By: Van de Putte S.B. No. 714
(In the Senate - Filed February 6, 2009; February 25, 2009,
read first time and referred to Committee on State Affairs;
May 19, 2009, reported adversely, with favorable Committee
Substitute by the following vote: Yeas 9, Nays 0; May 19, 2009,
sent to printer.)
COMMITTEE SUBSTITUTE FOR S.B. No. 714 By: Van de Putte
A BILL TO BE ENTITLED
AN ACT
relating to the regulation of certain health care rental network
contract arrangements; providing a civil 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 1458 to read as follows:
CHAPTER 1458. RENTAL NETWORK CONTRACT ARRANGEMENTS
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 1458.001. GENERAL DEFINITIONS. In this chapter:
(1) "Affiliate" means a person who, directly or
indirectly, through one or more intermediaries, controls, is
controlled by, or is under common control with another person.
(2) "Contracting entity" means a person that enters
into a direct contract with a provider for the delivery of health
care services in the ordinary course of business.
(3) "Covered individual" means an individual who is
covered under a health benefit plan.
(4) "Direct notification" means a written or
electronic communication from a contracting entity to a physician
or other health care provider documenting third party access to a
provider network.
(5) "Health care services" means services provided for
the diagnosis, prevention, treatment, or cure of a health
condition, illness, injury, or disease.
(6) "Person" has the meaning assigned by Section
823.002.
(7) "Provider" means a physician, a professional
association composed solely of physicians, a single legal entity
authorized to practice medicine owned by two or more physicians, a
nonprofit health corporation certified by the Texas Medical Board
under Chapter 162, Occupations Code, a partnership composed solely
of physicians, a physician-hospital organization that acts
exclusively as an administrator for a provider to facilitate the
provider's participation in health care contracts, a health care
practitioner, or an institutional provider or other person or
organization that furnishes health care services that is licensed
or otherwise authorized to practice in this state. The term does
not include a physician-hospital organization that leases or rents
the physician-hospital organization's network to a third party.
(8) "Provider network contract" means a contract
between a contracting entity and a provider for the delivery of, and
payment for, health care services to a covered individual.
(9) "Third party" means a person that contracts with a
contracting entity or third party to gain access to a provider
network contract.
Sec. 1458.002. DEFINITION OF HEALTH BENEFIT PLAN. (a) In
this chapter, "health benefit plan" means:
(1) a hospital and medical expense incurred policy;
(2) a nonprofit health care service plan contract;
(3) a health maintenance organization subscriber
contract; or
(4) any other health care plan or arrangement that
pays for or furnishes medical or health care services.
(b) "Health benefit plan" does not include one or more or
any combination of the following:
(1) coverage only for accident or disability income
insurance or any combination of those coverages;
(2) credit-only insurance;
(3) coverage issued as a supplement to liability
insurance;
(4) liability insurance, including general liability
insurance and automobile liability insurance;
(5) workers' compensation or similar insurance;
(6) coverage for on-site medical clinics;
(7) automobile medical payment insurance; or
(8) other similar insurance coverage, as specified by
federal regulations issued under the Health Insurance Portability
and Accountability Act of 1996 (Pub. L. No. 104-191), under which
benefits for medical care are secondary or incidental to other
insurance benefits.
(c) "Health benefit plan" does not include the following
benefits if they are provided under a separate policy, certificate,
or contract of insurance, or are otherwise not an integral part of
the coverage:
(1) dental or vision benefits;
(2) benefits for long-term care, nursing home care,
home health care, community-based care, or any combination of these
benefits;
(3) other similar, limited benefits, including
benefits specified by federal regulations issued under the Health
Insurance Portability and Accountability Act of 1996 (Pub. L. No.
104-191); or
(4) a Medicare supplement benefit plan described by
Section 1652.002.
(d) "Health benefit plan" does not include coverage limited
to a specified disease or illness or hospital indemnity coverage or
other fixed indemnity insurance coverage if:
(1) the coverage is provided under a separate policy,
certificate, or contract of insurance;
(2) there is no coordination between the provision of
the coverage and any exclusion of benefits under any group health
benefit plan maintained by the same plan sponsor; and
(3) the coverage is paid with respect to an event
without regard to whether benefits are provided with respect to
such an event under any group health benefit plan maintained by the
same plan sponsor.
Sec. 1458.003. EXEMPTIONS. This chapter does not apply:
(1) to a provider network contract for services
provided to a beneficiary under the Medicaid program, the Medicare
program, or the state child health plan established under Chapter
62, Health and Safety Code, or the comparable plan under Chapter 63,
Health and Safety Code;
(2) under circumstances in which access to the
provider network is granted to an entity that operates under the
same brand licensee program as the contracting entity; or
(3) except as provided by Section 1458.104, to a
contract between a contracting entity and a discount health care
program.
[Sections 1458.004-1458.050 reserved for expansion]
SUBCHAPTER B. REGISTRATION REQUIREMENTS
Sec. 1458.051. REGISTRATION REQUIRED. (a) Unless the
person holds a certificate of authority issued by the department to
engage in the business of insurance in this state or operate a
health maintenance organization under Chapter 843, a person must
register with the department not later than the 30th day after the
date on which the person begins acting as a contracting entity in
this state.
(b) Notwithstanding Subsection (a), under Section 1458.055
a contracting entity that holds a certificate of authority issued
by the department to engage in the business of insurance in this
state or is a health maintenance organization may file with the
commissioner an application for exemption from registration for its
affiliates.
Sec. 1458.052. DISCLOSURE OF INFORMATION. (a) A person
required to register under Section 1458.051 must disclose:
(1) all names used by the contracting entity,
including any name under which the contracting entity intends to
engage or has engaged in business in this state;
(2) the mailing address and main telephone number of
the contracting entity's headquarters;
(3) the name and telephone number of the contracting
entity's primary contact for the department; and
(4) any other information required by the commissioner
by rule.
(b) The disclosure made under Subsection (a) must include a
description or a copy of the applicant's basic organizational
structure documents and a copy of organizational charts and lists
that show:
(1) the relationships between the contracting entity
and any affiliates of the contracting entity, including subsidiary
networks or other networks; and
(2) the internal organizational structure of the
contracting entity's management.
Sec. 1458.053. SUBMISSION OF INFORMATION. Information
required under this subchapter must be submitted in a written or
electronic format adopted by the commissioner by rule.
Sec. 1458.054. FEE. The department may collect a
reasonable fee set by the commissioner as necessary to administer
the registration process.
Sec. 1458.055. EXEMPTION FOR AFFILIATES. (a) The
commissioner may grant an exemption for affiliates of a contracting
entity if the contracting entity holds a certificate of authority
issued by the department to engage in the business of insurance in
this state or is a health maintenance organization if the
commissioner determines that:
(1) multiple registrations would require the filing of
duplicative information or would be wasteful of state resources;
(2) the affiliate is not subject to a disclaimer of
affiliation under Chapter 823; and
(3) the relationships between the person who holds a
certificate of authority and all affiliates of the person,
including subsidiary networks or other networks, are disclosed.
(b) An exemption granted under this section applies only to
registration. An entity granted an exemption is otherwise subject
to this chapter.
Sec. 1458.056. RULES CONCERNING EXEMPTIONS FROM
REGISTRATION REQUIREMENTS. The commissioner by rule:
(1) shall prescribe the form for filing for an
exemption under Section 1458.055;
(2) shall establish the time frames for filing for an
initial and renewal exemption;
(3) shall establish a reasonable fee as necessary to
administer the exemption process; and
(4) may require disclosure of any information
necessary to implement and administer Section 1458.055.
[Sections 1458.057-1458.100 reserved for expansion]
SUBCHAPTER C. RIGHTS AND RESPONSIBILITIES OF A CONTRACTING ENTITY
Sec. 1458.101. CONTRACT REQUIREMENTS. A contracting entity
may not provide a person access to health care services or
contractual discounts under a provider network contract unless the
provider network contract specifically states that:
(1) the contracting entity may contract with a third
party to provide access to the contracting entity's rights and
responsibilities under a provider network contract; and
(2) the third party must comply with all applicable
terms, limitations, and conditions of the provider network
contract.
Sec. 1458.102. DUTIES OF CONTRACTING ENTITY. (a) A
contracting entity that has granted access to health care services
and contractual discounts under a provider network contract shall:
(1) notify each provider of the identity of, and
contact information for, each third party that has or may obtain
access to the provider's health care services and contractual
discounts;
(2) disclose to each third party all relevant terms,
limitations, and conditions necessary to comply with the provider
network contract;
(3) require each third party to disclose the identity
of the contracting entity and the existence of a provider network
contract on each remittance advice or explanation of payment form;
and
(4) notify each third party of the termination of the
third party's provider network contract not later than the 30th day
after the effective date of the contract termination and require
the third party to cease making claims under the provider network
contract after the termination.
(b) The notice required under Subsection (a)(1):
(1) must be provided, at least each calendar quarter,
through:
(A) electronic mail, after provision by the
affected provider of a current electronic mail address; and
(B) posting of the information on an Internet
website; and
(2) must include a separate prominent section that
lists:
(A) each third party that the contracting entity
knows will have access to a discounted fee of the provider in the
succeeding calendar quarter; and
(B) the effective date and termination or renewal
dates, if any, of the third party's contract to access the network.
(c) The electronic mail notice described by Subsection (b)
may contain a link to an Internet web page that contains a list of
third parties that complies with this section.
Sec. 1458.103. EFFECT OF CONTRACT TERMINATION. Subject to
continuity of care requirements, agreements, or contractual
provisions:
(1) a third party may not access health care services
and contractual discounts after the date the provider network
contract terminates;
(2) claims for health care services performed after
the termination date may not be processed or paid under the provider
network contract after the termination; and
(3) claims for health care services performed before
the termination date and processed after the termination date may
be processed and paid under the provider network contract after the
date of termination.
Sec. 1458.104. OFFER FOR DIRECT CONTRACT BY CONTRACTING
ENTITY. (a) In this section, "line of business" has the meaning
assigned by commissioner rule. The term includes noninsurance
plans.
(b) Except as provided by Subsection (c), a contract between
a contracting entity and a provider may not require the provider to
consent to access to, or transfer of, the provider's name and
contracted discounted fee for use with more than one line of
business.
(c) A contracting entity may require a contract for more
than one line of business only if the provider's assent is invited
through a separate signature line for each line of business.
Sec. 1458.105. AVAILABILITY OF CODING GUIDELINES. (a) A
contract between a contracting entity and a provider must provide
that:
(1) the provider may request a description and copy of
the coding guidelines, including any underlying bundling,
recoding, or other payment process and fee schedules applicable to
specific procedures that the provider will receive under the
contract;
(2) the contracting entity or the contracting entity's
agent will provide the coding guidelines and fee schedules not
later than the 30th day after the date the contracting entity
receives the request;
(3) the contracting entity or the contracting entity's
agent will provide notice of changes to the coding guidelines and
fee schedules that will result in a change of payment to the
provider not later than the 90th day before the date the changes
take effect and will not make retroactive revisions to the coding
guidelines and fee schedules; and
(4) the contract may be terminated by the provider on
or before the 30th day after the date the provider receives
information requested under this subsection without penalty or
discrimination in participation in other health care products or
plans.
(b) A provider who receives information under Subsection
(a) may only:
(1) use or disclose the information for the purpose of
practice management, billing activities, and other business
operations; and
(2) disclose the information to a governmental agency
involved in the regulation of health care or insurance.
(c) The contracting entity shall, on request of the
provider, provide the name, edition, and model version of the
software that the contracting entity uses to determine bundling and
unbundling of claims.
(d) The provisions of this section may not be waived,
voided, or nullified by contract.
[Sections 1458.106-1458.150 reserved for expansion]
SUBCHAPTER D. RIGHTS AND RESPONSIBILITIES OF THIRD PARTY
Sec. 1458.151. THIRD-PARTY RIGHTS AND RESPONSIBILITIES.
(a) A third party that grants access to a provider's health care
services and contractual discounts to another third party must
comply with the responsibilities of a contracting entity under
Subchapters C and E.
(b) A third party that obtains access to a provider's health
care services and contractual discounts from a third party acting
as a contracting entity must comply with this subchapter.
Sec. 1458.152. DISCLOSURE BY THIRD PARTY. (a) A third
party shall disclose, to the contracting entity and providers under
the provider network contract, the identity of a person to whom the
third party grants access to the provider's health care services
and contractual discounts through an electronic notification that
complies with Section 1458.102 and includes a link to the Internet
website described by Section 1458.102(b).
(b) A third party that uses an Internet website under this
section must update the website on a quarterly basis. On request, a
contracting entity shall disclose the information by telephone or
through direct notification.
[Sections 1458.153-1458.200 reserved for expansion]
SUBCHAPTER E. UNAUTHORIZED ACCESS TO PROVIDER NETWORK CONTRACTS
Sec. 1458.201. UNAUTHORIZED ACCESS TO OR USE OF DISCOUNT.
(a) A person who knowingly accesses or uses a provider's
contractual discount under a provider network contract without a
contractual relationship established under this chapter commits an
unfair or deceptive act in the business of insurance that violates
Subchapter B, Chapter 541. The remedies available for a violation
of Subchapter B, Chapter 541, under this subsection do not include a
private cause of action under Subchapter D, Chapter 541, or a class
action under Subchapter F, Chapter 541.
(b) A contracting entity or third party must comply with the
disclosure requirements under Sections 1458.052(a)(2) or 1458.152
concerning the services listed on a remittance advice or
explanation of payment. A provider may refuse a discount taken
without a contract under this chapter or in violation of those
sections.
(c) Notwithstanding Subsection (b), an error in the
remittance advice or explanation of payment may be corrected by a
contracting entity or third party not later than the 30th day after
the date the provider notifies in writing the contracting entity or
third party of the error.
Sec. 1458.202. ACCESS TO THIRD PARTY. A contracting entity
may not provide a third party access to a provider network contract
unless the third party is:
(1) a payor or person who administers or processes
claims on behalf of the payor;
(2) a preferred provider benefit plan issuer or
preferred provider network, including a physician-hospital
organization; or
(3) a person who transports claims electronically
between the contracting entity and the payor and does not provide
access to the provider's services and discounts to any other third
party.
[Sections 1458.203-1458.250 reserved for expansion]
SUBCHAPTER F. ENFORCEMENT
Sec. 1458.251. UNFAIR CLAIM SETTLEMENT PRACTICE. (a) A
contracting entity that violates this chapter commits an unfair
claim settlement practice under Subchapter A, Chapter 542, and is
subject to sanctions under that subchapter as if the contracting
entity were an insurer.
(b) A provider who is adversely affected by a violation of
this chapter may make a complaint under Subchapter A, Chapter 542.
Sec. 1458.252. REMEDIES NOT EXCLUSIVE. The remedies
provided by this subchapter are:
(1) not exclusive; and
(2) in addition to any other remedy or procedure
provided by another law or at common law.
SECTION 2. The change in law made by this Act applies only
to a provider network contract entered into or renewed on or after
September 1, 2009. A provider network contract entered into or
renewed before September 1, 2009, 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 September 1, 2009.
* * * * *