Texas 2009 - 81st Regular

Texas Senate Bill SB714 Compare Versions

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1	1	81R2730 PB-F
2	2	By: Van de Putte S.B. No. 714
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to regulation of the secondary market in certain physician
8	8	and health care provider discounts; providing administrative
9	9	penalties.
10	10	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
11	11	SECTION 1. Subtitle D, Title 8, Insurance Code, is amended
12	12	by adding Chapter 1302 to read as follows:
13	13	CHAPTER 1302. REGULATION OF SECONDARY MARKET IN CERTAIN PHYSICIAN
14	14	AND HEALTH CARE PROVIDER DISCOUNTS
15	15	SUBCHAPTER A. GENERAL PROVISIONS
16	16	Sec. 1302.001. DEFINITIONS. In this chapter:
17	17	(1) "Discount broker" means any entity engaged, for
18	18	monetary or other consideration, in disclosing or transferring a
19	19	contracted discounted fee of a physician or health care provider.
20	20	(2) "Health care provider" means a hospital, a
21	21	physician-hospital organization, or an ambulatory surgical center.
22	22	(3) "Payor" means a fully self-insured health plan, a
23	23	health benefit plan, an insurer, or another entity that assumes the
24	24	risk for payment of claims by, or reimbursement for health care
25	25	services provided by, physicians and health care providers.
26	26	(4) "Physician" means:
27	27	(A) an individual licensed to practice medicine
28	28	in this state under the authority of Subtitle B, Title 3,
29	29	Occupations Code;
30	30	(B) a professional entity organized in
31	31	conformity with Title 7, Business Organizations Code, and
32	32	permitted to practice medicine under Subtitle B, Title 3,
33	33	Occupations Code;
34	34	(C) a partnership organized in conformity with
35	35	Title 4, Business Organizations Code, comprised entirely by
36	36	individuals licensed to practice medicine under Subtitle B, Title
37	37	3, Occupations Code;
38	38	(D) an approved nonprofit health corporation
39	39	certified under Chapter 162, Occupations Code;
40	40	(E) a medical school or medical and dental unit,
41	41	as defined or described by Section 61.003, 61.501, or 74.501,
42	42	Education Code, that employs or contracts with physicians to teach
43	43	or provide medical services or employs physicians and contracts
44	44	with physicians in a practice plan; or
45	45	(F) any other person wholly owned by individuals
46	46	licensed to practice medicine under Subtitle B, Title 3,
47	47	Occupations Code.
48	48	(5) "Transfer" means to lease, sell, aggregate,
49	49	assign, or otherwise convey a contracted discounted fee of a
50	50	physician or health care provider.
51	51	Sec. 1302.002. EXEMPTIONS. This chapter does not apply to:
52	52	(1) the activities of:
53	53	(A) a health maintenance organization's network
54	54	that are subject to Subchapter J, Chapter 843; or
55	55	(B) an insurer's preferred provider network that
56	56	are subject to Subchapters C and C-1, Chapter 1301; or
57	57	(2) any aspect of the administration or operation of:
58	58	(A) the state child health plan; or
59	59	(B) any medical assistance program using a
60	60	managed care organization or managed care principal, including the
61	61	state Medicaid managed care program under Chapter 533, Government
62	62	Code.
63	63	Sec. 1302.003. APPLICABILITY OF OTHER LAW. (a) Except as
64	64	provided by Subsection (b), with respect to payment of claims, a
65	65	discount broker, and any payor for whom a discount broker acts or
66	66	who contracts with a discount broker, shall comply with Subchapters
67	67	C and C-1, Chapter 1301, in the same manner as an insurer.
68	68	(b) This section does not apply to a payor that is a fully
69	69	self-insured health plan.
70	70	Sec. 1302.004. RETALIATION PROHIBITED. A discount broker
71	71	may not engage in any retaliatory action against a physician or
72	72	health care provider because the physician or provider has:
73	73	(1) filed a complaint against the discount broker; or
74	74	(2) appealed a decision of the discount broker.
75	75	[Sections 1302.005-1302.050 reserved for expansion]
76	76	SUBCHAPTER B. REGISTRATION; POWERS AND DUTIES OF COMMISSIONER AND
77	77	DEPARTMENT
78	78	Sec. 1302.051. REGISTRATION REQUIRED. Each discount broker
79	79	that does not hold a certificate of authority or license otherwise
80	80	issued by the department under this code must register with the
81	81	department in the manner prescribed by the commissioner before
82	82	engaging in business in this state.
83	83	Sec. 1302.052. RULES. The commissioner shall adopt rules
84	84	in the manner prescribed by Subchapter A, Chapter 36, as necessary
85	85	to implement and administer this chapter.
86	86	[Sections 1302.053-1302.100 reserved for expansion]
87	87	SUBCHAPTER C. PROHIBITION OF CERTAIN TRANSFERS;
88	88	NOTICE REQUIREMENTS
89	89	Sec. 1302.101. PROHIBITION OF CERTAIN TRANSFERS. (a) A
90	90	discount broker may not transfer a physician's or health care
91	91	provider's contracted discounted fee or any other contractual
92	92	obligation unless the transfer is authorized by a contractual
93	93	agreement that complies with this chapter.
94	94	(b) This section does not affect the authority of the
95	95	commissioner of insurance or the commissioner of workers'
96	96	compensation under this code or Title 5, Labor Code, to request and
97	97	obtain information.
98	98	Sec. 1302.102. IDENTIFICATION OF PAYORS; TERMINATION OF
99	99	CONTRACT. (a) A discount broker shall notify each physician and
100	100	health care provider of the identity of the payors and discount
101	101	brokers authorized to access a contracted discounted fee of the
102	102	physician or provider. The notice requirement under this
103	103	subsection does not apply to an employer authorized to access a
104	104	discounted fee through a discount broker.
105	105	(b) The notice required under Subsection (a) must:
106	106	(1) be provided, at least every 45 days, through:
107	107	(A) electronic mail, after provision by the
108	108	affected physician or health care provider of a current electronic
109	109	mail address; and
110	110	(B) posting of a list on a secure Internet
111	111	website; and
112	112	(2) include a separate prominent section that lists
113	113	the payors that the discount broker knows will have access to a
114	114	discounted fee of the physician or health care provider in the
115	115	succeeding 45-day period.
116	116	(b-1) Notwithstanding Subsection (b), and on the request of
117	117	the affected physician or health care provider, the notice required
118	118	under Subsection (a) may be provided through United States mail.
119	119	This subsection expires September 1, 2011.
120	120	(c) The identity of a payor or discount broker authorized to
121	121	access a contracted discounted fee of the physician or provider
122	122	that becomes known to the discount broker required to submit the
123	123	notice under Subsection (a) must be included in the subsequent
124	124	notice.
125	125	(d) If, after receipt of the notice required under
126	126	Subsection (a), a physician or health care provider objects to the
127	127	addition of a payor to access to a discounted fee, other than a
128	128	payor that is an employer or a discount broker listed in the notice
129	129	required under Subsection (a), the physician or health care
130	130	provider may terminate its contract by providing written notice to
131	131	the discount broker not later than the 30th day after the date on
132	132	which the physician or health care provider receives the notice
133	133	required under Subsection (a). Termination of a contract under
134	134	this subsection is subject to applicable continuity of care
135	135	requirements under Section 843.362 and Subchapter D, Chapter 1301.
136	136	[Sections 1302.103-1302.150 reserved for expansion]
137	137	SUBCHAPTER D. RESTRICTIONS ON TRANSFERS
138	138	Sec. 1302.151. RESTRICTIONS ON TRANSFERS; EXCEPTION. (a)
139	139	In this section, "line of business" includes noninsurance plans,
140	140	fully self-insured health plans, Medicare Advantage plans, and
141	141	personal injury protection under an automobile insurance policy.
142	142	(b) A contract between a discount broker and a physician or
143	143	health care provider may not require the physician or health care
144	144	provider to:
145	145	(1) consent to the disclosure or transfer of the
146	146	physician's or health care provider's name and a contracted
147	147	discounted fee for use with more than one line of business;
148	148	(2) accept all insurance products; or
149	149	(3) consent to the disclosure or transfer of the
150	150	physician's or health care provider's name and access to a
151	151	contracted discounted fee of the physician or provider in a chain of
152	152	transfers that exceeds two transfers.
153	153	(c) Notwithstanding Subsection (b)(2), a contract between a
154	154	discount broker and a physician or health care provider may require
155	155	the physician or health care provider to accept all insurance
156	156	products within a line of business covered by the contract.
157	157	[Sections 1302.152-1302.199 reserved for expansion]
158	158	SUBCHAPTER E. DISCLOSURE REQUIREMENTS
159	159	Sec. 1302.200. IMPLEMENTATION. (a) This subchapter takes
160	160	effect January 1, 2010.
161	161	(b) This section expires January 2, 2010.
162	162	Sec. 1302.201. IDENTIFICATION OF DISCOUNT BROKER. An
163	163	explanation of payment or remittance advice in an electronic or
164	164	paper format must include the identity of the discount broker
165	165	authorized to disclose or transfer the name and associated
166	166	discounts of a physician or health care provider.
167	167	Sec. 1302.202. IDENTIFICATION OF ENTITY ASSUMING FINANCIAL
168	168	RISK; DISCOUNT BROKER. A payor or representative of a payor that
169	169	processes claims or claims payments must clearly identify in an
170	170	electronic or paper format on the explanation of payment or
171	171	remittance advice the identity of:
172	172	(1) the payor that assumes the risk for payment of
173	173	claims or reimbursement for services; and
174	174	(2) the discount broker through which the payment rate
175	175	and any discount are claimed.
176	176	Sec. 1302.203. INFORMATION ON IDENTIFICATION CARDS. If a
177	177	discount broker or payor issues member or subscriber identification
178	178	cards, the identification cards must identify, in a clear and
179	179	legible manner, any third-party entity, including any discount
180	180	broker:
181	181	(1) who is responsible for paying claims; and
182	182	(2) through whom the payment rate and any discount are
183	183	claimed.
184	184	[Sections 1302.204-1302.250 reserved for expansion]
185	185	SUBCHAPTER F. ENFORCEMENT
186	186	Sec. 1302.251. PENALTIES. (a) A discount broker who holds a
187	187	certificate of authority or license under this code and who
188	188	violates this chapter:
189	189	(1) commits an unfair settlement practice in violation
190	190	of Chapter 541;
191	191	(2) commits an unfair claim settlement practice in
192	192	violation of Subchapter A, Chapter 542; and
193	193	(3) is subject to administrative penalties in the
194	194	manner prescribed by Chapters 82 and 84.
195	195	(b) A violation of this chapter by a discount broker who
196	196	does not hold a certificate of authority or license under this code
197	197	constitutes a violation of Subchapter E, Chapter 17, Business &
198	198	Commerce Code.
199	199	Sec. 1302.252. PRIVATE CAUSE OF ACTION. An affected
200	200	physician or health care provider may bring a private action for
201	201	damages in the manner prescribed by Subchapter D, Chapter 541,
202	202	against a discount broker who violates this chapter.
203	203	SECTION 2. Sections 1301.001(4) and (6), Insurance Code,
204	204	are amended to read as follows:
205	205	(4) "Institutional provider" means a hospital,
206	206	nursing home, or other medical or health-related service facility
207	207	that provides care for the sick or injured or other care that may be
208	208	covered in a health insurance policy. The term includes an
209	209	ambulatory surgical center.
210	210	(6) "Physician" means:
211	211	(A) an individual [a person] licensed to practice
212	212	medicine in this state under the authority of Title 3, Subtitle B,
213	213	Occupations Code;
214	214	(B) a professional entity organized in
215	215	conformity with Title 7, Business Organizations Code, and
216	216	permitted to practice medicine under Subtitle B, Title 3,
217	217	Occupations Code;
218	218	(C) a partnership organized in conformity with
219	219	Title 4, Business Organizations Code, comprised entirely by
220	220	individuals licensed to practice medicine under Subtitle B, Title
221	221	3, Occupations Code;
222	222	(D) an approved nonprofit health corporation
223	223	certified under Chapter 162, Occupations Code;
224	224	(E) a medical school or medical and dental unit,
225	225	as defined or described by Section 61.003, 61.501, or 74.501,
226	226	Education Code, that employs or contracts with physicians to teach
227	227	or provide medical services or employs physicians and contracts
228	228	with physicians in a practice plan; or
229	229	(F) any other person wholly owned by individuals
230	230	licensed to practice medicine under Subtitle B, Title 3,
231	231	Occupations Code.
232	232	SECTION 3. Section 1301.056, Insurance Code, is amended to
233	233	read as follows:
234	234	Sec. 1301.056. RESTRICTIONS ON PAYMENT AND REIMBURSEMENT.
235	235	(a) An insurer, [or] third-party administrator, or other entity may
236	236	not reimburse a physician or other practitioner, institutional
237	237	provider, or organization of physicians and health care providers
238	238	on a discounted fee basis for covered services that are provided to
239	239	an insured unless:
240	240	(1) the insurer, [or] third-party administrator, or
241	241	other entity has contracted with either:
242	242	(A) the physician or other practitioner,
243	243	institutional provider, or organization of physicians and health
244	244	care providers; or
245	245	(B) a preferred provider organization that has a
246	246	network of preferred providers and that has contracted with the
247	247	physician or other practitioner, institutional provider, or
248	248	organization of physicians and health care providers;
249	249	(2) the physician or other practitioner,
250	250	institutional provider, or organization of physicians and health
251	251	care providers has agreed to the contract and has agreed to provide
252	252	health care services under the terms of the contract; and
253	253	(3) the insurer, [or] third-party administrator, or
254	254	other entity has agreed to provide coverage for those health care
255	255	services under the health insurance policy.
256	256	(b) A party to a preferred provider contract, including a
257	257	contract with a preferred provider organization, may not sell,
258	258	lease, assign, aggregate, disclose, or otherwise transfer the
259	259	discounted fee, or any other information regarding the discount,
260	260	payment, or reimbursement terms of the contract without the express
261	261	authority of and [prior] adequate notification to the other
262	262	contracting parties. This subsection does not:
263	263	(1) prohibit a payor from disclosing any information,
264	264	including fees, to an insured; or
265	265	(2) affect the authority of the commissioner of
266	266	insurance or the commissioner of workers' compensation under this
267	267	code or Title 5, Labor Code, to request and obtain information.
268	268	(c) An insurer, third-party administrator, or other entity
269	269	may not access a discounted fee, other than through a direct
270	270	contract, unless notice has been provided to the contracted
271	271	physicians, practitioners, institutional providers, and
272	272	organizations of physicians and health care providers. For the
273	273	purposes of the notice requirements of this subsection, the term
274	274	"other entity" does not include an employer that contracts with an
275	275	insurer or third-party administrator.
276	276	(d) The notice required under Subsection (c) must:
277	277	(1) be provided, at least every 45 days, through:
278	278	(A) electronic mail, after provision by the
279	279	affected physician or health care provider of a current electronic
280	280	mail address; and
281	281	(B) posting of a list on a secure Internet
282	282	website; and
283	283	(2) include a separate prominent section that lists
284	284	the insurers, third-party administrators, or other entities that
285	285	the contracting party knows will have access to a discounted fee of
286	286	the physician or health care provider in the succeeding 45-day
287	287	period.
288	288	(d-1) Notwithstanding Subsection (d), and on the request of
289	289	the affected physician or health care provider, the notice required
290	290	under Subsection (c) may be provided through United States mail.
291	291	This subsection expires September 1, 2011.
292	292	(e) The identity of an insurer, third-party administrator,
293	293	or other entity authorized to access a contracted discounted fee of
294	294	the physician or provider that becomes known to the contracting
295	295	party required to submit the notice under Subsection (c) must be
296	296	included in the subsequent notice.
297	297	(f) If, after receipt of the notice required under
298	298	Subsection (c), a physician or other practitioner, institutional
299	299	provider, or organization of physicians and health care providers
300	300	objects to the addition of an insurer, third-party administrator,
301	301	or other entity to access to a discounted fee, the physician or
302	302	other practitioner, institutional provider, or organization of
303	303	physicians and health care providers may terminate its contract by
304	304	providing written notice to the contracting party not later than
305	305	the 30th day after the date of the receipt of the notice required
306	306	under Subsection (c).
307	307	(g) An insurer, third-party administrator, or other entity
308	308	that processes claims or claims payments shall clearly identify in
309	309	an electronic or paper format on the explanation of payment or
310	310	remittance advice:
311	311	(1) the identity of the party responsible for
312	312	administering the claims; and
313	313	(2) if the insurer, third-party administrator, or
314	314	other entity does not have a direct contract with the physician or
315	315	other practitioner, institutional provider, or organization of
316	316	physicians and health care providers, the identity of the preferred
317	317	provider organization or other contracting party that authorized a
318	318	discounted fee.
319	319	(h) If an insurer, third-party administrator, or other
320	320	entity issues member or insured identification cards, the
321	321	identification cards must include, in a clear and legible format,
322	322	the information required under Subsection (g).
323	323	(i) An insurer, [or] third-party administrator, or other
324	324	entity that holds a certificate of authority or license under this
325	325	code who violates this section:
326	326	(1) commits an unfair settlement practice in violation
327	327	of Chapter 541;
328	328	(2) commits an unfair claim settlement practice in
329	329	violation of Subchapter A, Chapter 542; and
330	330	(3) [(2)] is subject to administrative penalties
331	331	under Chapters 82 and 84.
332	332	(j) A violation of this section by an entity described by
333	333	this section who does not hold a certificate of authority or license
334	334	issued under this code constitutes a violation of Subchapter E,
335	335	Chapter 17, Business & Commerce Code.
336	336	(k) A physician or health care provider affected by a
337	337	violation of this section may bring a private action for damages in
338	338	the manner prescribed by Subchapter D, Chapter 541, against a
339	339	discount broker who violates this section.
340	340	SECTION 4. The change in law made by this Act applies only
341	341	to a cause of action that accrues on or after the effective date of
342	342	this Act. A cause of action that accrues before that date is
343	343	governed by the law as it existed immediately before the effective
344	344	date of this Act, and that law is continued in effect for that
345	345	purpose.
346	346	SECTION 5. The commissioner of insurance shall adopt rules
347	347	as necessary to implement Chapter 1302, Insurance Code, as added by
348	348	this Act, not later than December 1, 2009.
349	349	SECTION 6. This Act applies only to a contract entered into
350	350	or renewed on or after January 1, 2010. A contract entered into or
351	351	renewed before January 1, 2010, is governed by the law as it existed
352	352	immediately before the effective date of this Act, and that law is
353	353	continued in effect for that purpose.
354	354	SECTION 7. This Act takes effect September 1, 2009.