89R7645 SCF-D

By: Spiller H.B. No. 4585

A BILL TO BE ENTITLED

AN ACT

relating to the submission, payment, and audit of certain claims for and utilization review of health services, including services provided under the Medicaid managed care and child health plan programs.

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

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

Sec. 540.0265. SUBMISSION AND [PROMPT] PAYMENT OF CLAIMS.

SECTION 2. Section 540.0265, Government Code, as effective April 1, 2025, is amended by amending Subsection (a) and adding Subsections (c), (d), (e), and (f) to read as follows:

(a) A contract to which this subchapter applies must require the contracting Medicaid managed care organization to determine whether a claim is payable and pay a physician or provider for health care services provided to a recipient under a Medicaid managed care plan on any clean claim for payment the organization receives [with documentation reasonably necessary for the organization to process the claim]:

(1) not later than:

(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;

(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 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.

(c) A contract to which this subchapter applies must require a contracting Medicaid managed care organization to disclose to a physician or provider:

(1) the address, including a physical address, where a claim is sent for processing;

(2) the telephone number a physician or provider may call regarding a question or concern about a claim;

(3) the name and physical address of any entity to which the organization has delegated claim payment functions;

(4) the mailing address, physical address, and telephone number of any separate claims processing center used to process claims for specific services; and

(5) by providing written notice not later than the 61st day before the change, any change to an address, telephone number, or entity described by Subdivisions (1)-(4).

(d) A contract to which this subchapter applies must specify that the contracting Medicaid managed care organization:

(1) must allow a physician or provider to submit a claim for payment during a period of not less than 95 days beginning on the date the service for which the claim is made was provided; and

(2) is subject to the applicable penalties prescribed by Section 1301.137, Insurance Code, if the organization fails to comply with the payment requirements of this section.

(e) For purposes of this section:

(1) a claim a physician or provider submits to a Medicaid managed care organization is considered to be a clean claim if the claim meets the requirements of Section 1301.131, Insurance Code, and rules adopted under that section; and

(2) the organization is considered to be the insurer and the physician or provider is considered to be the preferred provider with respect to the application of a provision of Chapter 1301, Insurance Code, to the organization, physician, or provider.

(f) The provisions required under this section may not be waived, modified, or voided under a contract to which this subchapter applies or under a contract between a contracting Medicaid managed care organization and a physician or provider, except as provided by Subsection (a)(2).

SECTION 3. Subchapter F, Chapter 540, Government Code, as effective April 1, 2025, is amended by adding Section 540.02651 to read as follows:

Sec. 540.02651. AUDIT OF CLAIM; OVERPAYMENT RECOVERY. (a) A contract to which this subchapter applies must require the contracting Medicaid managed care organization to comply with Sections 1301.105(b), (c), and (d), 1301.1051, and 1301.132, Insurance Code.

(b) For purposes of this section, the contracting Medicaid managed care organization is considered to be the insurer and the physician or provider is considered to be the preferred provider with respect to the application of a provision of Chapter 1301, Insurance Code, to the organization, physician, or provider.

(c) The provisions required under this section may not be waived, modified, or voided under a contract to which this subchapter applies or under a contract between a contracting Medicaid managed care organization and a physician or provider.

SECTION 4. 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) contracting with an independent review organization overseen by the commission to resolve claims disputes in the manner provided by Subchapter I, Chapter 4201, Insurance Code, that remain unresolved after an appeal under Subdivision (2), if applicable;

(4) the determination of the independent review organization [physician] resolving the dispute to be binding on the organization and provider; and

(5) [(4)] the organization to allow a provider to initiate an appeal of a claim that has not been paid before the time prescribed by Section 540.0265(a)(1)(B).

SECTION 5. Subchapter B, Chapter 62, Health and Safety Code, is amended by adding Section 62.0551 to read as follows:

Sec. 62.0551. REQUIRED CONTRACT PROVISIONS. (a) A contract between the commission and a child health plan provider under Section 62.155 must include the requirements specified by Sections 540.0265, 540.02651, and 540.0267, Government Code.

(b) Sections 540.0265, 540.02651, and 540.0267, Government Code, apply to a child health plan provider and health care provider providing health care services under the child health plan in the same manner and to the same extent those provisions apply to a Medicaid managed care organization and a physician or provider under the Medicaid program.

SECTION 6. Section 4201.251, Insurance Code, is amended to read as follows:

Sec. 4201.251. DELEGATION OF UTILIZATION REVIEW. (a) A utilization review agent may delegate utilization review to qualified personnel in the hospital or other health care facility in which the health care services to be reviewed were or are to be provided. The delegation does not release the agent from the full responsibility for compliance with this chapter or other applicable law, including the conduct of those to whom utilization review has been delegated.

(b) A utilization review agent may not delegate utilization review to an artificial intelligence application or other similar computer software.

SECTION 7. Section 4201.252(a), Insurance Code, is amended to read as follows:

(a) Personnel employed by or under contract with a utilization review agent to perform utilization review:

(1) must be appropriately trained and qualified and meet the requirements of this chapter and other applicable law, including applicable licensing requirements; and

(2) may not delegate utilization review to an artificial intelligence application or other similar computer software.

SECTION 8. (a) Sections 540.0265 and 540.0267, Government Code, as amended by this Act, and Section 540.02651, Government Code, as added by this Act, apply only to a contract between the Health and Human Services Commission and a managed care organization that is entered into or renewed on or after the effective date of this Act.

(b) To the extent permitted by the terms of the contract, the Health and Human Services Commission shall seek to amend a contract entered into before the effective date of this Act with a managed care organization to comply with Sections 540.0265 and 540.0267, Government Code, as amended by this Act, and Section 540.02651, Government Code, as added by this Act.

SECTION 9. (a) Section 62.0551, Health and Safety Code, as added by this Act, applies only to a contract between the Health and Human Services Commission and a child health plan provider under Chapter 62, Health and Safety Code, that is entered into or renewed on or after the effective date of this Act.

(b) To the extent permitted by the terms of the contract, the Health and Human Services Commission shall seek to amend a contract entered into before the effective date of this Act with a child health plan provider to comply with Section 62.0551, Health and Safety Code, as added by this Act.

SECTION 10. The changes to Chapter 4201, Insurance Code, as amended by this Act, apply only to a health benefit plan delivered, issued for delivery, or renewed on or after January 1, 2026. A health benefit plan delivered, issued for delivery, or renewed before January 1, 2026, 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 11. 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 12. This Act takes effect September 1, 2025.