By: Paul H.B. No. 4549

A BILL TO BE ENTITLED

AN ACT

relating to the prompt payment of health insurance claims.

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

SECTION 1. 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, 843.3405, 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 2. Section 843.3405, is amended to read as follows:

Sec. 843.3405. INVESTIGATION AND DETERMINATION OF PAYMENT. (a) Except as provided by Subsection (b), the [The] investigation and determination of payment, including any coordination of other payments, does not extend the period for determining whether a claim is payable under Section 843.338 or 843.339 or for auditing a claim under Section 843.340.

(b) An investigation and determination of payment shall extend the period for determining whether a claim is payable or for auditing a claim if:

(1) the health maintenance organization suspects that the claim was submitted fraudulently or based on a misrepresentation; and

(2) the investigation and determination are made in good faith.

SECTION 3. Section 843.3385(e), Insurance Code, is amended to read as follows:

(e) If a health maintenance organization requests an attachment or other information from a person other than the participating physician or provider who submitted the claim, the health maintenance organization, not later than the 30th calendar day after the insurer receives a clean claim, shall provide notice containing the name of the physician or provider from whom the health maintenance organization is requesting information to the physician or provider who submitted the claim. A health maintenance organization that requests an attachment under this subsection shall determine whether the claim is payable on or before the later of the 15th day after the date the insurer receives the requested attachment or the latest date for determining whether the claim is payable under Section 1301.103 or 1301.104. [The health maintenance organization may not withhold payment pending receipt of an attachment or information requested under this subsection. If on receiving an attachment or information requested under this subsection the health maintenance organization determines that there was an error in payment of the claim, the health maintenance organization may recover any overpayment under Section 843.350.]

SECTION 4. Section 843.343, Insurance Code, is amended to read as follows:

Sec. 843.343. ATTORNEY'S FEES. A physician or provider may recover reasonable attorney's fees and court costs in an action to recover payment under this subchapter only when a health maintenance organization has acted in bad faith in making the payment determination.

SECTION 5. Section 843.350, Insurance Code, is amended by amending Subsection (a) and adding Subsection (c) to read as follows:

(a) Except as provided by Subsection (c), a [A] health maintenance organization may recover an overpayment to a physician or provider if:

(1) not later than the one year [the 180th day] after the date the physician or provider receives the payment, the health maintenance organization provides written notice of the overpayment to the physician or provider that includes the basis and specific reasons for the request for recovery of funds; and

(2) the physician or provider does not make arrangements for repayment of the requested funds on or before the 45th day after the date the physician or provider receives the notice.

(c) A health maintenance organization may recover an overpayment to a physician or health care provider at any time if the claim was submitted fraudulently or based on a misrepresentation.

SECTION 6. Section 843.342, Insurance Code, is amended by amending Subsections (h) and (n) to read as follows:

(h) A health maintenance organization is not liable for a penalty under this section:

(1) if the failure to pay the claim in accordance with this subchapter is a result of a catastrophic event and:

(A) the commissioner published a notice allowing an extension of the applicable prompt payment deadlines due to the catastrophic event; or

(B) the department approved the health maintenance organization's request for an extension due to the substantial interference of the catastrophic event with the normal business operations of the health maintenance organization; or

(2) if the claim was not paid or paid in accordance with this subchapter, but for less than the contracted rate, and:

(A) the physician or provider notifies the health maintenance organization of the underpayment after the 270th day after the date the underpayment was received; and

(B) the health maintenance organization pays the balance of the claim on or before the 30th day after the date the health maintenance organization receives the notice.

(n) In this section:

(1) "Institutional [, "institutional] provider" means a hospital or other medical or health-related service facility that provides care for the sick or injured or other care that may be covered in an evidence of coverage; and

(2) "Billed charges" means the lowest rate the preferred provider will accept directly from a patient as payment in full for the services.

SECTION 7. 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, 1301.1053, 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 8. Section 1301.1053, Insurance Code, is amended to read as follows:

Sec. 1301.1053. DEADLINES NOT EXTENDED. (a) Except as provided by Subsection (b), the [The] investigation and determination of payment, including any coordination of other payments, does not extend the period for determining whether a claim is payable under Section 1301.103 or 1301.104 or for auditing a claim under Section 1301.105.

(b) An investigation and determination of payment shall extend the period for determining whether a claim is payable or for auditing a claim if:

(1) the insurer suspects that the claim was submitted fraudulently or based on a misrepresentation; and

(2) the investigation and determination are made in good faith.

SECTION 9. Section 1301.1054(d), Insurance Code, is amended to read as follows:

(d) If an insurer requests an attachment or other information from a person other than the preferred provider who submitted the claim, the insurer, not later than the 30th calendar day after the insurer receives a clean claim, shall provide notice containing the name of the physician or health care provider from whom the insurer is requesting information to the preferred provider who submitted the claim. An insurer that requests an attachment under this subsection shall determine whether the claim is payable on or before the later of the 15th day after the date the insurer receives the requested attachment or the latest date for determining whether the claim is payable under Section 1301.103 or 1301.104. [The insurer may not withhold payment pending receipt of an attachment or information requested under this subsection. If on receiving an attachment or information requested under this subsection the insurer determines that there was an error in payment of the claim, the insurer may recover any overpayment under Section 1301.132.]

SECTION 10. Section 1301.108, Insurance Code, is amended to read as follows:

Sec. 1301.108. ATTORNEY'S FEES. A preferred provider may recover reasonable attorney's fees and court costs in an action to recover payment under this subchapter only when an insurer has acted in bad faith in making the payment determination.

SECTION 11. Section 1301.132, Insurance Code, is amended by amending Subsection (a) and adding Subsection (c) to read as follows:

(a) Except as provided by Subsection (c), an [An] insurer may recover an overpayment to a physician or health care provider if:

(1) not later than one year [the 180th day] after the date the physician or provider receives the payment, the insurer provides written notice of the overpayment to the physician or provider that includes the basis and specific reasons for the request for recovery of funds; and

(2) the physician or provider does not make arrangements for repayment of the requested funds on or before the 45th day after the date the physician or provider receives the notice.

(c) An insurer may recover an overpayment to a physician or health care provider at any time if the claim was submitted fraudulently or based on a misrepresentation.

SECTION 12. Section 1301.137, Insurance Code, is amended by amending Subsection (h) and adding Subsection (m) to read as follows:

(h) An insurer is not liable for a penalty under this section:

(1) if the failure to pay the claim in accordance with Subchapter C is a result of a catastrophic event and:

(A) the commissioner published a notice allowing an extension of the applicable prompt payment deadlines due to the catastrophic event; or

(B) the department approved the insurer's request for an extension due to the substantial interference of the catastrophic event with the normal business operations of the insurer; or

(2) if the claim was not paid or paid in accordance with Subchapter C, but for less than the contracted rate, and:

(A) the preferred provider notifies the insurer of the underpayment after the 270th day after the date the underpayment was received; and

(B) the insurer pays the balance of the claim on or before the 30th day after the date the insurer receives the notice.

(m) In this section, "billed charges" means the lowest rate the preferred provider will accept directly from a patient as payment in full for the services.

SECTION 13. This Act takes effect immediately if it receives a vote of two-thirds of all the members elected to each house, as provided by Section 39, Article III, Texas Constitution. If this Act does not receive the vote necessary for immediate effect, this Act takes effect September 1, 2025.