81R2694 AJA-F
By: Shapleigh S.B. No. 351
A BILL TO BE ENTITLED
AN ACT
relating to payment of certain emergency room physicians for
services provided to enrollees of managed care health benefit
plans; providing an administrative penalty.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 843.351, Insurance Code, is amended to
read as follows:
Sec. 843.351. SERVICES PROVIDED BY CERTAIN PHYSICIANS AND
PROVIDERS. (a) The provisions of this subchapter relating to
prompt payment by a health maintenance organization of a physician
or provider and to verification of health care services apply to a
physician or provider who:
(1) is not included in the health maintenance
organization delivery network; and
(2) provides to an enrollee:
(A) care related to an emergency or its attendant
episode of care as required by state or federal law; or
(B) specialty or other health care services at
the request of the health maintenance organization or a physician
or provider who is included in the health maintenance organization
delivery network because the services are not reasonably available
within the network.
(b) A claim by a physician described by Subsection (a)(1)
for care described by Subsection (a)(2)(A) that complies with the
requirements of this subchapter and is payable by the health
maintenance organization shall be paid at the lesser of:
(1) the total billed charge; or
(2) the greater of:
(A) the interim payment rate for the billed
services established under Section 843.3511; or
(B) an amount equal to the reasonable and
customary charge for the billed services.
(c) A physician who submits a claim that is subject to
Subsection (b) may not bill the enrollee or another person
responsible for the enrollee's medical care for any amount not paid
by the health maintenance organization.
SECTION 2. Subchapter J, Chapter 843, Insurance Code, is
amended by adding Section 843.3511 to read as follows:
Sec. 843.3511. INTERIM PAYMENT RATE. (a) The commissioner
by rule shall adopt interim payment rates for medical care and
health care services to be used for the purposes of Section
843.351(b).
(b) The commissioner shall determine the interim payment
rate for a medical care or health care service at least annually by:
(1) adjusting the rate for the service applicable
under the January 1, 2007, published Medicare rates for the service
provided by emergency physicians by region in Texas, to reflect any
change in the Medical Care Professional Services component of the
annual revised consumer price index for all urban consumers for
Texas, as published by the federal Bureau of Labor Statistics,
during the period following the most recent adoption of a rate for
the service; or
(2) adopting a rate for the service applicable under a
version of Medicare rates for emergency physicians by region in
Texas published not more than 12 months before the interim payment
rate is adopted.
(c) The commissioner shall adopt an interim payment
standard for a new Current Procedural Terminology code recognized
for payment by the federal Medicare program not later than the 60th
day after the date the code is recognized.
SECTION 3. Section 1301.069, Insurance Code, is amended to
read as follows:
Sec. 1301.069. SERVICES PROVIDED BY CERTAIN PHYSICIANS AND
HEALTH CARE PROVIDERS. (a) The provisions of this chapter
relating to prompt payment by an insurer of a physician or health
care provider and to verification of medical care or health care
services apply to a physician or provider who:
(1) is not a preferred provider included in the
preferred provider network; and
(2) provides to an insured:
(A) care related to an emergency or its attendant
episode of care as required by state or federal law; or
(B) specialty or other medical care or health
care services at the request of the insurer or a preferred provider
because the services are not reasonably available from a preferred
provider who is included in the preferred delivery network.
(b) A claim by a physician described by Subsection (a)(1)
for care described by Subsection (a)(2)(A) that complies with the
requirements of this subchapter and is payable by the preferred
provider organization shall be paid at the lesser of:
(1) the total billed charge; or
(2) the greater of:
(A) the interim payment rate for the billed
services established under Section 1301.0691; or
(B) an amount equal to the reasonable and
customary charge for the billed services.
(c) A physician who submits a claim that is subject to
Subsection (b) may not bill the insured for any amount not paid by
the preferred provider organization.
SECTION 4. Subchapter B, Chapter 1301, Insurance Code, is
amended by adding Section 1301.0691 to read as follows:
Sec. 1301.0691. INTERIM PAYMENT RATE. (a) The
commissioner by rule shall adopt interim payment rates for medical
care and health care services to be used for the purposes of Section
1301.069(b).
(b) The commissioner shall determine the interim payment
rate for a medical care or health care service at least annually by:
(1) adjusting the rate for the service applicable
under the January 1, 2007, published Medicare rates for the service
provided by emergency physicians by region in Texas, to reflect any
change in the Medical Care Professional Services component of the
annual revised consumer price index for all urban consumers for
Texas, as published by the federal Bureau of Labor Statistics,
during the period following the most recent adoption of a rate for
the service; or
(2) adopting a rate for the service applicable under a
version of Medicare rates for emergency physicians by region in
Texas published not more than 12 months before the interim payment
rate is adopted.
(c) The commissioner shall adopt an interim payment
standard for a new Current Procedural Terminology code recognized
for payment by the federal Medicare program not later than the 60th
day after the date the code is recognized.
SECTION 5. Subtitle C, Title 8, Insurance Code, is amended
by adding Chapter 1275 to read as follows:
CHAPTER 1275. INDEPENDENT DISPUTE RESOLUTION PROCESS FOR BILLING
DISPUTES WITH CERTAIN NONNETWORK PROVIDERS
Sec. 1275.001. DEFINITIONS. In this chapter:
(1) "Health benefit plan" means:
(A) a health maintenance organization contract
or evidence of coverage issued under Chapter 843; or
(B) a preferred provider organization benefit
plan issued under Chapter 1301.
(2) "Issuer," with respect to a health benefit plan,
includes any third-party administrator for the plan.
(3) "Organization" means the independent dispute
resolution organization that contracts with the department under
this chapter.
Sec. 1275.002. APPLICABILITY OF CHAPTER. (a) This chapter
applies only to a claim subject to Section 843.351(b) or
1301.069(b).
(b) If the physician who submitted the claim elects to
participate in dispute resolution under this chapter, the health
maintenance organization or insurer to which the claim was
submitted is required to participate in the dispute resolution
process. If the health maintenance organization or insurer to
which the claim was submitted elects to participate in dispute
resolution under this chapter, the physician is required to
participate.
(c) The organization may not make determinations regarding
a coverage dispute between a health benefit plan issuer and an
enrollee. A dispute that arises as a result of that coverage
dispute is not eligible for dispute resolution under this chapter
unless the coverage dispute is resolved in favor of the enrollee.
Sec. 1275.003. FEES. The commissioner by rule shall
establish a fee schedule to pay for the aggregate cost of processing
disputes under this chapter. The fees shall be paid directly to the
organization in the manner prescribed by rule by the commissioner.
Sec. 1275.004. INDEPENDENT DISPUTE RESOLUTION
ORGANIZATION. (a) In this section:
(1) "Material familial affiliation" means any
relationship as a spouse, child, parent, sibling, spouse's parent,
or child's spouse.
(2) "Material financial affiliation" means any
financial interest of more than five percent of total annual
revenue or total annual income of the organization or individual to
which this section applies. The term does not include payment by
the health benefit plan issuer to the organization for the services
required by this chapter or an expert's participation as a
contracting health benefit plan provider.
(3) "Material professional affiliation" means a
physician-patient relationship, any partnership or employment
relationship, a shareholder or similar ownership interest in a
professional corporation, or any independent contractor
arrangement that constitutes a material financial affiliation with
any expert or any officer or director of the organization. The term
does not include affiliations that are limited to staff privileges
at a health facility.
(b) The department shall contract with an independent
dispute resolution organization to administer the independent
dispute resolution process under this chapter.
(c) The independent dispute resolution organization must:
(1) be independent of any health benefit plan issuer
regulated under this code or any organization of emergency
physicians engaging in business in this state;
(2) not be an affiliate or subsidiary of, or in any way
owned or controlled by, a health benefit plan issuer regulated
under this code, a physician or physician group, or a trade
association of health benefit plans, physicians, or physician
groups; and
(3) submit to the department the following information
on initial application to contract with the department for purposes
of this chapter and, except as otherwise provided, annually
thereafter on any change to any of the following information:
(A) the names of all stockholders and owners of
more than five percent of any stock or options if the organization
is publicly held;
(B) the names of all holders of bonds or notes in
excess of $100,000;
(C) the names of all corporations and
organizations that the organization controls or is affiliated with,
and the nature and extent of any ownership or control, including the
affiliated organization's type of business;
(D) the names and biographical sketches of all
directors, officers, and executives of the organization, as well as
a statement regarding any past or present relationships the
directors, officers, and executives may have with any health
benefit plan issuer, disability insurer, managed care
organization, medical or health care provider group, or board or
committee of a health benefit plan issuer, managed care
organization, or medical or health care provider group;
(E) a description of the dispute resolution
process the organization proposes to use, including the method of
selecting dispute resolution experts; and
(F) a description of how the organization ensures
compliance with the conflict-of-interest requirements of this
section.
(d) The independent dispute resolution organization, any
expert the organization designates to conduct dispute resolution,
or any officer, director, or employee of the organization may not
have a material professional, familial, or financial affiliation,
as determined by the commissioner with:
(1) a health benefit plan issuer;
(2) an officer, director, or employee of a health
benefit plan issuer; or
(3) a physician, a physicians' medical group, or the
independent practice association involved in the covered emergency
medical service in dispute or any entity that contracts with a
physician, a physicians' medical group, or the independent practice
association to provide billing services, including coding of
claims, determination of the amount that should be paid on claims,
billing and collecting fees, or negotiating claims.
(e) The commissioner by rule may adopt additional
requirements that the organization must meet, including
conflict-of-interest standards not specified in this section.
(f) The department shall provide on request a copy of all
nonproprietary information, as determined by the commissioner,
filed with the department by an organization seeking to contract
with the department under this section. The department may charge a
nominal fee for photocopying the information.
Sec. 1275.005. SUBMISSION OF DISPUTE BY PLAN ISSUER. (a)
Before submitting a dispute under this chapter, a health benefit
plan issuer shall send an electronic or printed notice to the
physician who submitted the relevant claim stating:
(1) the plan issuer's intention to submit the claim to
the organization for dispute resolution;
(2) the physician's name and identification number;
(3) the enrollee's name and identification number;
(4) a clear description of the disputed item, the date
of service, and a clear explanation of the basis on which the plan
issuer believes the claim is inappropriate;
(5) a request for adjustment of the claim or other
action; and
(6) an alternative proposed payment for the service
provided and the specific methodology and database used to compute
the payment.
(b) On or before the 30th day after the date a physician
receives a notice under this section, the physician may:
(1) refund to the health benefit plan issuer the
difference between the paid amount and the alternative payment
proposed in the notice; or
(2) attempt to negotiate an amount with the plan
issuer that settles the dispute.
(c) If the physician does not make a refund to the plan
issuer and a negotiation under this section is not completed before
the later of the 30th day after the date the physician received the
notice or a later date agreed on by the parties for completing the
negotiation, the physician must participate in the plan issuer's
internal dispute resolution process unless the plan issuer waives
the use of that process.
(d) If the physician is not satisfied with the outcome of
the plan's internal dispute resolution process or use of that
process is waived by the plan issuer, the physician must defend the
dispute through the dispute resolution process under this chapter.
The physician shall notify the plan issuer of the physician's
intent to defend the claim under this chapter on or before the 30th
day after the date the internal dispute resolution process is
completed or the plan issuer waives the use of that process.
Sec. 1275.006. SUBMISSION OF DISPUTE BY PHYSICIAN. (a)
Before submitting a dispute under this chapter, a physician shall
send an electronic or printed notice to the health benefit plan
issuer stating:
(1) the physician's intention to submit the dispute to
the organization;
(2) the physician's name, identification number, and
contact information;
(3) the enrollee's name and identification number;
(4) a clear description of the disputed item, the date
of service, and a clear explanation of the basis on which the
physician believes the claim is inappropriate;
(5) a request for adjustment of the claim or other
action; and
(6) an alternative proposed payment for the service
provided and the specific methodology and database used to compute
the payment.
(b) On or before the 30th day after the date a plan issuer
receives a notice under this section, the plan issuer may:
(1) pay the physician the difference between the paid
amount and the alternative payment proposed in the notice; or
(2) attempt to negotiate an amount with the physician
that settles the dispute.
(c) If the plan issuer does not make a payment under
Subsection (b)(1) and a negotiation under Subsection (b)(2) is not
completed before the later of the 30th day after the date the plan
issuer received the notice or a later date agreed on by the parties
for completing the negotiation, the plan issuer may require the
physician to participate in the plan issuer's internal dispute
resolution process.
(d) If the plan issuer does not require the physician to
participate in the plan's internal dispute resolution process, the
plan issuer must defend the dispute through the dispute resolution
process under this chapter. The plan issuer shall notify the
physician of the plan issuer's intent to defend the claim under this
chapter on or before the 30th day after the date the plan issuer
makes the determination not to require use of the plan issuer's
internal dispute resolution process.
(e) If the physician is not satisfied with the outcome of a
plan issuer's internal dispute resolution process required under
this section, the physician may submit the dispute to the
organization not later than the 30th day after the date the plan
issuer's internal dispute resolution process is completed.
Sec. 1275.007. SUBMISSION OF MULTIPLE CLAIMS. A health
benefit plan issuer or physician may include up to 50 substantially
similar disputes in a single notice under Section 1275.005 or
1275.006, as applicable, if each disputed item is clearly
identified and the notice contains the information required by this
section. For the purposes of this section, substantially similar
disputes are those that involve the same or similar services or
codes provided by the same physician.
Sec. 1275.008. DISPUTE RESOLUTION POLICIES AND PROCEDURES;
DETERMINATION OF REASONABLE AND CUSTOMARY CHARGE. Subject to the
commissioner's approval, the organization shall establish and
publish written policies and procedures for receiving claims for
dispute resolution and making determinations regarding disputes
under this chapter. The policies and procedures must include a
process by which the organization determines the reasonable and
customary charge for health care services that are the subject of a
claim dispute.
Sec. 1275.009. BILLING AND CODING DETERMINATIONS. (a) A
determination issued by the organization must include any necessary
determinations regarding related billing issues, including
appropriate coding and bundling of services.
(b) The organization or the department shall retain claims
documentation or coding experts to assist with questions related to
claims documentation and coding.
Sec. 1275.010. ISSUANCE OF DETERMINATION; DETERMINATION OF
CHARGE. (a) Not later than the 60th day after the date a claim
dispute is submitted to the organization under this chapter, the
organization shall issue its determination regarding the complaint
to the parties to the dispute. The nonprevailing party shall
satisfy any order in the determination not later than the 15th day
after the date the determination is issued.
(b) In the determination, the organization shall choose
only one of the following:
(1) the physician's initial charge;
(2) the initial amount the plan issuer paid; or
(3) the alternative proposed payment suggested in the
relevant notice under Section 1275.005 or 1275.006.
(c) The alternative proposed payment must be selected if the
plan issuer paid nothing initially or the plan issuer believes the
payment at the interim payment rate constituted an overpayment.
(d) A determination under this section must be based on a
preponderance of the evidence and select the amount that more
closely reflects the reasonable and customary rate of the relevant
service consistent with the reimbursement standard identified in
Section 1275.008 and the coding and bundling standards identified
in Section 1275.009.
(e) The nonprevailing party shall pay the fee set under
Section 1275.003.
Sec. 1275.011. ADMINISTRATIVE PENALTY. (a) The department
shall impose an administrative penalty under Chapter 84 if the
department determines that the health benefit plan issuer:
(1) shows a pattern or practice of violating this
chapter and Section 843.351(b) or 1301.069(b); or
(2) engages in a practice that abuses the dispute
resolution process under this chapter.
(b) If the department determines that the physician has
engaged in a practice described by Subsection (a)(1) or (2), the
department shall refer the matter to the Texas Medical Board for
appropriate disciplinary action, including imposition of an
administrative penalty under Chapter 165, Occupations Code.
Sec. 1275.012. REPORTING. (a) The organization shall
collect information regarding results obtained through the dispute
resolution process under this chapter and file the information with
the department monthly.
(b) The department shall report on the information
submitted to the department under this section to the governor, the
lieutenant governor, and the speaker of the house of
representatives on or before January 1, 2013. The report must
contain information regarding:
(1) the effectiveness of the dispute resolution
process under this chapter;
(2) whether the operation of the dispute resolution
process should be continued; and
(3) the impact of the dispute resolution process on
emergency safety net providers, reimbursement rates, contracts,
and enrollee access to care.
Sec. 1275.013. PUBLIC INFORMATION; CONFIDENTIALITY.
Except as provided by this section, the records of and
determinations made by the organization are public information.
The department shall keep confidential:
(1) any information determined by the commissioner to
be proprietary information of a health benefit plan issuer or
physician; and
(2) in accordance with state and federal law, any
individually identifiable patient information.
SECTION 6. Subtitle B, Title 3, Occupations Code, is
amended by adding Chapter 161 to read as follows:
CHAPTER 161. PATIENT BILLING
Sec. 161.001. ENROLLEES COVERED BY CERTAIN MANAGED CARE
PLANS. (a) In this section:
(1) "Issuer," with respect to a managed care health
benefit plan, includes a third-party administrator.
(2) "Managed care health benefit plan" means:
(A) a health maintenance organization contract
or evidence of coverage issued under Chapter 843, Insurance Code;
or
(B) a preferred provider organization policy
issued under Chapter 1301, Insurance Code.
(b) Except as provided by this section, an emergency
physician who provides services at a general acute care hospital
may seek reimbursement for covered services provided to an enrollee
in a managed care health benefit plan only from the issuer of that
plan. The physician may seek payment from an enrollee for any
copayments, deductibles, or coinsurance for which the enrollee is
responsible under the plan for the services provided.
(c) An enrollee who is billed by a physician in violation of
this section may report receipt of the bill to the managed care
health benefit plan issuer, the Texas Department of Insurance, and
the board. A managed care health benefit plan issuer that becomes
aware that one of the plan's enrollees has been billed in violation
of this section shall report the violation to the department and the
board. The department and the board shall take appropriate action
against a physician who is determined to have violated this
section.
(d) An enrollee in a managed care health benefit plan is not
liable for an amount billed in violation of this section.
SECTION 7. (a) On or before December 1, 2008, the
commissioner of insurance and the Texas Medical Board shall adopt
rules as necessary to implement this Act.
(b) The change in law made by this Act applies to payment for
services under a health maintenance organization contract or
preferred provider organization policy delivered, issued for
delivery, or renewed on or after January 1, 2010. A policy or
contract delivered, issued for delivery, or renewed before that
date is subject to the law as it existed immediately before the
effective date of this Act, and that law is continued in effect for
that purpose.
SECTION 8. This Act takes effect September 1, 2009.