Texas 2015 - 84th Regular

Texas House Bill HB616 Compare Versions

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

Old	New	Differences
1	1	84R2120 SCL-D
2	2	By: Bonnen of Galveston H.B. No. 616
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to payment of and disclosures related to certain
8	8	out-of-network provider charges; authorizing a fee; providing a
9	9	penalty.
10	10	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
11	11	SECTION 1. Chapter 1301, Insurance Code, is amended by
12	12	adding Subchapter C-2 to read as follows:
13	13	SUBCHAPTER C-2. PAYMENT OF OUT-OF-NETWORK PROVIDER CHARGES
14	14	Sec. 1301.141. DEFINITIONS. In this subchapter:
15	15	(1) "Clean claim" has the meaning assigned by Section
16	16	1301.101.
17	17	(2) "Database provider" means a database provider
18	18	certified by the department under Section 1301.1424.
19	19	(3) "Designated reimbursement information
20	20	organization" means an organization designated by the commissioner
21	21	under Section 1301.1426.
22	22	(4) "Geozip area" means an area that includes all zip
23	23	codes with the identical first three digits. For purposes of this
24	24	term, the geozip area is the closest geozip area to the location in
25	25	which the health care service was performed if the location does not
26	26	have a zip code.
27	27	(5) "Out-of-network provider," with respect to a
28	28	preferred provider benefit plan, means a physician or health care
29	29	provider that is not a preferred provider of the plan.
30	30	(6) "Purchaser" means an insured under a preferred
31	31	provider benefit plan, regardless of whether the insured pays any
32	32	part of the insured's premium, and a sponsor of the preferred
33	33	provider benefit plan, regardless of whether the sponsor pays any
34	34	part of an insured's premium.
35	35	(7) "Usual and customary charge" means a charge for a
36	36	service, classified by geozip area and Current Procedural
37	37	Terminology code, that is in the 90th percentile of the charges for
38	38	that service reported to a database provider.
39	39	Sec. 1301.1414. APPLICABILITY OF SUBCHAPTER. This
40	40	subchapter applies only to an insurer providing a preferred
41	41	provider benefit plan that provides benefits for services provided
42	42	by out-of-network providers.
43	43	Sec. 1301.1415. PAYMENT OF CERTAIN OUT-OF-NETWORK
44	44	PROVIDERS. (a) An insurer must use a charge-based methodology that
45	45	complies with this subchapter for computing a payment for a service
46	46	provided by an out-of-network provider if the provider submits a
47	47	clean claim for payment that includes:
48	48	(1) a certification of the usual and customary charge
49	49	for the service determined by a database provider selected by the
50	50	out-of-network provider; or
51	51	(2) a certification by a database provider selected by
52	52	the out-of-network provider that there are not sufficient reported
53	53	charges in the database provider's database to establish the usual
54	54	and customary charge for the service.
55	55	(b) If an out-of-network provider submits a clean claim for
56	56	payment of a charge that includes a certification from a database
57	57	provider selected by the out-of-network provider indicating that
58	58	the billed charge is not higher than the usual and customary charge,
59	59	the insurer shall pay the lesser of the billed charge or the usual
60	60	and customary charge minus any portion of the charge that is the
61	61	insured's responsibility under the preferred provider benefit
62	62	plan.
63	63	(c) If an out-of-network provider submits a clean claim for
64	64	payment of a charge that includes a certification from a database
65	65	provider selected by the out-of-network provider indicating that
66	66	the billed charge is higher than the usual and customary charge, the
67	67	insurer shall pay the billed charge minus any portion of the charge
68	68	that is the insured's responsibility under the preferred provider
69	69	benefit plan if the billed charge is justifiable considering
70	70	special circumstances under which the services are provided. If
71	71	the charge is not justifiable considering special circumstances
72	72	under which the services are provided, the insurer shall pay the
73	73	usual and customary charge minus any portion of the charge that is
74	74	the insured's responsibility under the preferred provider benefit
75	75	plan.
76	76	(d) If an out-of-network provider submits a clean claim for
77	77	payment of a charge that includes a certification described by
78	78	Subsection (a)(2) with respect to a billed charge, the insurer
79	79	shall pay 80 percent of the billed charge or an amount equal to the
80	80	90th percentile of the charges for the service reported by the
81	81	designated reimbursement information organization for physicians
82	82	or health care providers in the same geozip area, whichever is less,
83	83	minus any portion of the charge that is the insured's
84	84	responsibility under the preferred provider benefit plan.
85	85	(e) An insurer may not pay less than an applicable amount
86	86	required under this section because the insurer has not received a
87	87	portion of the charge that is the insured's responsibility.
88	88	Sec. 1301.1416. PROMPT PAYMENT OF CERTAIN CHARGES. If an
89	89	out-of-network provider submits to an insurer a clean claim for
90	90	payment of a charge that includes a statement from the provider
91	91	indicating that the provider is willing to accept a payment for the
92	92	service, classified by geozip area and Current Procedural
93	93	Terminology code, that is in the 85th percentile of the charges for
94	94	that service reported to a database provider selected by the
95	95	out-of-network provider and the claim for payment is otherwise made
96	96	in accordance with Subchapter C, the claim must be paid in
97	97	accordance with Subchapter C as if the physician or health care
98	98	provider was a preferred provider.
99	99	Sec. 1301.142. REQUIRED CONTRACT TERMS. The language used
100	100	in the health insurance policy to describe the benefit provided
101	101	under the preferred provider benefit plan for services provided by
102	102	an out-of-network provider:
103	103	(1) must:
104	104	(A) provide that, if a certification described by
105	105	Section 1301.1415(a)(2) with respect to the charge is submitted
106	106	with the claim, payment to an out-of-network provider will be
107	107	computed based on 80 percent of the billed charge or an amount equal
108	108	to the 90th percentile of the charges for the service reported by
109	109	the designated reimbursement information organization for
110	110	physicians or health care providers in the same geozip area,
111	111	whichever is less;
112	112	(B) define "usual and customary charge" as that
113	113	term is defined by Section 1301.141; and
114	114	(C) incorporate into the definition of "usual and
115	115	customary charge" the definition of "database provider" assigned by
116	116	Section 1301.141; and
117	117	(2) may not add or subtract language from a definition
118	118	required by this section.
119	119	Sec. 1301.1424. CERTIFICATION AND QUALIFICATIONS OF
120	120	DATABASE PROVIDER AND DATABASE. (a) A database provider that is
121	121	used to determine usual and customary charges for the purposes of
122	122	this subchapter must be certified by the department. The
123	123	department may certify a database provider under this subchapter
124	124	only if the department determines that the database provider and
125	125	the database used by the provider for the purposes of this
126	126	subchapter comply with this section.
127	127	(b) A database provider must be a nonprofit organization
128	128	that:
129	129	(1) maintains a database with content that complies
130	130	with this section;
131	131	(2) maintains an active Internet website accessible to
132	132	all physicians or health care providers subscribing to the database
133	133	and to the public; and
134	134	(3) demonstrates an ability to:
135	135	(A) maintain a compilation of charge data that is
136	136	absent any data required to be excluded under Subsection (e)(1);
137	137	and
138	138	(B) distinguish charges that are not related to
139	139	one another and eliminate irrelevant or erroneous charges from
140	140	reported charge information.
141	141	(c) A database provider must compute usual and customary
142	142	charges for services provided by physicians or health care
143	143	providers in accordance with this subchapter.
144	144	(d) The data in the database must contain out-of-network
145	145	charges, classified by Current Procedural Terminology code, for
146	146	physician and health care providers in each geozip area in this
147	147	state.
148	148	(e) The data in the database may not:
149	149	(1) include:
150	150	(A) any data other than out-of-network billed
151	151	charges from physicians and health care providers in this state;
152	152	(B) physician and health care provider charges
153	153	that reflect payments discounted under governmental or
154	154	nongovernmental health benefit plans; or
155	155	(C) information that is more than seven years
156	156	old; or
157	157	(2) exclude charges accompanied by modifiers that
158	158	indicate procedures with complications.
159	159	(f) An entity may not be certified as a database provider
160	160	for the purposes of this subchapter if the entity owns or controls,
161	161	or is owned or controlled by, or is an affiliate of, any entity with
162	162	a pecuniary interest in the application of the database, including
163	163	an insurer, a holding company of an insurer, or a trade association
164	164	in the field of insurance or health benefits.
165	165	(g) The Internet website required by this section must allow
166	166	an individual to determine the usual and customary charge for a
167	167	particular service provided by a physician or health care provider.
168	168	(h) The department shall ensure that:
169	169	(1) the data in the database used to compute usual and
170	170	customary charges of out-of-network providers is updated regularly
171	171	to accurately reflect current physician and health care provider
172	172	retail charges;
173	173	(2) charge information that is more than seven years
174	174	old is removed from the database; and
175	175	(3) at least one entity is certified as a database
176	176	provider.
177	177	(i) The department may charge a fee for certification under
178	178	this section in an amount necessary to implement this section.
179	179	Sec. 1301.1425. PROVISION OF USUAL AND CUSTOMARY CHARGE BY
180	180	DATABASE PROVIDER. A database provider must compute the usual and
181	181	customary charge for each service for which a billed charge is
182	182	submitted to the insurer by a physician or health care provider that
183	183	subscribes to the database and provide the physician or health care
184	184	provider with a certification of the usual and customary charge or a
185	185	certification described by Section 1301.1415(a)(2), as applicable,
186	186	that is sufficient to enable an insurer to whom the physician or
187	187	health care provider submits a claim for payment to comply with this
188	188	subchapter.
189	189	Sec. 1301.1426. DESIGNATED REIMBURSEMENT INFORMATION
190	190	ORGANIZATION. (a) The commissioner by rule shall designate an
191	191	organization described by this section to report charges for
192	192	services provided by physicians and health care providers under
193	193	this subchapter.
194	194	(b) The organization designated under this section must be
195	195	an independent, not-for-profit organization created to:
196	196	(1) establish and maintain a database to help insurers
197	197	determine reimbursement rates for out-of-network charges; and
198	198	(2) provide insureds with a clear, unbiased
199	199	explanation of the reimbursement process.
200	200	Sec. 1301.143. DISCLOSURES REGARDING PAYMENT OF
201	201	OUT-OF-NETWORK PROVIDER. (a) An insurer that provides benefits
202	202	under a preferred provider benefit plan for services provided by
203	203	out-of-network providers must disclose in the summary plan
204	204	description, on an Internet website maintained by the insurer, and
205	205	to a prospective purchaser of the plan:
206	206	(1) the definition of "usual and customary charge"
207	207	assigned by Section 1301.141 and a description of how payment to an
208	208	out-of-network provider will, if applicable, be based on the lesser
209	209	of:
210	210	(A) the usual and customary charge for the
211	211	specific procedure that a physician or health care provider bills
212	212	the insurer; or
213	213	(B) 80 percent of the billed charge or an amount
214	214	equal to the 90th percentile of the charges for the service reported
215	215	by the designated reimbursement information organization for
216	216	physicians and health care providers in the same geozip area;
217	217	(2) examples of the anticipated portion of the charge
218	218	that will be the insured's responsibility for frequently billed
219	219	health care services by out-of-network providers;
220	220	(3) a methodology for determining the anticipated
221	221	portion of the charge that will be the insured's responsibility for
222	222	a specific health care service that is based on the amount, not an
223	223	approximation, that the insurer pays;
224	224	(4) the Internet website addresses of each database
225	225	provider certified under this subchapter at which a purchaser or
226	226	prospective purchaser may access the database or a single website
227	227	address at which an updated set of links to the website addresses of
228	228	those database providers may be accessed; and
229	229	(5) a statement that if the insurer's payment due under
230	230	the plan's out-of-network benefit provisions is not sufficient to
231	231	cover the total billed charge, the physician or health care
232	232	provider agrees to accept as payment in full the amount paid by the
233	233	plan in accordance with those provisions plus any portion of the
234	234	charge that is the insured's responsibility under the plan.
235	235	(b) Disclosures under this section must:
236	236	(1) be made in language easily understood by
237	237	purchasers and prospective purchasers of preferred provider
238	238	benefit plans;
239	239	(2) be made in a uniform, clearly organized manner;
240	240	(3) be of sufficient detail and comprehensiveness as
241	241	to provide for full and fair disclosure; and
242	242	(4) be updated as necessary to ensure that the
243	243	disclosures are accurate.
244	244	Sec. 1301.1434. ANNUAL ACTUARIAL CERTIFICATION. (a) An
245	245	insurer that offers a preferred provider benefit plan that provides
246	246	coverage for services provided by out-of-network providers must
247	247	annually submit to the department a written certification stating:
248	248	(1) the difference in value for a purchaser between:
249	249	(A) the coverage without the out-of-network
250	250	provider benefits; and
251	251	(B) the coverage with the out-of-network
252	252	provider benefits; and
253	253	(2) that the difference between the amount a purchaser
254	254	would be charged for the coverage without the out-of-network
255	255	provider benefits and the amount that a purchaser would be charged
256	256	for the coverage with the out-of-network provider benefits reflects
257	257	the difference in value certified under Subdivision (1).
258	258	(b) The certification must be made in easily understood
259	259	language, in a uniform, clearly organized manner, and be of
260	260	sufficient detail and comprehensiveness as to provide for full and
261	261	fair disclosure to an average consumer. The difference between the
262	262	value of the coverage without the out-of-network provider benefits
263	263	and the coverage with the out-of-network provider benefits must be
264	264	expressed in terms of a percentage, although use of a percentage
265	265	alone is not sufficient to satisfy the requirements of this
266	266	section.
267	267	(c) The certification must be made by an actuary who is
268	268	certified by a nationally recognized actuarial certification
269	269	organization recognized by the commissioner and who is not
270	270	affiliated with the insurer or any of the insurer's affiliates.
271	271	(d) An insurer must make the certification required by this
272	272	section readily available to the public.
273	273	Sec. 1301.1435. PAYMENT IN FULL. If the insurer's payment
274	274	due under a preferred provider benefit plan's out-of-network
275	275	benefit provisions is not sufficient to cover the total billed
276	276	charge, a physician or health care provider agrees to accept as
277	277	payment in full the amount paid by the plan in accordance with those
278	278	provisions plus any portion of the charge that is the insured's
279	279	responsibility under the plan.
280	280	Sec. 1301.1436. REMEDIES. (a) An insurer that violates
281	281	Section 1301.1416 is subject to the penalties imposed under Section
282	282	1301.137 as if the out-of-network provider was a preferred
283	283	provider.
284	284	(b) The remedies provided by this section are in addition to
285	285	remedies available under any other provision of this code.
286	286	SECTION 2. Subchapter C-2, Chapter 1301, Insurance Code, as
287	287	added by this Act, applies only to charges for services provided to
288	288	an insured under a health insurance policy delivered, issued for
289	289	delivery, or renewed on or after January 1, 2016. Charges for
290	290	services provided to an insured under a policy delivered, issued
291	291	for delivery, or renewed before January 1, 2016, are governed by the
292	292	law in effect immediately before the effective date of this Act, and
293	293	that law is continued in effect for that purpose.
294	294	SECTION 3. This Act takes effect September 1, 2015.