89R6276 SCF-F

By: Canales H.B. No. 3863

A BILL TO BE ENTITLED

AN ACT

relating to claims payments to health care providers by health maintenance organizations, preferred provider benefit plans, or managed care organizations.

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

SECTION 1. Section 540.0265, Government Code, as effective April 1, 2025, is amended to read as follows:

Sec. 540.0265. PROMPT PAYMENT OF CLAIMS. (a) A contract to which this subchapter applies must require the contracting Medicaid managed care organization to pay a physician or provider for health care services provided to a recipient under a Medicaid managed care plan on any claim for payment the organization receives with documentation reasonably necessary for the organization to process the claim[:

[(1)] not later than:

(1) [(A)] the 10th day after the date the organization receives the claim if the claim relates to services a nursing facility, intermediate care facility, or group home provided; and

(2) [(B)] the 30th day after the date the organization receives the claim if the claim [relates to the provision of long-term services and supports not subject to Paragraph (A); and

[(C) the 45th day after the date the organization receives the claim if the claim] is not subject to Subdivision (1) [Paragraph (A) or (B); or

[(2) within a period, not to exceed 60 days, specified by a written agreement between the physician or provider and the organization].

(b) A contract to which this subchapter applies must require the contracting Medicaid managed care organization to demonstrate to the commission that the organization pays claims relating to the provision of long-term services and supports other than those described by Subsection (a)(1) [described by Subsection (a)(1)(B)] on average not later than the 21st day after the date the organization receives the claim.

(c) A contract to which this subchapter applies must prohibit the contracting Medicaid managed care organization from requiring a physician or provider to accept a claim payment in the form of a virtual credit card or any other payment method with respect to which a fee, including a processing fee, administrative fee, percentage amount, or dollar amount, is assessed to receive the payment. A nominal fee assessed by the physician's or provider's bank to receive an electronic funds transfer is not considered to be a prohibited fee for purposes of this subsection.

SECTION 2. Section 540.0267(a), Government Code, as effective April 1, 2025, is amended to read as follows:

(a) A contract to which this subchapter applies must require the contracting Medicaid managed care organization to develop, implement, and maintain a system for tracking and resolving provider appeals related to claims payment. The system must include a process that requires:

(1) a tracking mechanism to document the status and final disposition of each provider's claims payment appeal;

(2) contracting with physicians who are not network providers and who are of the same or related specialty as the appealing physician to resolve claims disputes that:

(A) relate to denial on the basis of medical necessity; and

(B) remain unresolved after a provider appeal;

(3) the determination of the physician resolving the dispute to be binding on the organization and provider; and

(4) the organization to allow a provider to initiate an appeal of a claim that relates to the provision of long-term services and supports other than those described by Section 540.0265(a)(1) and that has not been paid before the time prescribed by Section 540.0265(a)(2) [540.0265(a)(1)(B)].

SECTION 3. Section 843.338, Insurance Code, is amended to read as follows:

Sec. 843.338. DEADLINE FOR ACTION ON CLEAN CLAIMS. Except as provided by Sections 843.3385 and 843.339, not later than the [45th day after the date on which a health maintenance organization receives a clean claim from a participating physician or provider in a nonelectronic format or the] 30th day after the date the health maintenance organization receives a clean claim from a participating physician or provider [that is electronically submitted], the health maintenance organization shall make a determination of whether the claim is payable and:

(1) if the health maintenance organization determines the entire claim is payable, pay the total amount of the claim in accordance with the contract between the physician or provider and the health maintenance organization;

(2) if the health maintenance organization determines a portion of the claim is payable, pay the portion of the claim that is not in dispute and notify the physician or provider in writing why the remaining portion of the claim will not be paid; or

(3) if the health maintenance organization determines that the claim is not payable, notify the physician or provider in writing why the claim will not be paid.

SECTION 4. Section 843.340(a), Insurance Code, is amended to read as follows:

(a) Except as provided by Section 843.3385, if a health maintenance organization intends to audit a claim submitted by a participating physician or provider, the health maintenance organization shall pay the charges submitted at 100 percent of the contracted rate on the claim not later than the 30th day after the date the health maintenance organization receives the clean claim from the participating physician or provider [if submitted electronically or if submitted nonelectronically not later than the 45th day after the date on which the health maintenance organization receives the clean claim from a participating physician or provider]. The health maintenance organization shall clearly indicate on the explanation of payment statement in the manner prescribed by the commissioner by rule that the clean claim is being paid at 100 percent of the contracted rate, subject to completion of the audit.

SECTION 5. Sections 843.342(b) and (e), Insurance Code, are amended to read as follows:

(b) If the claim is paid on or after the 31st [46th] day and before the 91st day after the date the health maintenance organization is required to make a determination or adjudication of the claim, the health maintenance organization shall pay a penalty in the amount of the lesser of:

(1) 100 percent of the difference between the billed charges, as submitted on the claim, and the contracted rate; or

(2) $200,000.

(e) If the balance of the claim is paid on or after the 31st [46th] day and before the 91st day after the date the health maintenance organization is required to make a determination or adjudication of the claim, the health maintenance organization shall pay a penalty on the balance of the claim in the amount of the lesser of:

(1) 100 percent of the underpaid amount; or

(2) $200,000.

SECTION 6. Section 843.346, Insurance Code, is amended to read as follows:

Sec. 843.346. PAYMENT OF CLAIMS. (a) Except as provided by this subchapter, a health maintenance organization shall pay a physician or provider for health care services and benefits provided to an enrollee not later than[:

[(1)] the 30th [45th] day after the date on which a claim for payment is received with the documentation reasonably necessary to process the claim[; or

[(2) if applicable, within the number of calendar days specified by written agreement between the physician or provider and the health maintenance organization].

(b) A health maintenance organization may not require a physician or provider to accept a claim payment in the form of a virtual credit card or any other payment method with respect to which a fee, including a processing fee, administrative fee, percentage amount, or dollar amount, is assessed to receive the payment. A nominal fee assessed by the physician's or provider's bank to receive an electronic funds transfer is not considered to be a prohibited fee for purposes of this subsection.

SECTION 7. Section 1301.0053(a), Insurance Code, is amended to read as follows:

(a) If an out-of-network provider provides emergency care as defined by Section 1301.155 or post-emergency stabilization care to an enrollee in an exclusive provider benefit plan, the issuer of the plan shall reimburse the out-of-network provider at the usual and customary rate or at a rate agreed to by the issuer and the out-of-network provider for the provision of the services and any supply related to those services. The insurer shall make a payment required by this subsection directly to the provider not later than[, as applicable:

[(1)] the 30th day after the date the insurer receives a [an electronic] clean claim as defined by Section 1301.101 for those services that includes all information necessary for the insurer to pay the claim[; or

[(2) the 45th day after the date the insurer receives a nonelectronic clean claim as defined by Section 1301.101 for those services that includes all information necessary for the insurer to pay the claim].

SECTION 8. Section 1301.064, Insurance Code, is amended to read as follows:

Sec. 1301.064. CONTRACT PROVISIONS RELATING TO PAYMENT OF CLAIMS. Subject to Subchapter C, a preferred provider contract must provide for payment to a physician or health care provider for health care services and benefits provided to an insured under the contract and to which the insured is entitled under the terms of the contract not later than[:

[(1)] the 30th [45th] day after the date on which a claim for payment is received with the documentation reasonably necessary to process the claim[; or

[(2) if applicable, within the number of calendar days specified by written agreement between the physician or health care provider and the insurer].

SECTION 9. Section 1301.103, Insurance Code, is amended to read as follows:

Sec. 1301.103. DEADLINE FOR ACTION ON CLEAN CLAIMS. Except as provided by Sections 1301.104 and 1301.1054, not later than the [45th day after the date an insurer receives a clean claim from a preferred provider in a nonelectronic format or the] 30th day after the date an insurer receives a clean claim from a preferred provider [that is electronically submitted], the insurer shall make a determination of whether the claim is payable and:

(1) if the insurer determines the entire claim is payable, pay the total amount of the claim in accordance with the contract between the preferred provider and the insurer;

(2) if the insurer determines a portion of the claim is payable, pay the portion of the claim that is not in dispute and notify the preferred provider in writing why the remaining portion of the claim will not be paid; or

(3) if the insurer determines that the claim is not payable, notify the preferred provider in writing why the claim will not be paid.

SECTION 10. Section 1301.105(a), Insurance Code, is amended to read as follows:

(a) Except as provided by Section 1301.1054, an insurer that intends to audit a claim submitted by a preferred provider shall pay the charges submitted at 100 percent of the contracted rate on the claim not later than[:

[(1)] the 30th day after the date the insurer receives the clean claim from the preferred provider [if the claim is submitted electronically; or

[(2) the 45th day after the date the insurer receives the clean claim from the preferred provider if the claim is submitted nonelectronically].

SECTION 11. Sections 1301.137(b) and (e), Insurance Code, are amended to read as follows:

(b) If the claim is paid on or after the 31st [46th] day and before the 91st day after the date the insurer is required to make a determination or adjudication of the claim, the insurer shall pay a penalty in the amount of the lesser of:

(1) 100 percent of the difference between the billed charges, as submitted on the claim, and the contracted rate; or

(2) $200,000.

(e) If the balance of the claim is paid on or after the 31st [46th] day and before the 91st day after the date the insurer is required to make a determination or adjudication of the claim, the insurer shall pay a penalty on the balance of the claim in the amount of the lesser of:

(1) 100 percent of the underpaid amount; or

(2) $200,000.

SECTION 12. Subchapter C-1, Chapter 1301, Insurance Code, is amended by adding Section 1301.141 to read as follows:

Sec. 1301.141. FORM OF CLAIM PAYMENTS. An insurer may not require a physician or health care provider to accept a claim payment in the form of a virtual credit card or any other payment method with respect to which a fee, including a processing fee, administrative fee, percentage amount, or dollar amount, is assessed to receive the payment. A nominal fee assessed by the physician's or provider's bank to receive an electronic funds transfer is not considered to be a prohibited fee for purposes of this subsection.

SECTION 13. Section 1301.155(c), Insurance Code, is amended to read as follows:

(c) For emergency care subject to this section or a supply related to that care, an insurer shall make a payment required by this section directly to the out-of-network provider not later than[, as applicable:

[(1)] the 30th day after the date the insurer receives a [an electronic] clean claim as defined by Section 1301.101 for those services that includes all information necessary for the insurer to pay the claim[; or

[(2) the 45th day after the date the insurer receives a nonelectronic clean claim as defined by Section 1301.101 for those services that includes all information necessary for the insurer to pay the claim].

SECTION 14. Section 1301.164(b), Insurance Code, is amended to read as follows:

(b) Except as provided by Subsection (d), an insurer shall pay for a covered medical care or health care service performed for or a covered supply related to that service provided to an insured by an out-of-network provider who is a facility-based provider 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 preferred provider. The insurer shall make a payment required by this subsection directly to the provider not later than[, as applicable:

[(1)] the 30th day after the date the insurer receives a [an electronic] clean claim as defined by Section 1301.101 for those services that includes all information necessary for the insurer to pay the claim[; or

[(2) the 45th day after the date the insurer receives a nonelectronic clean claim as defined by Section 1301.101 for those services that includes all information necessary for the insurer to pay the claim].

SECTION 15. Section 1301.165(b), Insurance Code, is amended to read as follows:

(b) Except as provided by Subsection (d), an insurer shall pay for a covered medical care or health care service performed by or a covered supply related to that service provided to an insured by an out-of-network provider who is a diagnostic imaging provider or laboratory service provider at the usual and customary rate or at an agreed rate if the provider performed the service in connection with a medical care or health care service performed by a preferred provider. The insurer shall make a payment required by this subsection directly to the provider not later than[, as applicable:

[(1)] the 30th day after the date the insurer receives a [an electronic] clean claim as defined by Section 1301.101 for those services that includes all information necessary for the insurer to pay the claim[; or

[(2) the 45th day after the date the insurer receives a nonelectronic clean claim as defined by Section 1301.101 for those services that includes all information necessary for the insurer to pay the claim].

SECTION 16. Section 1301.166(d), Insurance Code, is amended to read as follows:

(d) The insurer shall make a payment required by this section directly to the provider not later than[, as applicable:

[(1)] the 30th day after the date the insurer receives a [an electronic] clean claim as defined by Section 1301.101 for those services that includes all information necessary for the insurer to pay the claim[; or

[(2) the 45th day after the date the insurer receives a nonelectronic clean claim as defined by Section 1301.101 for those services that includes all information necessary for the insurer to pay the claim].

SECTION 17. (a) Sections 540.0265 and 540.0267, Government Code, as amended by this Act, apply only to a contract entered into on or after the effective date of this Act. A contract entered into 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.

(b) Except as provided by Subsection (c) of this section, the changes in law made by this Act to Chapters 843 and 1301, Insurance Code, apply only to a claim submitted on or after the effective date of this Act. A claim submitted 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.

(c) With respect to a claim submitted under a contract with a health maintenance organization or insurer, the changes in law made by this Act to Chapters 843 and 1301, Insurance Code, apply only to a claim submitted under a contract entered into on or after the effective date of this Act. A claim submitted under a contract entered into 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 18. If before implementing any provision of this Act a state agency determines that a waiver or authorization from a federal agency is necessary for implementation of that provision, the agency affected by the provision shall request the waiver or authorization and may delay implementing that provision until the waiver or authorization is granted.

SECTION 19. This Act takes effect September 1, 2025.