By: Hancock S.B. No. 507
(In the Senate - Filed January 17, 2017; February 6, 2017,
read first time and referred to Committee on Business & Commerce;
March 16, 2017, reported adversely, with favorable Committee
Substitute by the following vote: Yeas 8, Nays 1; March 16, 2017,
sent to printer.)
Click here to see the committee vote
COMMITTEE SUBSTITUTE FOR S.B. No. 507 By: Hancock
A BILL TO BE ENTITLED
AN ACT
relating to mediation of the settlement of certain out-of-network
health benefit claims involving balance billing.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 1467.001, Insurance Code, is amended by
amending Subdivisions (1), (3), (4), (5), and (7) and adding
Subdivisions (2-a), (2-b), (3-a), and (4-a) to read as follows:
(1) "Administrator" means:
(A) an administering firm for a health benefit
plan providing coverage under Chapter 1551, 1575, or 1579; and
(B) if applicable, the claims administrator for
the health benefit plan.
(2-a) "Emergency care" has the meaning assigned by
Section 1301.155.
(2-b) "Emergency care provider" means a physician,
health care practitioner, facility, or other health care provider
who provides and bills an enrollee, administrator, or health
benefit plan for emergency care.
(3) "Enrollee" means an individual who is eligible to
receive benefits through a preferred provider benefit plan or a
health benefit plan under Chapter 1551, 1575, or 1579.
(3-a) "Facility" has the meaning assigned by Section
324.001, Health and Safety Code.
(4) "Facility-based provider [physician]" means a
physician, health care practitioner, or other health care provider
[radiologist, an anesthesiologist, a pathologist, an emergency
department physician, a neonatologist, or an assistant surgeon:
[(A) to whom the facility has granted clinical
privileges; and
[(B)] who provides health care or medical
services to patients of a [the] facility [under those clinical
privileges].
(4-a) "Health care practitioner" means an individual
who is licensed to provide health care services.
(5) "Mediation" means a process in which an impartial
mediator facilitates and promotes agreement between the insurer
offering a preferred provider benefit plan or the administrator and
a facility-based provider or emergency care provider [physician] or
the provider's [physician's] representative to settle a health
benefit claim of an enrollee.
(7) "Party" means an insurer offering a preferred
provider benefit plan, an administrator, or a facility-based
provider or emergency care provider [physician] or the provider's
[physician's] representative who participates in a mediation
conducted under this chapter. The enrollee is also considered a
party to the mediation.
SECTION 2. Section 1467.002, Insurance Code, is amended to
read as follows:
Sec. 1467.002. APPLICABILITY OF CHAPTER. This chapter
applies to:
(1) a preferred provider benefit plan offered by an
insurer under Chapter 1301; and
(2) an administrator of a health benefit plan, other
than a health maintenance organization plan, under Chapter 1551,
1575, or 1579.
SECTION 3. Section 1467.003, Insurance Code, is amended to
read as follows:
Sec. 1467.003. RULES. The commissioner, the Texas Medical
Board, any other appropriate regulatory agency, and the chief
administrative law judge shall adopt rules as necessary to
implement their respective powers and duties under this chapter.
SECTION 4. Section 1467.005, Insurance Code, is amended to
read as follows:
Sec. 1467.005. REFORM. This chapter may not be construed to
prohibit:
(1) an insurer offering a preferred provider benefit
plan or administrator from, at any time, offering a reformed claim
settlement; or
(2) a facility-based provider or emergency care
provider [physician] from, at any time, offering a reformed charge
for health care or medical services or supplies.
SECTION 5. Section 1467.051, Insurance Code, is amended to
read as follows:
Sec. 1467.051. AVAILABILITY OF MANDATORY MEDIATION;
EXCEPTION. (a) An enrollee may request mediation of a settlement
of an out-of-network health benefit claim if:
(1) the amount for which the enrollee is responsible
to a facility-based provider or emergency care provider
[physician], after copayments, deductibles, and coinsurance,
including the amount unpaid by the administrator or insurer, is
greater than $500; and
(2) the health benefit claim is for:
(A) emergency care; or
(B) a health care or medical service or supply
provided by a facility-based provider [physician] in a facility
[hospital] that is a preferred provider or that has a contract with
the administrator.
(b) Except as provided by Subsections (c) and (d), if an
enrollee requests mediation under this subchapter, the
facility-based provider or emergency care provider, [physician] or
the provider's [physician's] representative, and the insurer or the
administrator, as appropriate, shall participate in the mediation.
(c) Except in the case of an emergency and if requested by
the enrollee, a facility-based provider [physician] shall, before
providing a health care or medical service or supply, provide a
complete disclosure to an enrollee that:
(1) explains that the facility-based provider
[physician] does not have a contract with the enrollee's health
benefit plan;
(2) discloses projected amounts for which the enrollee
may be responsible; and
(3) discloses the circumstances under which the
enrollee would be responsible for those amounts.
(d) A facility-based provider [physician] who makes a
disclosure under Subsection (c) and obtains the enrollee's written
acknowledgment of that disclosure may not be required to mediate a
billed charge under this subchapter if the amount billed is less
than or equal to the maximum amount projected in the disclosure.
SECTION 6. Subchapter B, Chapter 1467, Insurance Code, is
amended by adding Section 1467.0511 to read as follows:
Sec. 1467.0511. NOTICE AND INFORMATION PROVIDED TO
ENROLLEE. (a) A bill sent to an enrollee by a facility-based
provider or emergency care provider or an explanation of benefits
sent to an enrollee by an insurer or administrator for an
out-of-network health benefit claim eligible for mediation under
this chapter must contain, in not less than 10-point boldface type,
a conspicuous, plain-language explanation of the mediation process
available under this chapter, including information on how to
request mediation and a statement that is substantially similar to
the following:
"You may be able to reduce some of your out-of-pocket costs
for an out-of-network medical or health care claim that is eligible
for mediation by contacting the Texas Department of Insurance at
(website) and (phone number)."
(b) If an enrollee contacts an insurer, administrator,
facility-based provider, or emergency care provider about a bill
that may be eligible for mediation under this chapter, the insurer,
administrator, facility-based provider, or emergency care provider
is encouraged to:
(1) inform the enrollee about mediation under this
chapter; and
(2) provide the enrollee with the department's
toll-free telephone number and Internet website address.
SECTION 7. Section 1467.052(c), Insurance Code, is amended
to read as follows:
(c) A person may not act as mediator for a claim settlement
dispute if the person has been employed by, consulted for, or
otherwise had a business relationship with an insurer offering the
preferred provider benefit plan or a physician, health care
practitioner, or other health care provider during the three years
immediately preceding the request for mediation.
SECTION 8. Section 1467.053(d), Insurance Code, is amended
to read as follows:
(d) The mediator's fees shall be split evenly and paid by
the insurer or administrator and the facility-based provider or
emergency care provider [physician].
SECTION 9. Sections 1467.054(b), (c), and (e), Insurance
Code, are amended to read as follows:
(b) A request for mandatory mediation must be provided to
the department on a form prescribed by the commissioner and must
include:
(1) the name of the enrollee requesting mediation;
(2) a brief description of the claim to be mediated;
(3) contact information, including a telephone
number, for the requesting enrollee and the enrollee's counsel, if
the enrollee retains counsel;
(4) the name of the facility-based provider or
emergency care provider [physician] and name of the insurer or
administrator; and
(5) any other information the commissioner may require
by rule.
(c) On receipt of a request for mediation, the department
shall notify the facility-based provider or emergency care provider
[physician] and insurer or administrator of the request.
(e) A dispute to be mediated under this chapter that does
not settle as a result of a teleconference conducted under
Subsection (d) must be conducted in the county in which the health
care or medical services were rendered.
SECTION 10. Sections 1467.055(d), (h), and (i), Insurance
Code, are amended to read as follows:
(d) If the enrollee is participating in the mediation in
person, at the beginning of the mediation the mediator shall inform
the enrollee that if the enrollee is not satisfied with the mediated
agreement, the enrollee may file a complaint with:
(1) the Texas Medical Board or other appropriate
regulatory agency against the facility-based provider or emergency
care provider [physician] for improper billing; and
(2) the department for unfair claim settlement
practices.
(h) On receipt of notice from the department that an
enrollee has made a request for mediation that meets the
requirements of this chapter, the facility-based provider or
emergency care provider [physician] may not pursue any collection
effort against the enrollee who has requested mediation for amounts
other than copayments, deductibles, and coinsurance before the
earlier of:
(1) the date the mediation is completed; or
(2) the date the request to mediate is withdrawn.
(i) A health care or medical service or supply provided by a
facility-based provider or emergency care provider [physician] may
not be summarily disallowed. This subsection does not require an
insurer or administrator to pay for an uncovered service or supply.
SECTION 11. Sections 1467.056(a), (b), and (d), Insurance
Code, are amended to read as follows:
(a) In a mediation under this chapter, the parties shall:
(1) evaluate whether:
(A) the amount charged by the facility-based
provider or emergency care provider [physician] for the health care
or medical service or supply is excessive; and
(B) the amount paid by the insurer or
administrator represents the usual and customary rate for the
health care or medical service or supply or is unreasonably low; and
(2) as a result of the amounts described by
Subdivision (1), determine the amount, after copayments,
deductibles, and coinsurance are applied, for which an enrollee is
responsible to the facility-based provider or emergency care
provider [physician].
(b) The facility-based provider or emergency care provider
[physician] may present information regarding the amount charged
for the health care or medical service or supply. The insurer or
administrator may present information regarding the amount paid by
the insurer or administrator.
(d) The goal of the mediation is to reach an agreement among
the enrollee, the facility-based provider or emergency care
provider [physician], and the insurer or administrator, as
applicable, as to the amount paid by the insurer or administrator to
the facility-based provider or emergency care provider
[physician], the amount charged by the facility-based provider or
emergency care provider [physician], and the amount paid to the
facility-based provider or emergency care provider [physician] by
the enrollee.
SECTION 12. Section 1467.057(a), Insurance Code, is amended
to read as follows:
(a) The mediator of an unsuccessful mediation under this
chapter shall report the outcome of the mediation to the
department, the Texas Medical Board or other appropriate regulatory
agency, and the chief administrative law judge.
SECTION 13. Section 1467.058, Insurance Code, is amended to
read as follows:
Sec. 1467.058. CONTINUATION OF MEDIATION. After a referral
is made under Section 1467.057, the facility-based provider or
emergency care provider [physician] and the insurer or
administrator may elect to continue the mediation to further
determine their responsibilities. Continuation of mediation under
this section does not affect the amount of the billed charge to the
enrollee.
SECTION 14. Section 1467.059, Insurance Code, is amended to
read as follows:
Sec. 1467.059. MEDIATION AGREEMENT. The mediator shall
prepare a confidential mediation agreement and order that states:
(1) the total amount for which the enrollee will be
responsible to the facility-based provider or emergency care
provider [physician], after copayments, deductibles, and
coinsurance; and
(2) any agreement reached by the parties under Section
1467.058.
SECTION 15. Section 1467.060, Insurance Code, is amended to
read as follows:
Sec. 1467.060. REPORT OF MEDIATOR. The mediator shall
report to the commissioner and the Texas Medical Board or other
appropriate regulatory agency:
(1) the names of the parties to the mediation; and
(2) whether the parties reached an agreement or the
mediator made a referral under Section 1467.057.
SECTION 16. Section 1467.101(c), Insurance Code, is amended
to read as follows:
(c) A mediator shall report bad faith mediation to the
commissioner or the Texas Medical Board or other regulatory agency,
as appropriate, following the conclusion of the mediation.
SECTION 17. Section 1467.151, Insurance Code, is amended to
read as follows:
Sec. 1467.151. CONSUMER PROTECTION; RULES. (a) The
commissioner and the Texas Medical Board or other regulatory
agency, as appropriate, shall adopt rules regulating the
investigation and review of a complaint filed that relates to the
settlement of an out-of-network health benefit claim that is
subject to this chapter. The rules adopted under this section must:
(1) distinguish among complaints for out-of-network
coverage or payment and give priority to investigating allegations
of delayed health care or medical care;
(2) develop a form for filing a complaint and
establish an outreach effort to inform enrollees of the
availability of the claims dispute resolution process under this
chapter;
(3) ensure that a complaint is not dismissed without
appropriate consideration;
(4) ensure that enrollees are informed of the
availability of mandatory mediation; and
(5) require the administrator to include a notice of
the claims dispute resolution process available under this chapter
with the explanation of benefits sent to an enrollee.
(b) The department and the Texas Medical Board or other
appropriate regulatory agency shall maintain information:
(1) on each complaint filed that concerns a claim or
mediation subject to this chapter; and
(2) related to a claim that is the basis of an enrollee
complaint, including:
(A) the type of services that gave rise to the
dispute;
(B) the type and specialty, if any, of the
facility-based provider or emergency care provider [physician] who
provided the out-of-network service;
(C) the county and metropolitan area in which the
health care or medical service or supply was provided;
(D) whether the health care or medical service or
supply was for emergency care; and
(E) any other information about:
(i) the insurer or administrator that the
commissioner by rule requires; or
(ii) the facility-based provider or
emergency care provider [physician] that the Texas Medical Board or
other appropriate regulatory agency by rule requires.
(c) The information collected and maintained by the
department and the Texas Medical Board and other appropriate
regulatory agencies under Subsection (b)(2) is public information
as defined by Section 552.002, Government Code, and may not include
personally identifiable information or health care or medical
information.
(d) A facility-based provider or emergency care provider
[physician] who fails to provide a disclosure under Section
1467.051 or 1467.0511 is not subject to discipline by the Texas
Medical Board or other appropriate regulatory agency for that
failure and a cause of action is not created by a failure to
disclose as required by Section 1467.051 or 1467.0511.
SECTION 18. The changes in law made by this Act apply only
to a claim for health care or medical services or supplies provided
on or after January 1, 2018. A claim for health care or medical
services or supplies provided before January 1, 2018, is 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 19. This Act takes effect September 1, 2017.
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