Texas 2009 - 81st Regular

Texas Senate Bill SB351 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	81R2694 AJA-F
2	2	By: Shapleigh S.B. No. 351
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to payment of certain emergency room physicians for
8	8	services provided to enrollees of managed care health benefit
9	9	plans; providing an administrative penalty.
10	10	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
11	11	SECTION 1. Section 843.351, Insurance Code, is amended to
12	12	read as follows:
13	13	Sec. 843.351. SERVICES PROVIDED BY CERTAIN PHYSICIANS AND
14	14	PROVIDERS. (a) The provisions of this subchapter relating to
15	15	prompt payment by a health maintenance organization of a physician
16	16	or provider and to verification of health care services apply to a
17	17	physician or provider who:
18	18	(1) is not included in the health maintenance
19	19	organization delivery network; and
20	20	(2) provides to an enrollee:
21	21	(A) care related to an emergency or its attendant
22	22	episode of care as required by state or federal law; or
23	23	(B) specialty or other health care services at
24	24	the request of the health maintenance organization or a physician
25	25	or provider who is included in the health maintenance organization
26	26	delivery network because the services are not reasonably available
27	27	within the network.
28	28	(b) A claim by a physician described by Subsection (a)(1)
29	29	for care described by Subsection (a)(2)(A) that complies with the
30	30	requirements of this subchapter and is payable by the health
31	31	maintenance organization shall be paid at the lesser of:
32	32	(1) the total billed charge; or
33	33	(2) the greater of:
34	34	(A) the interim payment rate for the billed
35	35	services established under Section 843.3511; or
36	36	(B) an amount equal to the reasonable and
37	37	customary charge for the billed services.
38	38	(c) A physician who submits a claim that is subject to
39	39	Subsection (b) may not bill the enrollee or another person
40	40	responsible for the enrollee's medical care for any amount not paid
41	41	by the health maintenance organization.
42	42	SECTION 2. Subchapter J, Chapter 843, Insurance Code, is
43	43	amended by adding Section 843.3511 to read as follows:
44	44	Sec. 843.3511. INTERIM PAYMENT RATE. (a) The commissioner
45	45	by rule shall adopt interim payment rates for medical care and
46	46	health care services to be used for the purposes of Section
47	47	843.351(b).
48	48	(b) The commissioner shall determine the interim payment
49	49	rate for a medical care or health care service at least annually by:
50	50	(1) adjusting the rate for the service applicable
51	51	under the January 1, 2007, published Medicare rates for the service
52	52	provided by emergency physicians by region in Texas, to reflect any
53	53	change in the Medical Care Professional Services component of the
54	54	annual revised consumer price index for all urban consumers for
55	55	Texas, as published by the federal Bureau of Labor Statistics,
56	56	during the period following the most recent adoption of a rate for
57	57	the service; or
58	58	(2) adopting a rate for the service applicable under a
59	59	version of Medicare rates for emergency physicians by region in
60	60	Texas published not more than 12 months before the interim payment
61	61	rate is adopted.
62	62	(c) The commissioner shall adopt an interim payment
63	63	standard for a new Current Procedural Terminology code recognized
64	64	for payment by the federal Medicare program not later than the 60th
65	65	day after the date the code is recognized.
66	66	SECTION 3. Section 1301.069, Insurance Code, is amended to
67	67	read as follows:
68	68	Sec. 1301.069. SERVICES PROVIDED BY CERTAIN PHYSICIANS AND
69	69	HEALTH CARE PROVIDERS. (a) The provisions of this chapter
70	70	relating to prompt payment by an insurer of a physician or health
71	71	care provider and to verification of medical care or health care
72	72	services apply to a physician or provider who:
73	73	(1) is not a preferred provider included in the
74	74	preferred provider network; and
75	75	(2) provides to an insured:
76	76	(A) care related to an emergency or its attendant
77	77	episode of care as required by state or federal law; or
78	78	(B) specialty or other medical care or health
79	79	care services at the request of the insurer or a preferred provider
80	80	because the services are not reasonably available from a preferred
81	81	provider who is included in the preferred delivery network.
82	82	(b) A claim by a physician described by Subsection (a)(1)
83	83	for care described by Subsection (a)(2)(A) that complies with the
84	84	requirements of this subchapter and is payable by the preferred
85	85	provider organization shall be paid at the lesser of:
86	86	(1) the total billed charge; or
87	87	(2) the greater of:
88	88	(A) the interim payment rate for the billed
89	89	services established under Section 1301.0691; or
90	90	(B) an amount equal to the reasonable and
91	91	customary charge for the billed services.
92	92	(c) A physician who submits a claim that is subject to
93	93	Subsection (b) may not bill the insured for any amount not paid by
94	94	the preferred provider organization.
95	95	SECTION 4. Subchapter B, Chapter 1301, Insurance Code, is
96	96	amended by adding Section 1301.0691 to read as follows:
97	97	Sec. 1301.0691. INTERIM PAYMENT RATE. (a) The
98	98	commissioner by rule shall adopt interim payment rates for medical
99	99	care and health care services to be used for the purposes of Section
100	100	1301.069(b).
101	101	(b) The commissioner shall determine the interim payment
102	102	rate for a medical care or health care service at least annually by:
103	103	(1) adjusting the rate for the service applicable
104	104	under the January 1, 2007, published Medicare rates for the service
105	105	provided by emergency physicians by region in Texas, to reflect any
106	106	change in the Medical Care Professional Services component of the
107	107	annual revised consumer price index for all urban consumers for
108	108	Texas, as published by the federal Bureau of Labor Statistics,
109	109	during the period following the most recent adoption of a rate for
110	110	the service; or
111	111	(2) adopting a rate for the service applicable under a
112	112	version of Medicare rates for emergency physicians by region in
113	113	Texas published not more than 12 months before the interim payment
114	114	rate is adopted.
115	115	(c) The commissioner shall adopt an interim payment
116	116	standard for a new Current Procedural Terminology code recognized
117	117	for payment by the federal Medicare program not later than the 60th
118	118	day after the date the code is recognized.
119	119	SECTION 5. Subtitle C, Title 8, Insurance Code, is amended
120	120	by adding Chapter 1275 to read as follows:
121	121	CHAPTER 1275. INDEPENDENT DISPUTE RESOLUTION PROCESS FOR BILLING
122	122	DISPUTES WITH CERTAIN NONNETWORK PROVIDERS
123	123	Sec. 1275.001. DEFINITIONS. In this chapter:
124	124	(1) "Health benefit plan" means:
125	125	(A) a health maintenance organization contract
126	126	or evidence of coverage issued under Chapter 843; or
127	127	(B) a preferred provider organization benefit
128	128	plan issued under Chapter 1301.
129	129	(2) "Issuer," with respect to a health benefit plan,
130	130	includes any third-party administrator for the plan.
131	131	(3) "Organization" means the independent dispute
132	132	resolution organization that contracts with the department under
133	133	this chapter.
134	134	Sec. 1275.002. APPLICABILITY OF CHAPTER. (a) This chapter
135	135	applies only to a claim subject to Section 843.351(b) or
136	136	1301.069(b).
137	137	(b) If the physician who submitted the claim elects to
138	138	participate in dispute resolution under this chapter, the health
139	139	maintenance organization or insurer to which the claim was
140	140	submitted is required to participate in the dispute resolution
141	141	process. If the health maintenance organization or insurer to
142	142	which the claim was submitted elects to participate in dispute
143	143	resolution under this chapter, the physician is required to
144	144	participate.
145	145	(c) The organization may not make determinations regarding
146	146	a coverage dispute between a health benefit plan issuer and an
147	147	enrollee. A dispute that arises as a result of that coverage
148	148	dispute is not eligible for dispute resolution under this chapter
149	149	unless the coverage dispute is resolved in favor of the enrollee.
150	150	Sec. 1275.003. FEES. The commissioner by rule shall
151	151	establish a fee schedule to pay for the aggregate cost of processing
152	152	disputes under this chapter. The fees shall be paid directly to the
153	153	organization in the manner prescribed by rule by the commissioner.
154	154	Sec. 1275.004. INDEPENDENT DISPUTE RESOLUTION
155	155	ORGANIZATION. (a) In this section:
156	156	(1) "Material familial affiliation" means any
157	157	relationship as a spouse, child, parent, sibling, spouse's parent,
158	158	or child's spouse.
159	159	(2) "Material financial affiliation" means any
160	160	financial interest of more than five percent of total annual
161	161	revenue or total annual income of the organization or individual to
162	162	which this section applies. The term does not include payment by
163	163	the health benefit plan issuer to the organization for the services
164	164	required by this chapter or an expert's participation as a
165	165	contracting health benefit plan provider.
166	166	(3) "Material professional affiliation" means a
167	167	physician-patient relationship, any partnership or employment
168	168	relationship, a shareholder or similar ownership interest in a
169	169	professional corporation, or any independent contractor
170	170	arrangement that constitutes a material financial affiliation with
171	171	any expert or any officer or director of the organization. The term
172	172	does not include affiliations that are limited to staff privileges
173	173	at a health facility.
174	174	(b) The department shall contract with an independent
175	175	dispute resolution organization to administer the independent
176	176	dispute resolution process under this chapter.
177	177	(c) The independent dispute resolution organization must:
178	178	(1) be independent of any health benefit plan issuer
179	179	regulated under this code or any organization of emergency
180	180	physicians engaging in business in this state;
181	181	(2) not be an affiliate or subsidiary of, or in any way
182	182	owned or controlled by, a health benefit plan issuer regulated
183	183	under this code, a physician or physician group, or a trade
184	184	association of health benefit plans, physicians, or physician
185	185	groups; and
186	186	(3) submit to the department the following information
187	187	on initial application to contract with the department for purposes
188	188	of this chapter and, except as otherwise provided, annually
189	189	thereafter on any change to any of the following information:
190	190	(A) the names of all stockholders and owners of
191	191	more than five percent of any stock or options if the organization
192	192	is publicly held;
193	193	(B) the names of all holders of bonds or notes in
194	194	excess of $100,000;
195	195	(C) the names of all corporations and
196	196	organizations that the organization controls or is affiliated with,
197	197	and the nature and extent of any ownership or control, including the
198	198	affiliated organization's type of business;
199	199	(D) the names and biographical sketches of all
200	200	directors, officers, and executives of the organization, as well as
201	201	a statement regarding any past or present relationships the
202	202	directors, officers, and executives may have with any health
203	203	benefit plan issuer, disability insurer, managed care
204	204	organization, medical or health care provider group, or board or
205	205	committee of a health benefit plan issuer, managed care
206	206	organization, or medical or health care provider group;
207	207	(E) a description of the dispute resolution
208	208	process the organization proposes to use, including the method of
209	209	selecting dispute resolution experts; and
210	210	(F) a description of how the organization ensures
211	211	compliance with the conflict-of-interest requirements of this
212	212	section.
213	213	(d) The independent dispute resolution organization, any
214	214	expert the organization designates to conduct dispute resolution,
215	215	or any officer, director, or employee of the organization may not
216	216	have a material professional, familial, or financial affiliation,
217	217	as determined by the commissioner with:
218	218	(1) a health benefit plan issuer;
219	219	(2) an officer, director, or employee of a health
220	220	benefit plan issuer; or
221	221	(3) a physician, a physicians' medical group, or the
222	222	independent practice association involved in the covered emergency
223	223	medical service in dispute or any entity that contracts with a
224	224	physician, a physicians' medical group, or the independent practice
225	225	association to provide billing services, including coding of
226	226	claims, determination of the amount that should be paid on claims,
227	227	billing and collecting fees, or negotiating claims.
228	228	(e) The commissioner by rule may adopt additional
229	229	requirements that the organization must meet, including
230	230	conflict-of-interest standards not specified in this section.
231	231	(f) The department shall provide on request a copy of all
232	232	nonproprietary information, as determined by the commissioner,
233	233	filed with the department by an organization seeking to contract
234	234	with the department under this section. The department may charge a
235	235	nominal fee for photocopying the information.
236	236	Sec. 1275.005. SUBMISSION OF DISPUTE BY PLAN ISSUER. (a)
237	237	Before submitting a dispute under this chapter, a health benefit
238	238	plan issuer shall send an electronic or printed notice to the
239	239	physician who submitted the relevant claim stating:
240	240	(1) the plan issuer's intention to submit the claim to
241	241	the organization for dispute resolution;
242	242	(2) the physician's name and identification number;
243	243	(3) the enrollee's name and identification number;
244	244	(4) a clear description of the disputed item, the date
245	245	of service, and a clear explanation of the basis on which the plan
246	246	issuer believes the claim is inappropriate;
247	247	(5) a request for adjustment of the claim or other
248	248	action; and
249	249	(6) an alternative proposed payment for the service
250	250	provided and the specific methodology and database used to compute
251	251	the payment.
252	252	(b) On or before the 30th day after the date a physician
253	253	receives a notice under this section, the physician may:
254	254	(1) refund to the health benefit plan issuer the
255	255	difference between the paid amount and the alternative payment
256	256	proposed in the notice; or
257	257	(2) attempt to negotiate an amount with the plan
258	258	issuer that settles the dispute.
259	259	(c) If the physician does not make a refund to the plan
260	260	issuer and a negotiation under this section is not completed before
261	261	the later of the 30th day after the date the physician received the
262	262	notice or a later date agreed on by the parties for completing the
263	263	negotiation, the physician must participate in the plan issuer's
264	264	internal dispute resolution process unless the plan issuer waives
265	265	the use of that process.
266	266	(d) If the physician is not satisfied with the outcome of
267	267	the plan's internal dispute resolution process or use of that
268	268	process is waived by the plan issuer, the physician must defend the
269	269	dispute through the dispute resolution process under this chapter.
270	270	The physician shall notify the plan issuer of the physician's
271	271	intent to defend the claim under this chapter on or before the 30th
272	272	day after the date the internal dispute resolution process is
273	273	completed or the plan issuer waives the use of that process.
274	274	Sec. 1275.006. SUBMISSION OF DISPUTE BY PHYSICIAN. (a)
275	275	Before submitting a dispute under this chapter, a physician shall
276	276	send an electronic or printed notice to the health benefit plan
277	277	issuer stating:
278	278	(1) the physician's intention to submit the dispute to
279	279	the organization;
280	280	(2) the physician's name, identification number, and
281	281	contact information;
282	282	(3) the enrollee's name and identification number;
283	283	(4) a clear description of the disputed item, the date
284	284	of service, and a clear explanation of the basis on which the
285	285	physician believes the claim is inappropriate;
286	286	(5) a request for adjustment of the claim or other
287	287	action; and
288	288	(6) an alternative proposed payment for the service
289	289	provided and the specific methodology and database used to compute
290	290	the payment.
291	291	(b) On or before the 30th day after the date a plan issuer
292	292	receives a notice under this section, the plan issuer may:
293	293	(1) pay the physician the difference between the paid
294	294	amount and the alternative payment proposed in the notice; or
295	295	(2) attempt to negotiate an amount with the physician
296	296	that settles the dispute.
297	297	(c) If the plan issuer does not make a payment under
298	298	Subsection (b)(1) and a negotiation under Subsection (b)(2) is not
299	299	completed before the later of the 30th day after the date the plan
300	300	issuer received the notice or a later date agreed on by the parties
301	301	for completing the negotiation, the plan issuer may require the
302	302	physician to participate in the plan issuer's internal dispute
303	303	resolution process.
304	304	(d) If the plan issuer does not require the physician to
305	305	participate in the plan's internal dispute resolution process, the
306	306	plan issuer must defend the dispute through the dispute resolution
307	307	process under this chapter. The plan issuer shall notify the
308	308	physician of the plan issuer's intent to defend the claim under this
309	309	chapter on or before the 30th day after the date the plan issuer
310	310	makes the determination not to require use of the plan issuer's
311	311	internal dispute resolution process.
312	312	(e) If the physician is not satisfied with the outcome of a
313	313	plan issuer's internal dispute resolution process required under
314	314	this section, the physician may submit the dispute to the
315	315	organization not later than the 30th day after the date the plan
316	316	issuer's internal dispute resolution process is completed.
317	317	Sec. 1275.007. SUBMISSION OF MULTIPLE CLAIMS. A health
318	318	benefit plan issuer or physician may include up to 50 substantially
319	319	similar disputes in a single notice under Section 1275.005 or
320	320	1275.006, as applicable, if each disputed item is clearly
321	321	identified and the notice contains the information required by this
322	322	section. For the purposes of this section, substantially similar
323	323	disputes are those that involve the same or similar services or
324	324	codes provided by the same physician.
325	325	Sec. 1275.008. DISPUTE RESOLUTION POLICIES AND PROCEDURES;
326	326	DETERMINATION OF REASONABLE AND CUSTOMARY CHARGE. Subject to the
327	327	commissioner's approval, the organization shall establish and
328	328	publish written policies and procedures for receiving claims for
329	329	dispute resolution and making determinations regarding disputes
330	330	under this chapter. The policies and procedures must include a
331	331	process by which the organization determines the reasonable and
332	332	customary charge for health care services that are the subject of a
333	333	claim dispute.
334	334	Sec. 1275.009. BILLING AND CODING DETERMINATIONS. (a) A
335	335	determination issued by the organization must include any necessary
336	336	determinations regarding related billing issues, including
337	337	appropriate coding and bundling of services.
338	338	(b) The organization or the department shall retain claims
339	339	documentation or coding experts to assist with questions related to
340	340	claims documentation and coding.
341	341	Sec. 1275.010. ISSUANCE OF DETERMINATION; DETERMINATION OF
342	342	CHARGE. (a) Not later than the 60th day after the date a claim
343	343	dispute is submitted to the organization under this chapter, the
344	344	organization shall issue its determination regarding the complaint
345	345	to the parties to the dispute. The nonprevailing party shall
346	346	satisfy any order in the determination not later than the 15th day
347	347	after the date the determination is issued.
348	348	(b) In the determination, the organization shall choose
349	349	only one of the following:
350	350	(1) the physician's initial charge;
351	351	(2) the initial amount the plan issuer paid; or
352	352	(3) the alternative proposed payment suggested in the
353	353	relevant notice under Section 1275.005 or 1275.006.
354	354	(c) The alternative proposed payment must be selected if the
355	355	plan issuer paid nothing initially or the plan issuer believes the
356	356	payment at the interim payment rate constituted an overpayment.
357	357	(d) A determination under this section must be based on a
358	358	preponderance of the evidence and select the amount that more
359	359	closely reflects the reasonable and customary rate of the relevant
360	360	service consistent with the reimbursement standard identified in
361	361	Section 1275.008 and the coding and bundling standards identified
362	362	in Section 1275.009.
363	363	(e) The nonprevailing party shall pay the fee set under
364	364	Section 1275.003.
365	365	Sec. 1275.011. ADMINISTRATIVE PENALTY. (a) The department
366	366	shall impose an administrative penalty under Chapter 84 if the
367	367	department determines that the health benefit plan issuer:
368	368	(1) shows a pattern or practice of violating this
369	369	chapter and Section 843.351(b) or 1301.069(b); or
370	370	(2) engages in a practice that abuses the dispute
371	371	resolution process under this chapter.
372	372	(b) If the department determines that the physician has
373	373	engaged in a practice described by Subsection (a)(1) or (2), the
374	374	department shall refer the matter to the Texas Medical Board for
375	375	appropriate disciplinary action, including imposition of an
376	376	administrative penalty under Chapter 165, Occupations Code.
377	377	Sec. 1275.012. REPORTING. (a) The organization shall
378	378	collect information regarding results obtained through the dispute
379	379	resolution process under this chapter and file the information with
380	380	the department monthly.
381	381	(b) The department shall report on the information
382	382	submitted to the department under this section to the governor, the
383	383	lieutenant governor, and the speaker of the house of
384	384	representatives on or before January 1, 2013. The report must
385	385	contain information regarding:
386	386	(1) the effectiveness of the dispute resolution
387	387	process under this chapter;
388	388	(2) whether the operation of the dispute resolution
389	389	process should be continued; and
390	390	(3) the impact of the dispute resolution process on
391	391	emergency safety net providers, reimbursement rates, contracts,
392	392	and enrollee access to care.
393	393	Sec. 1275.013. PUBLIC INFORMATION; CONFIDENTIALITY.
394	394	Except as provided by this section, the records of and
395	395	determinations made by the organization are public information.
396	396	The department shall keep confidential:
397	397	(1) any information determined by the commissioner to
398	398	be proprietary information of a health benefit plan issuer or
399	399	physician; and
400	400	(2) in accordance with state and federal law, any
401	401	individually identifiable patient information.
402	402	SECTION 6. Subtitle B, Title 3, Occupations Code, is
403	403	amended by adding Chapter 161 to read as follows:
404	404	CHAPTER 161. PATIENT BILLING
405	405	Sec. 161.001. ENROLLEES COVERED BY CERTAIN MANAGED CARE
406	406	PLANS. (a) In this section:
407	407	(1) "Issuer," with respect to a managed care health
408	408	benefit plan, includes a third-party administrator.
409	409	(2) "Managed care health benefit plan" means:
410	410	(A) a health maintenance organization contract
411	411	or evidence of coverage issued under Chapter 843, Insurance Code;
412	412	or
413	413	(B) a preferred provider organization policy
414	414	issued under Chapter 1301, Insurance Code.
415	415	(b) Except as provided by this section, an emergency
416	416	physician who provides services at a general acute care hospital
417	417	may seek reimbursement for covered services provided to an enrollee
418	418	in a managed care health benefit plan only from the issuer of that
419	419	plan. The physician may seek payment from an enrollee for any
420	420	copayments, deductibles, or coinsurance for which the enrollee is
421	421	responsible under the plan for the services provided.
422	422	(c) An enrollee who is billed by a physician in violation of
423	423	this section may report receipt of the bill to the managed care
424	424	health benefit plan issuer, the Texas Department of Insurance, and
425	425	the board. A managed care health benefit plan issuer that becomes
426	426	aware that one of the plan's enrollees has been billed in violation
427	427	of this section shall report the violation to the department and the
428	428	board. The department and the board shall take appropriate action
429	429	against a physician who is determined to have violated this
430	430	section.
431	431	(d) An enrollee in a managed care health benefit plan is not
432	432	liable for an amount billed in violation of this section.
433	433	SECTION 7. (a) On or before December 1, 2008, the
434	434	commissioner of insurance and the Texas Medical Board shall adopt
435	435	rules as necessary to implement this Act.
436	436	(b) The change in law made by this Act applies to payment for
437	437	services under a health maintenance organization contract or
438	438	preferred provider organization policy delivered, issued for
439	439	delivery, or renewed on or after January 1, 2010. A policy or
440	440	contract delivered, issued for delivery, or renewed before that
441	441	date is subject to the law as it existed immediately before the
442	442	effective date of this Act, and that law is continued in effect for
443	443	that purpose.
444	444	SECTION 8. This Act takes effect September 1, 2009.