81R9831 PMO-F
By: Smith of Tarrant H.B. No. 2431
A BILL TO BE ENTITLED
AN ACT
relating to mediation of out-of-network health benefit claim
disputes between enrollees and health benefit plan issuers.
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 SETTLEMENT MEDIATION
Sec. 1467.001. DEFINITIONS. In this chapter:
(1) "Billing code" means the American Medical
Association's Current Procedural Terminology (CPT) code, the
Healthcare Common Procedure Coding System (HCPCS), a revenue code,
or any other code used by physicians or health care providers to
obtain reimbursement.
(2) "Enrollee" means an individual who is eligible to
receive benefits through a health benefit plan.
(3) "Fee array" means a schedule of the billing codes
relevant to a claim settlement dispute that are used by a health
benefit plan issuer in paying the claim. For each billing code, the
fee array is composed of:
(A) the highest fee paid by the health benefit
plan issuer for a particular medical service, health care service,
or medical supply for the code during the preceding 12 calendar
months;
(B) the lowest fee paid by the health benefit
plan issuer for the particular medical service, health care
service, or medical supply for the code during the preceding 12
calendar months; and
(C) the median fee paid by the health benefit
plan issuer for the particular medical service, health care
service, or medical supply for the code during the preceding 12
calendar months.
(4) "Mediation" means a process in which an impartial
mediator facilitates and promotes a voluntary agreement between the
parties to settle a health benefit claim.
(5) "Mediator" means an impartial person who is
appointed to conduct a mediation under this chapter.
(6) "Party" means a health benefit plan issuer or an
enrollee who participates in a mediation conducted under this
chapter.
Sec. 1467.002. APPLICABILITY OF CHAPTER. This chapter
applies to any health benefit plan that:
(1) provides benefits for medical or surgical expenses
incurred as a result of a health condition, accident, or sickness,
including an individual, group, blanket, or franchise insurance
policy or insurance agreement, a group hospital service contract,
or an individual or group evidence of coverage that is offered by:
(A) an insurance company;
(B) a group hospital service corporation
operating under Chapter 842;
(C) a fraternal benefit society operating under
Chapter 885;
(D) a stipulated premium company operating under
Chapter 884;
(E) a health maintenance organization operating
under Chapter 843;
(F) a multiple employer welfare arrangement that
holds a certificate of authority under Chapter 846;
(G) an approved nonprofit health corporation
that holds a certificate of authority under Chapter 844; or
(H) an entity not authorized under this code or
another insurance law of this state that contracts directly for
health care services on a risk-sharing basis, including a
capitation basis; or
(2) provides health and accident coverage through a
risk pool created under Chapter 172, Local Government Code,
notwithstanding Section 172.014, Local Government Code, or any
other law.
Sec. 1467.003. AVAILABILITY OF MEDIATION; PUBLIC INSURANCE
COUNSEL. (a) An enrollee may request mediation of a settlement of
an out-of-network health benefit claim if:
(1) the health benefit plan issuer does not determine
the financial responsibility of the issuer and enrollee based
solely on the amount submitted on the claim by an out-of-network
health care provider; and
(2) the amount for which the enrollee is responsible,
including the amount unpaid by the issuer, is greater than $500.
(b) The public insurance counsel may request mediation on
behalf of an enrollee under this chapter.
Sec. 1467.004. 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
commissioner.
(b) A person not qualified under Subsection (a) may be
appointed as a mediator on agreement of the parties.
(c) A person may not mediate a claim settlement dispute if
the person has been employed by, consulted for, or otherwise had a
business relationship with, the health benefit plan issuer during
the seven years immediately preceding the request for mediation.
Sec. 1467.005. APPOINTMENT OF MEDIATOR; FEES. (a) A
mediation shall be conducted by one mediator.
(b) The mediator shall be appointed by the commissioner
through a random assignment from a list of qualified mediators
maintained by the department.
(c) Notwithstanding Subsection (b), a person other than a
mediator appointed by the commissioner may conduct the mediation on
agreement of the parties and notice to the commissioner.
(d) The health benefit plan issuer shall pay all costs of
the mediation, including the mediator's fees.
Sec. 1467.006. 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 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) whether the public insurance counsel will
participate in the mediation; and
(5) any other information the commissioner may require
by rule.
(c) Except on agreement of the parties, a mandatory
mediation must take place within 30 miles of the enrollee's
residence.
(d) Not later than the 60th day after the date of the
appointment of a mediator, the health benefit plan issuer, for use
by the parties in the mediation, shall file with the mediator the
fee array for the billing codes or diagnosis-related groups related
to the disputed claim settlement, together with all bundling logic
and claims processing policies for the codes. The mediator shall
provide a copy of the fee array to the enrollee and, if the office of
public insurance counsel is involved, to the public insurance
counsel, not later than the 30th day before the date on which the
mediation is scheduled to occur.
Sec. 1467.007. CONDUCT OF MEDIATION; CONFIDENTIALITY. (a)
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 Sections 1467.008, 1467.009, and
1467.010, the mediator must hold in strict confidence all
information provided by or communication with a party.
(d) A party must have an opportunity to speak and state the
party's position.
(e) Legal counsel may be present to represent and advise
clients about legal rights and the implication of a suggested
solution.
(f) Except on the agreement of the parties, a mediation may
not last more than eight 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) Other than to enforce this chapter, a mediator may not
be called as a witness in a proceeding related to the claim
settlement.
Sec. 1467.008. MEDIATION AGREEMENT. (a) If the parties
reach a tentative agreement, the mediator shall provide information
to prepare a proposed mediation agreement.
(b) After the parties approve the details of the proposed
agreement, the parties shall agree on a person to prepare the final
document. The parties may select the mediator to prepare the final
document.
(c) A party that does not reach an agreement may request
another mediation session which another party may decline. The
request for another session may be made in writing or orally to the
mediator and may include a request for extension of time.
(d) Notwithstanding any other law, if the parties agree that
they cannot reach a final mediated agreement, the mediator shall
report to the commissioner that the mediation failed to produce an
agreement.
(e) If the parties reach a mediated agreement, the mediator
shall send a copy of the final mediated agreement to the
commissioner.
Sec. 1467.009. BAD FAITH. (a) For purposes of this chapter,
bad faith negotiation is a failure to:
(1) attend the mediation;
(2) provide information that the mediator indicates to
a party is necessary to facilitate an agreement; or
(3) send a designated representative to the mediation
with full authority to enter into a mediated agreement.
(b) Failure to reach an agreement is not in itself proof of
bad faith negotiation.
(c) The mediator may terminate a mediation immediately if a
party fails to negotiate in good faith.
(d) Notwithstanding any other law, a mediator shall report
bad faith negotiation by a health benefit plan issuer to the
commissioner following the conclusion or termination of the
mediation.
(e) On appropriate proof, the commissioner shall impose on a
health benefit plan issuer that is reported under Subsection (d)
the maximum administrative penalty allowed under Chapter 84.
Sec. 1467.010. CONSUMER PROTECTION; RULES. (a) The
commissioner, a designee from the department's consumer protection
division, or any other person designated by the commissioner, may
attend a mediation held under this chapter.
(b) The commissioner shall adopt rules regulating the
investigation and review of a complaint filed with the department
that relates to the settlement of an out-of-network health benefit
claim. 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 consumers of the
availability of the mediation process under this chapter;
(3) ensure an enrollee who files a complaint about
additional out-of-network billing is informed that the enrollee can
request mediation of the amount paid by the health benefit plan
issuer; and
(4) ensure that a complaint is not dismissed without
appropriate consideration.
(c) The department shall maintain information:
(1) on each complaint filed with the department that
concerns an activity regulated by this chapter; and
(2) related to an out-of-network 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 physician or
other health care provider that provided the out-of-network
service;
(C) the county and metropolitan area in which the
health care service was provided;
(D) whether the medical or health care service
was for emergency care; and
(E) any other information about the health
benefit plan issuer the commissioner by rule may require.
(d) The information collected and maintained by the
department under Subsection (c)(2) is public information as defined
in Section 552.002, Government Code, and may not include personal
identifiable information.
(e) An enrollee's request for mediation does not prohibit
the department from investigating a dispute or pursuing
disciplinary actions against a health benefit plan issuer.
(f) The commissioner shall adopt other rules as necessary to
implement this chapter.
Sec. 1467.011. REMEDIES NOT EXCLUSIVE. The remedies
provided by this chapter are in addition to any other defense,
remedy, or procedure provided by law or at common law.
Sec. 1467.012. ATTORNEY-CLIENT RELATIONSHIP NOT CREATED.
In bringing or participating in a mediation under this chapter, the
public insurance counsel acts in the name of the state and does not
establish an attorney-client relationship with a party, including
an enrollee whose claim is the basis for the request for mediation
or who filed a complaint with the office of public insurance
counsel.
SECTION 2. This Act applies only to a claim filed with a
health benefit plan issuer 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 3. 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.