By: Bonnen of Galveston H.B. No. 4016
A BILL TO BE ENTITLED
AN ACT
relating to payment of and disclosures related to certain
out-of-network provider charges; providing a penalty.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Chapter 1301, Insurance Code, is amended by
adding Subchapter C-2 to read as follows:
SUBCHAPTER C-2. PAYMENT OF OUT-OF-NETWORK PROVIDER CHARGES
Sec. 1301.141. DEFINITIONS. In this subchapter:
(1) "Geozip area" means an area that includes all zip
codes with the identical first three digits. For purposes of this
term, the geozip area is the closest geozip area to the location in
which the health care service was performed if the location does not
have a zip code.
(2) "Out-of-network provider," with respect to a
preferred provider benefit plan, means a physician or health care
provider that is not a preferred provider of the plan.
(3) "Usual and customary charge" means 135% of the
highest allowed charge for a service, classified by geozip area and
Current Procedural Terminology code.
Sec. 1301.1414. APPLICABILITY OF SUBCHAPTER. (a) This
subchapter applies only to an insurer providing a preferred
provider benefit plan that provides benefits for services provided
by out-of-network providers.
(b) This subchapter does not apply to:
(1) the Employees Retirement System of Texas or
another entity issuing or administering a basic coverage plan under
Chapter 1551;
(2) the Teacher Retirement System of Texas or another
entity issuing or administering a basic plan under Chapter 1575 or a
health coverage plan under Chapter 1579; and
(3) The Texas A&M University System or The University
of Texas System or another entity issuing or administering basic
coverage under Chapter 1601.
Sec. 1301.1415. PAYMENT OF CERTAIN OUT-OF-NETWORK
PROVIDERS. (a) If an out-of-network provider submits to an insurer
a claim for payment of a charge that is less than or equal to the
usual and customary charge for the service provided and includes an
election by the out-of-network provider to participate in this
subchapter, the insurer shall pay the charge minus any portion of
the charge that is the insured's responsibility under the preferred
provider benefit plan.
(b) An insurer may not pay less than the amount the insurer
is required to pay under this section because the insurer has not
received a portion of the charge that is the insured's
responsibility.
Sec. 1301.1416. PROMPT PAYMENT OF CERTAIN CLAIMS. If an
out-of-network provider submits to an insurer a claim described by
Section 1301.1415, the insurer shall pay the claim in accordance
with Subchapter C as if the physician or health care provider were a
preferred provider.
Sec. 1301.142. DISCLOSURES REGARDING PAYMENT OF
OUT-OF-NETWORK PROVIDER. (a) An insurer that provides benefits
under a preferred provider benefit plan for services provided by
out-of-network providers must disclose in the summary plan
description, on an Internet website maintained by the insurer, and
to a prospective purchaser of the plan:
(1) the definition of "usual and customary charge"
assigned by Section 1301.141;
(2) examples of the anticipated portion of the charge
that will be the insured's responsibility for frequently billed
health care services by out-of-network providers; and
(3) a methodology for determining the anticipated
portion of the charge that will be the insured's responsibility for
a specific health care service that is based on the amount, not an
approximation, that the insurer pays.
(b) Disclosures under this section must:
(1) be made in language easily understood by
purchasers and prospective purchasers of preferred provider
benefit plans;
(2) be made in a uniform, clearly organized manner;
(3) be of sufficient detail and comprehensiveness as
to provide for full and fair disclosure; and
(4) be updated as necessary to ensure that the
disclosures are accurate.
Sec. 1301.1425. PAYMENT IN FULL. If the insurer's payment
due under a preferred provider benefit plan's out-of-network
benefit provisions is greater than or equal to the usual and
customary charge but is not sufficient to cover the total billed
charge, an out-of-network provider electing to participate in this
subchapter agrees to accept as payment in full the amount paid by
the plan in accordance with those provisions plus any portion of the
charge that is the insured's responsibility under the plan.
Sec. 1301.143. REMEDIES. (a) An insurer that violates
Section 1301.1416 is subject to the penalties imposed under Section
1301.137 as if the out-of-network provider were a preferred
provider.
(b) The remedies provided by this section are in addition to
remedies available under any other provision of this code.
SECTION 2. Subchapter C-2, Chapter 1301, Insurance Code, as
added by this Act, applies only to charges for services provided to
an insured under a health insurance policy delivered, issued for
delivery, or renewed on or after January 1, 2018. Charges for
services provided to an insured under a policy delivered, issued
for delivery, or renewed before January 1, 2018, are governed by the
law in effect 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, 2017.