By: Hancock, Martinez Fischer, Rodriguez, H.B. No. 2256
Smith of Tarrant, et al.
A BILL TO BE ENTITLED
AN ACT
relating to mediation of out-of-network health benefit claim
disputes concerning enrollees, facility-based physicians, and
certain health benefit plans; imposing an administrative penalty.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subtitle F, Title 8, Insurance Code, is amended
by adding Chapter 1467 to read as follows:
CHAPTER 1467. OUT-OF-NETWORK CLAIM DISPUTE RESOLUTION
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 1467.001. DEFINITIONS. In this chapter:
(1) "Administrator" means:
(A) an administering firm for a health benefit
plan providing coverage under Chapter 1551; and
(B) if applicable, the claims administrator for
the health benefit plan.
(2) "Chief administrative law judge" means the chief
administrative law judge of the State Office of Administrative
Hearings.
(3) "Enrollee" means an individual who is eligible to
receive benefits through a preferred provider benefit plan or a
health benefit plan under Chapter 1551.
(4) "Facility-based physician" means a radiologist,
an anesthesiologist, a pathologist, an emergency department
physician, or a neonatologist:
(A) to whom the facility has granted clinical
privileges; and
(B) who provides services to patients of the
facility under those clinical privileges.
(5) "Mediation" means a process in which an impartial
mediator facilitates and promotes agreement between the insurer
offering a preferred provider benefit plan or the administrator and
a facility-based physician to settle a health benefit claim of an
enrollee.
(6) "Mediator" means an impartial person who is
appointed to conduct a mediation under this chapter.
(7) "Party" means an insurer offering a preferred
provider benefit plan, an administrator, or a facility-based
physician who participates in a mediation conducted under this
chapter. The enrollee is also considered a party to the mediation.
Sec. 1467.002. APPLICABILITY OF CHAPTER. This chapter
applies to:
(1) a preferred provider benefit plan offered by an
insurer under Chapter 1301; and
(2) an administrator of a health benefit plan, other
than a health maintenance organization plan, under Chapter 1551.
Sec. 1467.003. RULES. The commissioner, the Texas Medical
Board, and the chief administrative law judge shall adopt rules as
necessary to implement their respective powers and duties under
this chapter.
Sec. 1467.004. REMEDIES NOT EXCLUSIVE. The remedies
provided by this chapter are in addition to any other defense,
remedy, or procedure provided by law, including the common law.
Sec. 1467.005. REFORM. This chapter may not be construed to
prohibit:
(1) an insurer offering a preferred provider benefit
plan or administrator from, at any time, offering a reformed claim
settlement; or
(2) a facility-based physician from, at any time,
offering a reformed charge for medical services.
[Sections 1467.006-1467.050 reserved for expansion]
SUBCHAPTER B. MANDATORY MEDIATION
Sec. 1467.051. AVAILABILITY OF MANDATORY MEDIATION;
EXCEPTION. (a) An enrollee may request mediation of a settlement of
an out-of-network health benefit claim if:
(1) the amount for which the enrollee is responsible
to a facility-based physician, after copayments, deductibles, and
coinsurance, including the amount unpaid by the administrator or
insurer, is greater than $1,000; and
(2) the health benefit claim is for a medical service
or supply provided by a facility-based physician in a hospital that
is a preferred provider or that has a contract with the
administrator.
(b) Except as provided by Subsections (c) and (d), if an
enrollee requests mediation under this subchapter, the
facility-based physician and the insurer or the administrator, as
appropriate, shall participate in the mediation.
(c) Except in the case of an emergency, a facility-based
physician shall, before providing a medical service or supply,
provide a complete disclosure to an enrollee that:
(1) explains that the facility-based physician does
not have a contract with the enrollee's health benefit plan;
(2) discloses specific amounts for which the enrollee
may be responsible; and
(3) discloses the circumstances under which the
enrollee would be responsible for those amounts.
(d) A facility-based physician who makes a disclosure under
Subsection (c) and obtains the enrollee's written acknowledgment of
that disclosure may not be required to mediate a billed charge under
this subchapter if the amount billed is less than or equal to the
maximum amount stated in the disclosure.
Sec. 1467.052. MEDIATOR QUALIFICATIONS. (a) Except as
provided by Subsection (b), to qualify for an appointment as a
mediator under this 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 chief
administrative law judge.
(b) A person not qualified under Subsection (a) may be
appointed as a mediator on agreement of the parties.
(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 an insurer offering the
preferred provider benefit plan or a physician during the three
years immediately preceding the request for mediation.
Sec. 1467.053. APPOINTMENT OF MEDIATOR; FEES. (a) A
mediation shall be conducted by one mediator.
(b) The chief administrative law judge shall appoint the
mediator through a random assignment from a list of qualified
mediators maintained by the State Office of Administrative
Hearings.
(c) Notwithstanding Subsection (b), a person other than a
mediator appointed by the chief administrative law judge may
conduct the mediation on agreement of all of the parties and notice
to the chief administrative law judge.
(d) The mediator's fees shall be split evenly and paid by
the insurer or administrator and the facility-based physician.
Sec. 1467.054. REQUEST AND PRELIMINARY PROCEDURES FOR
MANDATORY MEDIATION. (a) An enrollee may request mandatory
mediation under this chapter.
(b) A request for mandatory mediation must be provided to
the department on a form prescribed by the commissioner and must
include:
(1) the name of the enrollee requesting mediation;
(2) a brief description of the claim to be mediated;
(3) contact information, including a telephone
number, for the requesting enrollee and the enrollee's counsel, if
the enrollee retains counsel;
(4) the name of the facility-based physician and name
of the insurer or administrator; and
(5) any other information the commissioner may require
by rule.
(c) On receipt of a request for mediation, the department
shall notify the facility-based physician and insurer or
administrator of the request.
(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 the enrollee
submits a request for mediation under this section.
(e) A dispute to be mediated under this chapter that does
not settle as a result of a teleconference conducted under
Subsection (d) must be conducted in the county in which the medical
services were rendered.
(f) The enrollee may elect to participate in the mediation.
A mediation may not proceed without the consent of the enrollee. An
enrollee may withdraw the request for mediation at any time before
the mediation.
(g) Notwithstanding Subsection (f), mediation may proceed
without the participation of the enrollee or the enrollee's
representative if the enrollee or representative is not present in
person or through teleconference.
Sec. 1467.055. CONDUCT OF MEDIATION; CONFIDENTIALITY. (a)
Except as provided by Sections 1467.056 and 1467.057, a mediator
may not impose the mediator's judgment on a party about an issue
that is a subject of the mediation.
(b) A mediation session is under the control of the
mediator.
(c) Except as provided by this chapter, the mediator must
hold in strict confidence all information provided to the mediator
by a party and all communications of the mediator with a party.
(d) If the enrollee is participating in the mediation in
person, at the beginning of the mediation the mediator shall inform
the enrollee that if the enrollee is not satisfied with the mediated
agreement, the enrollee may file a complaint with:
(1) the Texas Medical Board against the facility-based
physician for improper billing; and
(2) the department for unfair claim settlement
practices.
(e) A party must have an opportunity during the mediation to
speak and state the party's position.
(f) Except on the agreement of the participating parties, a
mediation may not last more than four hours.
(g) 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.
(h) On receipt of notice from the department that an
enrollee has made a request for mediation that meets the
requirements of this chapter, the facility-based physician may not
pursue any collection effort against the enrollee who has requested
mediation for amounts other than copayments, deductibles, and
coinsurance before the earlier of:
(1) the date the mediation is completed; or
(2) the date the request to mediate is withdrawn.
(i) A service provided by a facility-based physician may not
be summarily disallowed. This subsection does not require an
insurer or administrator to pay for an uncovered service.
(j) A mediator may not testify in a proceeding, other than a
proceeding to enforce this chapter, related to the mediation
agreement.
Sec. 1467.056. MATTERS CONSIDERED IN MEDIATION; AGREED
RESOLUTION. (a) In a mediation under this chapter, the parties
shall evaluate whether:
(1) the amount charged by the facility-based physician
for the medical service or supply is excessive;
(2) the amount paid by the insurer or administrator
represents the usual and customary rate for the medical service or
supply or is unreasonably low; and
(3) the amount for which an enrollee will be
responsible to the facility-based physician, after copayments,
deductibles, and coinsurance, is excessive.
(b) The facility-based physician may present information to
justify the amount charged for the medical service or supply. The
insurer or administrator may present information to justify the
amount paid by the insurer.
(c) Nothing in this chapter prohibits mediation of more than
one claim between the parties during a mediation.
(d) The goal of the mediation is to obtain agreement between
the facility-based physician and the insurer or administrator, as
appropriate, as to the amount to be charged by the physician and
paid by the insurer or administrator to the facility-based
physician.
Sec. 1467.057. NO AGREED RESOLUTION. (a) The mediator of an
unsuccessful mediation under this chapter shall report the outcome
of the mediation to the department, the Texas Medical Board, and the
chief administrative law judge.
(b) The chief administrative law judge shall enter an order
of referral of a matter reported under Subsection (a) to a special
judge under Chapter 151, Civil Practice and Remedies Code, that:
(1) names the special judge on whom the parties agreed
or appoints the special judge if the parties did not agree on a
judge;
(2) states the issues to be referred and the time and
place on which the parties agree for the trial;
(3) requires each party to pay the party's
proportionate share of the special judge's fee; and
(4) certifies that the parties have waived the right
to trial by jury.
(c) A trial by the special judge selected or appointed as
described by Subsection (b) must proceed under Chapter 151, Civil
Practice and Remedies Code, except that the special judge's verdict
is not relevant or material to any other balance bill dispute and
has no precedential value.
(d) Notwithstanding any other provision of this section,
Sections 151.012 and 151.013, Civil Practice and Remedies Code, do
not apply to a mediation under this chapter.
Sec. 1467.058. CONTINUATION OF MEDIATION. After a referral
is made under Section 1467.057, the facility-based physician and
the insurer or administrator may elect to continue the mediation to
further determine their responsibilities. Continuation of
mediation under this section does not affect the amount of the
billed charge to the enrollee.
Sec. 1467.059. MEDIATION AGREEMENT. The mediator shall
prepare a confidential mediation agreement and order that states:
(1) the total amount for which the enrollee will be
responsible to the facility-based physician, after copayments,
deductibles, and coinsurance; and
(2) any agreement reached by the parties under Section
1467.058.
Sec. 1467.060. REPORT OF MEDIATOR. The mediator shall
report to the commissioner and the Texas Medical Board:
(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.
[Sections 1467.061-1467.100 reserved for expansion]
SUBCHAPTER C. BAD FAITH MEDIATION
Sec. 1467.101. BAD FAITH. (a) The following conduct
constitutes bad faith mediation for purposes of this chapter:
(1) failing to participate in the mediation;
(2) failing to provide information the mediator
believes is necessary to facilitate an agreement; or
(3) failing to designate a representative
participating in the mediation with full authority to enter into
any mediated agreement.
(b) Failure to reach an agreement is not conclusive proof of
bad faith mediation.
(c) A mediator shall report bad faith mediation to the
commissioner or the Texas Medical Board, as appropriate, following
the conclusion of the mediation.
Sec. 1467.102. PENALTIES. (a) Bad faith 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 mediation, the regulatory agency
that issued the license or certificate of authority shall impose an
administrative penalty.
[Sections 1467.103-1467.150 reserved for expansion]
SUBCHAPTER D. COMPLAINTS; CONSUMER PROTECTION
Sec. 1467.151. CONSUMER PROTECTION; RULES. (a) The
commissioner and the Texas Medical Board, 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 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;
(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 shall
maintain information:
(1) on each complaint filed that concerns a claim or
mediation subject to this chapter; and
(2) related to a claim that is the basis of an enrollee
complaint, including:
(A) the type of services that gave rise to the
dispute;
(B) the type and specialty of the facility-based
physician who provided the out-of-network service;
(C) the county and metropolitan area in which the
medical service or supply was provided;
(D) whether the medical service or supply was for
emergency care; and
(E) any other information about the insurer or
administrator the commissioner or the Texas Medical Board by rule
may require.
(c) The information collected and maintained by the
department and the Texas Medical Board under Subsection (b)(2) is
public information as defined by Section 552.002, Government Code,
and may not include personally identifiable information or medical
information.
(d) A facility-based physician who fails to provide a
disclosure under Section 1467.051 is not subject to discipline by
the Texas Medical Board for that failure and a cause of action is
not created by a failure to disclose as required by Section
1467.051.
SECTION 2. Subchapter A, Chapter 1301, Insurance Code, is
amended by adding Sections 1301.0055 and 1301.0056 to read as
follows:
Sec. 1301.0055. NETWORK ADEQUACY STANDARDS. The
commissioner shall by rule adopt network adequacy standards that
are adapted to local markets in which an insurer offering a
preferred provider benefit plan operates. The rules must include
standards that ensure availability of, and accessibility to, a full
range of health care practitioners to provide health care services
to insureds.
Sec. 1301.0056. REIMBURSEMENT REPORTING. (a) An insurer
offering a preferred provider benefit plan must submit to the
department, as prescribed by the commissioner, information
regarding:
(1) the methods used by the insurer to compute
out-of-network reimbursements, such as a maximum allowable amount;
and
(2) the effect of the computation described by
Subdivision (1) on the out-of-pocket expenses of an insured.
(b) The commissioner shall establish by rule the
information required under Subsection (a).
SECTION 3. Section 1456.004, Insurance Code, is amended by
adding Subsection (c) to read as follows:
(c) A facility-based physician who bills a patient covered
by a preferred provider benefit plan or a health benefit plan under
Chapter 1551 that does not have a contract with the facility-based
physician shall send a billing statement to the patient with
information sufficient to notify the patient of the mandatory
mediation process available under Chapter 1467 if the amount for
which the enrollee is responsible, after copayments, deductibles,
and coinsurance, including the amount unpaid by the administrator
or insurer, is greater than $500.
SECTION 4. Chapter 1456, Insurance Code, is amended by
adding Section 1456.0045 to read as follows:
Sec. 1456.0045. REQUIRED DISCLOSURE: FACILITIES. A health
care facility shall provide to each patient to be admitted to, or
who is expected to receive services from, the facility a list
containing the name and contact information for each facility-based
physician with privileges to provide medical services at the
facility. The list shall also inform patients that facility-based
physicians may not have a contract with the health benefit plan with
which the facility has a contract. The list must also inform
patients they may receive a bill for medical services from
facility-based physicians for those amounts unpaid by the patient's
health benefit plan.
SECTION 5. This Act applies only to a health benefit claim
filed on or after the effective date of this Act. A claim filed
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 6. As soon as practicable after the effective date
of this Act, the commissioner of insurance, Texas Medical Board,
and chief administrative law judge of the State Office of
Administrative Hearings shall adopt rules as necessary to implement
and enforce this Act.
SECTION 7. 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, 2009.