201, for a preauthorization process used by an insurer.
         SECTION 3.  Subchapter C, Chapter 1579, Insurance Code, is
  amended by adding Section 1579.1061 to read as follows:
         Sec. 1579.1061.  EXEMPTION FROM PREAUTHORIZATION
  REQUIREMENTS FOR PHYSICIANS AND HEALTH CARE PROVIDERS PROVIDING
  CERTAIN HEALTH CARE SERVICES. A preauthorization process used by a
  health coverage plan provided under this chapter is subject to the
  same limitations and requirements provided by Subchapter N, Chapter
  4201, for a preauthorization process used by an insurer.
         SECTION 4.  Section 4201.206, Insurance Code, is amended to
  read as follows:
         Sec. 4201.206.  OPPORTUNITY TO DISCUSS TREATMENT BEFORE
  ADVERSE DETERMINATION. (a) Subject to Subsection (b) and the
  notice requirements of Subchapter G, before an adverse
  determination is issued by a utilization review agent who questions
  the medical necessity, the appropriateness, or the experimental or
  investigational nature of a health care service, the agent shall
  provide the health care provider who ordered, requested, provided,
  or is to provide the service a reasonable opportunity to discuss
  with a physician licensed to practice medicine in this state the
  patient's treatment plan and the clinical basis for the agent's
  determination.
         (b)  If the health care service described by Subsection (a)
  was ordered, requested, or provided, or is to be provided by a
  physician, the opportunity described by that subsection must be
  with a physician licensed to practice medicine in this state and who
  has the same or similar specialty as the physician.
         SECTION 5.  Chapter 4201, Insurance Code, is amended by
  adding Subchapter N to read as follows:
  SUBCHAPTER N. EXEMPTION FROM PREAUTHORIZATION REQUIREMENTS FOR
  PHYSICIANS AND PROVIDERS PROVIDING CERTAIN HEALTH CARE SERVICES
         Sec. 4201.651.  DEFINITIONS. (a) In this subchapter,
  "preauthorization" means a determination by a health maintenance
  organization, insurer, or person contracting with a health
  maintenance organization or insurer that health care services
  proposed to be provided to a patient are medically necessary and
  appropriate.
         (b)  In this subchapter, terms defined by Section 843.002,
  including "health care services," "physician," and "provider,"
  have the meanings assigned by that section.
         Sec. 4201.652.  APPLICABILITY OF SUBCHAPTER. This
  subchapter applies only to:
               (1)  a health benefit plan offered by a health
  maintenance organization operating under Chapter 843, except that
  this subchapter does not apply to:
                     (A)  the child health plan program under Chapter
  62, Health and Safety Code, or the health benefits plan for children
  under Chapter 63, Health and Safety Code; or
                     (B)  the state Medicaid program, including the
  Medicaid managed care program operated under Chapter 533,
  Government Code;
               (2)  a preferred provider benefit plan or exclusive
  provider benefit plan offered by an insurer under Chapter 1301; and
               (3)  a person who contracts with a health maintenance
  organization or insurer to issue preauthorization determinations
  or perform the functions described in this subchapter for a health
  benefit plan to which this subchapter applies.
         Sec. 4201.653.  EXEMPTION FROM PREAUTHORIZATION
  REQUIREMENTS FOR PHYSICIANS AND PROVIDERS PROVIDING CERTAIN HEALTH
  CARE SERVICES. (a) A health maintenance organization or an insurer
  that uses a preauthorization process for health care services may
  not require a physician or provider to obtain preauthorization for
  a particular health care service if, in the most recent six-month
  evaluation period, as described by Subsection (b), the health
  maintenance organization or insurer has approved or would have
  approved not less than 90 percent of the preauthorization requests
  submitted by the physician or provider for the particular health
  care service.
         (b)  Except as provided by Subsection (c), a health
  maintenance organization or insurer shall evaluate whether a
  physician or provider qualifies for an exemption from
  preauthorization requirements under Subsection (a) once every six
  months.
         (c)  A health maintenance organization or insurer may
  continue an exemption under Subsection (a) without evaluating
  whether the physician or provider qualifies for the exemption under
  Subsection (a) for a particular evaluation period.
         (d)  A physician or provider is not required to request an
  exemption under Subsection (a) to qualify for the exemption.
         Sec. 4201.654.  DURATION OF PREAUTHORIZATION EXEMPTION. (a)
  A physician's or provider's exemption from preauthorization
  requirements under Section 4201.653 remains in effect until:
               (1)  the 30th day after the date the health maintenance
  organization or insurer notifies the physician or provider of the
  health maintenance organization's or insurer's determination to
  rescind the exemption under Section 4201.655, if the physician or
  provider does not appeal the health maintenance organization's or
  insurer's determination; or
               (2)  if the physician or provider appeals the
  determination, the fifth day after the date the independent review
  organization affirms the health maintenance organization's or
  insurer's determination to rescind the exemption.
         (b)  If a health maintenance organization or insurer does not
  finalize a rescission determination as specified in Subsection (a),
  then the physician or provider is considered to have met the
  criteria under Section 4201.653 to continue to qualify for the
  exemption.
         Sec. 4201.655.  DENIAL OR RESCISSION OF PREAUTHORIZATION
  EXEMPTION. (a) A health maintenance organization or insurer may
  rescind an exemption from preauthorization requirements under
  Section 4201.653 only:
               (1)  during January or June of each year;
               (2)  if the health maintenance organization or insurer
  makes a determination, on the basis of a retrospective review of a
  random sample of not fewer than five and no more than 20 claims
  submitted by the physician or provider during the most recent
  evaluation period described by Section 4201.653(b), that less than
  90 percent of the claims for the particular health care service met
  the medical necessity criteria that would have been used by the
  health maintenance organization or insurer when conducting
  preauthorization review for the particular health care service
  during the relevant evaluation period; and
               (3)  if the health maintenance organization or insurer
  complies with other applicable requirements specified in this
  section, including:
                     (A)  notifying the physician or provider not less
  than 25 days before the proposed rescission is to take effect; and
                     (B)  providing with the notice under Paragraph
  (A):
                           (i)  the sample information used to make the
  determination under Subdivision (2); and
                           (ii)  a plain language explanation of how
  the physician or provider may appeal and seek an independent review
  of the determination.
         (b)  A determination made under Subsection (a)(2) must be
  made by an individual licensed to practice medicine in this state.
  For a determination made under Subsection (a)(2) with respect to a
  physician, the determination must be made by an individual licensed
  to practice medicine in this state who has the same or similar
  specialty as that physician.
         (c)  A health maintenance organization or insurer may deny an
  exemption from preauthorization requirements under Section
  4201.653 only if:
               (1)  the physician or provider does not have the
  exemption at the time of the relevant evaluation period; and
               (2)  the health maintenance organization or insurer
  provides the physician or provider with actual statistics and data
  for the relevant preauthorization request evaluation period and
  detailed information sufficient to demonstrate that the physician
  or provider does not meet the criteria for an exemption from
  preauthorization requirements for the particular health care
  service under Section 4201.653.
         Sec. 4201.656.  INDEPENDENT REVIEW OF EXEMPTION
  DETERMINATION. (a) A physician or provider has a right to a review
  of an adverse determination regarding a preauthorization exemption
  be conducted by an independent review organization. A health
  maintenance organization or insurer may not require a physician or
  provider to engage in an internal appeal process before requesting
  a review by an independent review organization under this section.
         (b)  A health maintenance organization or insurer shall pay:
               (1)  for any appeal or independent review of an adverse
  determination regarding a preauthorization exemption requested
  under this section; and
               (2)  a reasonable fee determined by the Texas Medical
  Board for any copies of medical records or other documents
  requested from a physician or provider during an exemption
  rescission review requested under this section.
         (c)  An independent review organization must complete an
  expedited review of an adverse determination regarding a
  preauthorization exemption not later than the 30th day after the
  date a physician or provider files the request for a review under
  this section.
         (d)  A physician or provider may request that the independent
  review organization consider another random sample of not less than
  five and no more than 20 claims submitted to the health maintenance
  organization or insurer by the physician or provider during the
  relevant evaluation period for the relevant health care service as
  part of its review. If the physician or provider makes a request
  under this subsection, the independent review organization shall
  base its determination on the medical necessity of claims reviewed
  by the health maintenance organization or insurer under Section
  4201.655 and reviewed under this subsection.
         Sec. 4201.657.  EFFECT OF APPEAL OR INDEPENDENT REVIEW
  DETERMINATION. (a) A health maintenance organization or insurer
  is bound by an appeal or independent review determination that does
  not affirm the determination made by the health maintenance
  organization or insurer to rescind a preauthorization exemption.
         (b)  A health maintenance organization or insurer may not
  retroactively deny a health care service on the basis of a
  rescission of an exemption, even if the health maintenance
  organization's or insurer's determination to rescind the
  preauthorization exemption is affirmed by an independent review
  organization.
         (c)  If a determination of a preauthorization exemption made
  by the health maintenance organization or insurer is overturned on
  review by an independent review organization, the health
  maintenance organization or insurer:
               (1)  may not attempt to rescind the exemption before
  the end of the next evaluation period that occurs; and
               (2)  may only rescind the exemption after if the health
  maintenance organization or insurer complies with Sections
  4201.655 and 4201.656.
         Sec. 4201.658.  ELIGIBILITY FOR PREAUTHORIZATION EXEMPTION
  FOLLOWING FINALIZED EXEMPTION RESCISSION OR DENIAL. After a final
  determination or review affirming the rescission or denial of an
  exemption for a specific health care service under Section
  4201.653, a physician or provider is eligible for consideration of
  an exemption for the same health care service after the six-month
  evaluation period that follows the evaluation period which formed
  the basis of the rescission or denial of an exemption.
         Sec. 4201.659.  EFFECT OF PREAUTHORIZATION EXEMPTION. (a)
  A health maintenance organization or insurer may not deny or reduce
  payment to a physician or provider for a health care service for
  which the physician or provider has qualified for an exemption from
  preauthorization requirements under Section 4201.653 based on
  medical necessity or appropriateness of care unless the physician
  or provider:
               (1)  knowingly and materially misrepresented the
  health care service in a request for payment submitted to the health
  maintenance organization or insurer with the specific intent to
  deceive and obtain an unlawful payment from the health maintenance
  organization or insurer; or
               (2)  failed to substantially perform the health care
  service.
         (b)  A health maintenance organization or an insurer may not
  conduct a retrospective review of a health care service subject to
  an exemption except:
               (1)  to determine if the physician or provider still
  qualifies for an exemption under this subchapter; or
               (2)  if the health maintenance organization or insurer
  has a reasonable cause to suspect a basis for denial exists under
  Subsection (a).
         (c)  For a retrospective review described by Subsection
  (b)(2), nothing in this subchapter may be construed to modify or
  otherwise affect:
               (1)  the requirements under or application of Section
  4201.305, including any timeframes specified by that section; or
               (2)  any other applicable law, except to prescribe the
  only circumstances under which:
                     (A)  a retrospective utilization review may occur
  as specified by Subsection (b)(2); or
                     (B)  payment may be denied or reduced as specified
  by Subsection (a).
         (d)  Not later than five days after qualifying for an
  exemption from preauthorization requirements under Section
  4201.653, a health maintenance organization or insurer must provide
  to a physician or provider a notice that includes:
               (1)  a statement that the physician or provider
  qualifies for an exemption from preauthorization requirements
  under Section 4201.653;
               (2)  a list of the health care services and health
  benefit plans to which the exemption applies; and
               (3)  a statement of the duration of the exemption.
         (e)  If a physician or provider submits a preauthorization
  request for a health care service for which the physician or
  provider qualifies for an exemption from preauthorization
  requirements under Section 4201.653, the health maintenance
  organization or insurer must promptly provide a notice to the
  physician or provider that includes:
               (1)  the information described by Subsection (d); and
               (2)  a notification of the health maintenance
  organization's or insurer's payment requirements.
         (f)  Nothing in this subchapter may be construed to:
               (1)  authorize a physician or provider to provide a
  health care service outside the scope of the provider's applicable
  license issued under Title 3, Occupations Code; or
               (2)  require a health maintenance organization or
  insurer to pay for a health care service described by Subdivision
  (1) that is performed in violation of the laws of this state.
         SECTION 6.  Subchapter N, Chapter 4201, Insurance Code, as
  added by this Act, applies only to a request for preauthorization of
  health care services made on or after January 1, 2022. A request for
  preauthorization of health care services made before January 1,
  2022, is governed by the law as it existed immediately before the
  effective date of this Act, and that law is continued in effect for
  that purpose.
         SECTION 7.  Section 4201.206, Insurance Code, as amended by
  this Act, applies only to a utilization review requested on or after
  the effective date of this Act. A utilization review requested
  before the effective date of this Act is governed by the law as it
  existed immediately before the effective date of this Act, and that
  law is continued in effect for that purpose.
         SECTION 8.  This Act takes effect September 1, 2021.
 
 
  ______________________________ ______________________________
     President of the Senate Speaker of the House     
 
 
         I certify that H.B. No. 3459 was passed by the House on May 7,
  2021, by the following vote:  Yeas 127, Nays 16, 1 present, not
  voting; that the House concurred in Senate amendments to H.B. No.
  3459 on May 28, 2021, by the following vote:  Yeas 140, Nays 4, 2
  present, not voting; and that the House adopted H.C.R. No. 112
  authorizing certain corrections in H.B. No. 3459 on May 29, 2021, by
  the following vote: Yeas 139, Nays 1, 1 present, not voting.
 
  ______________________________
  Chief Clerk of the House   
 
         I certify that H.B. No. 3459 was passed by the Senate, with
  amendments, on May 22, 2021, by the following vote:  Yeas 29, Nays
  1; and that the Senate adopted H.C.R. No. 112 authorizing certain
  corrections in H.B. No. 3459 on May 30, 2021, by the following vote:
  Yeas 31, Nays 0.
 
  ______________________________
  Secretary of the Senate   
  APPROVED: __________________
                  Date       
   
           __________________
                Governor