By: Bonnen of Galveston H.B. No. 3727
A BILL TO BE ENTITLED
AN ACT
relating to the provision of health care payment information and
related information for health care services, supplies, and
procedures; authorizing enforcement and penalties.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subtitle F, Title 8, Insurance Code, is amended
by adding Chapter 1470 to read as follows:
CHAPTER 1470. DISCLOSURE OF PAYMENT AND COMPENSATION
METHODOLOGY
Sec. 1470.001. DEFINITIONS. In this chapter, unless the
context otherwise requires:
(1) "Edit" means a practice or procedure under which
an adjustme
nt is made regarding procedure codes that results in:
(A) payment for some, but not all, of the health
care procedures performed under a procedure code;
(B) payment made under a different procedure
code;
(C) a reduced payment as a result of services
provided to a patient that are claimed under more than one procedure
code on the same service date;
(D) a reduced payment related to a modifier used
with a procedure code; or
(E) a reduced payment based on multiple units of
the same procedure code billed for a single date of service.
(2) "Health benefit plan issuer" means:
(A) an insurance company, association,
organization, group hospital service corporation, health
maintenance organization, or pharmacy benefit manager that
delivers or issues for delivery an individual, group, blanket, or
franchise insurance policy or insurance agreement, a group hospital
service contract, or an evidence of coverage that provides health
insurance or health care benefits and includes:
(i) a life, health, or accident insurance
company operating under Chapter 841 or 982;
(ii) a general casualty insurance company
operating under Chapter 861;
(iii) a fraternal benefit society operating
under Chapter 885;
(iv) a mutual life insurance company
operating under Chapter 882;
(v) a local mutual aid association
operating under Chapter 886;
(vi) a statewide mutual assessment company
operating under Chapter 881;
(vii) a mutual assessment company or mutual
assessment life, health, and accident association operating under
Chapter 887;
(viii) a mutual insurance company operating
under Chapter 883 that writes coverage other than life insurance;
(ix) a Lloyd's plan operating under Chapter
941;
(x) a reciprocal exchange operating under
Chapter 942;
(xi) a stipulated premium insurance company
operating under Chapter 884;
(xii) an exchange operating under Chapter
942;
(xiii) a Medicare supplemental policy as
defined by Section 1882(g)(1), Social Security Act (42 U.S.C.
Section 1395ss(g)(1);
(xiv) a Medicaid managed care program
operated under Chapter 533, Government Code;
(xv) a health maintenance organization
operating under Chapter 843;
(xvi) a multiple employer welfare
arrangement that holds a certificate of authority under Chapter
846; and
(xvii) an approved nonprofit health
corporation that holds a certificate of authority under Chapter
844;
(B) the state Medicaid program operated under
Chapter 32, Human Resources Code, or the state child health plan or
health benefits plan for children under Chapter 62 or 63, Health and
Safety Code;
(C) the Employees Retirement System of Texas or
another entity issuing or administering a basic coverage plan under
Chapter 1551;
(D) the Teacher Retirement System of Texas or
another entity issuing or administering a basic plan under Chapter
1575 or a primary care coverage plan under Chapter 1579;
(E) The Texas A&M University System or The
University of Texas System or another entity issuing or
administering basic coverage under Chapter 1601; and
(F) an entity issuing or administering medical
benefits provided under a workers' compensation insurance policy or
otherwise under Title 5, Labor Code.
(3) "Health care contract" means a contract entered
into or renewed between a health care contractor and a physician or
health care provider for the delivery of health care services to
others.
(4) "Health care contractor" means an individual or
entity that has as a business purpose contracting with physicians
or health care providers for the delivery of health care services.
The term includes a health benefit plan issuer, an administrator
regulated under Chapter 4151, and a pharmacy benefit manager that
administers or manages prescription drug benefits.
(5) "Health care provider" means an individual or
entity that furnishes goods or services under a license,
certificate, registration, or other authority issued by this state
to diagnose, prevent, alleviate, or cure a human illness or injury.
The term includes a physician or a hospital or other health care
facility.
(6) "Physician" means:
(A) an individual licensed to engage in the
practice of medicine in this state; or
(B) an entity organized under Subchapter B,
Chapter 162, Occupations Code.
(7) "Procedure code" means an alphanumeric code used
to identify a specific health procedure performed by a health care
provider. The term includes:
(A) the American Medical Association's Current
Procedural Terminology code, also known as the "CPT code";
(B) the Centers for Medicare and Medicaid
Services Health Care Common Procedure Coding System; and
(C) other analogous codes published by national
organizations and recognized by the commissioner.
Sec. 1470.002. DEFINITION OF MATERIAL CHANGE. For purposes
of this chapter, "material change" means a change to a contract that
decreases the health care provider's payment or compensation.
Sec. 1470.003. APPLICABILITY OF CHAPTER. This chapter does
not apply to an employment contract or arrangement between health
care providers.
Sec. 1470.004. RULEMAKING AUTHORITY. The commissioner may
adopt reasonable rules as necessary to implement the purposes and
provisions of this chapter.
Sec. 1470.005. REQUIRED DISCLOSURE OF PAYMENT AND
COMPENSATION TERMS. (a) Each health care contract must include a
disclosure form that states, in plain language, payment and
compensation terms for the provision of health care services,
supplies or procedures. The form must include information
sufficient for a health care provider to determine the compensation
or payment for the provider's services.
(b) The disclosure form under Subsection (a) must include:
(1) the manner of payment, such as fee-for-service,
capitation, or risk sharing;
(2) the methodology used to compute any fee schedule,
such as the use of a relative value unit system and conversion
factor, percentage of Medicare payment system, or percentage of
billed charges;
(3) the fee schedule for procedure codes reasonably
expected to be billed by the health care provider for services
provided under the contract and, on request, the fee schedule for
other procedure codes used by, or that may be used by, the health
care provider; and
(4) the effect of edits, if any, on payment or
compensation.
(c) As applicable, the methodology disclosure under
Subsection (b)(2) must include:
(1) the name of any relative value system used;
(2) the version, edition, or publication date of that
system;
(3) any applicable conversion or geographic factors;
and
(4) the date by which compensation or fee schedules
may be changed by the methodology, if allowed under the contract.
(d) The fee schedule described by Subsection (b)(3) must
include, as applicable, service or procedure codes and the
associated payment or compensation for each code. The fee schedule
may be provided electronically.
(e) A health care contractor shall provide the fee schedule
described by Subsection (b)(3) to an affected health care provider
when a material change related to payment or compensation occurs.
Additionally, a health care provider may request that a written fee
schedule be provided up to twice annually, and the health care
contractor must provide the written fee schedule within 10 business
days.
(f) A health care contractor may satisfy the requirement
under Subsection (b)(4) regarding the effect of edits by providing
a clearly understandable, readily available mechanism that allows a
health care provider to determine the effect of an edit on payment
or compensation before a service is provided or a claim is
submitted.
Sec. 1470.006. ENFORCEMENT. (a) The commissioner shall
adopt rules as necessary to enforce the provisions of this chapter,
including the imposition of administrative penalties.
(b) A violation of Section 1470.005 is a deceptive act or
practice in insurance under Subchapter B, Chapter 541.
SECTION 2. Chapter 1470, Insurance Code, as added by this
Act, applies only to a health care contract that is entered into or
renewed on or after January 1, 2016. A health care contract entered
into before January 1, 2014, 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, 2015.