By: Hancock, Hinojosa S.B. No. 1264
(In the Senate - Filed February 28, 2019; March 7, 2019,
read first time and referred to Committee on Business & Commerce;
April 8, 2019, reported adversely, with favorable Committee
Substitute by the following vote: Yeas 7, Nays 2; April 8, 2019,
sent to printer.)
Click here to see the committee vote
COMMITTEE SUBSTITUTE FOR S.B. No. 1264 By: Hancock
A BILL TO BE ENTITLED
AN ACT
relating to consumer protections against certain medical and health
care billing by certain out-of-network providers; authorizing a
fee.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
ARTICLE 1. ELIMINATION OF SURPRISE BILLING FOR CERTAIN HEALTH
BENEFIT PLANS
SECTION 1.01. Subtitle G, Title 5, Insurance Code, is
amended by adding Chapter 752 to read as follows:
CHAPTER 752. ENFORCEMENT OF BALANCE BILLING PROHIBITIONS
Sec. 752.0001. INJUNCTION FOR BALANCE BILLING. (a) If the
attorney general believes that an individual or entity is violating
a law prohibiting the individual or entity from billing an insured,
participant, or enrollee in an amount greater than the insured's,
participant's, or enrollee's responsibility under the insured's,
participant's, or enrollee's managed care plan, the attorney
general may bring a civil action in the name of the state to enjoin
the individual or entity from the violation.
(b) If the attorney general prevails in an action brought
under Subsection (a), the attorney general may recover reasonable
attorney's fees, costs, and expenses, including court costs and
witness fees, incurred in bringing the action.
Sec. 752.0002. ENFORCEMENT BY REGULATORY AGENCY. (a) An
appropriate regulatory agency that licenses, certifies, or
otherwise authorizes a physician, health care practitioner, health
care facility, or other health care provider to practice or operate
in this state may take disciplinary action against the physician,
practitioner, facility, or provider if the physician,
practitioner, facility, or provider violates a law prohibiting the
physician, practitioner, facility, or provider from billing an
insured, participant, or enrollee in an amount greater than the
insured's, participant's, or enrollee's responsibility under the
insured's, participant's, or enrollee's managed care plan.
(b) A regulatory agency described by Subsection (a) may
adopt rules as necessary to implement this section.
SECTION 1.02. Subchapter A, Chapter 1271, Insurance Code,
is amended by adding Section 1271.008 to read as follows:
Sec. 1271.008. BALANCE BILLING PROHIBITION NOTICE. A
health maintenance organization shall provide written notice of the
billing prohibitions provided by Sections 1271.155, 1271.157, and
1271.158 in each explanation of benefits provided to an enrollee or
a physician or provider in connection with a health care service
that is subject to one of those sections.
SECTION 1.03. Section 1271.155, Insurance Code, is amended
by adding Subsection (f) to read as follows:
(f) For emergency care subject to this section, a
non-network physician or provider may not bill an enrollee in, and
the enrollee does not have financial responsibility for, an amount
greater than the enrollee's responsibility under the enrollee's
health care plan, including an applicable copayment, coinsurance,
or deductible.
SECTION 1.04. Subchapter D, Chapter 1271, Insurance Code,
is amended by adding Sections 1271.157 and 1271.158 to read as
follows:
Sec. 1271.157. NON-NETWORK FACILITY-BASED PROVIDERS.
(a) In this section, "facility-based provider" means a physician
or provider who provides health care services to patients of a
health care facility.
(b) A health maintenance organization shall pay for a health
care service performed for an enrollee by a non-network physician
or provider who is a facility-based provider at the usual and
customary rate or at an agreed rate if the provider performed the
service at a health care facility that is a network provider.
(c) A non-network facility-based provider may not bill an
enrollee receiving a health care service described by Subsection
(b) in, and the enrollee does not have financial responsibility
for, an amount greater than the enrollee's responsibility under the
enrollee's health care plan, including an applicable copayment,
coinsurance, or deductible.
Sec. 1271.158. NON-NETWORK DIAGNOSTIC IMAGING PROVIDER OR
LABORATORY. (a) In this section, "diagnostic imaging provider"
and "laboratory" have the meanings assigned by Section 1467.001.
(b) A health maintenance organization shall pay for a health
care service performed by a non-network diagnostic imaging provider
or laboratory at the usual and customary rate or at an agreed rate
if the provider or laboratory performed the service in connection
with a health care service performed by a network physician or
provider.
(c) A non-network diagnostic imaging provider or laboratory
may not bill an enrollee receiving a health care service described
by Subsection (b) in, and the enrollee does not have financial
responsibility for, an amount greater than the enrollee's
responsibility under the enrollee's health care plan, including an
applicable copayment, coinsurance, or deductible.
SECTION 1.05. Section 1301.0053, Insurance Code, is amended
to read as follows:
Sec. 1301.0053. EXCLUSIVE PROVIDER BENEFIT PLANS:
EMERGENCY CARE. (a) If an out-of-network [a nonpreferred]
provider provides emergency care as defined by Section 1301.155 to
an enrollee in an exclusive provider benefit plan, the issuer of the
plan shall reimburse the out-of-network [nonpreferred] provider at
the usual and customary rate or at a rate agreed to by the issuer and
the out-of-network [nonpreferred] provider for the provision of the
services.
(b) For emergency care subject to this section, an
out-of-network provider may not bill an insured in, and the insured
does not have financial responsibility for, an amount greater than
the insured's responsibility under the insured's exclusive provider
benefit plan, including an applicable copayment, coinsurance, or
deductible.
SECTION 1.06. Subchapter A, Chapter 1301, Insurance Code,
is amended by adding Section 1301.010 to read as follows:
Sec. 1301.010. BALANCE BILLING PROHIBITION NOTICE. An
insurer shall provide written notice of the billing prohibitions
provided by Sections 1301.0053, 1301.155, 1301.164, and 1301.165 in
each explanation of benefits provided to an insured or a physician
or health care provider in connection with a medical care or health
care service that is subject to one of those sections.
SECTION 1.07. Section 1301.155, Insurance Code, is amended
by amending Subsection (b) and adding Subsection (c) to read as
follows:
(b) If an insured cannot reasonably reach a preferred
provider, an insurer shall provide reimbursement for the following
emergency care services at the usual and customary rate or at an
agreed rate and at the preferred level of benefits until the insured
can reasonably be expected to transfer to a preferred provider:
(1) a medical screening examination or other
evaluation required by state or federal law to be provided in the
emergency facility of a hospital that is necessary to determine
whether a medical emergency condition exists;
(2) necessary emergency care services, including the
treatment and stabilization of an emergency medical condition; and
(3) services originating in a hospital emergency
facility or freestanding emergency medical care facility following
treatment or stabilization of an emergency medical condition.
(c) For emergency care subject to this section, an
out-of-network provider may not bill an insured in, and the insured
does not have financial responsibility for, an amount greater than
the insured's responsibility under the insured's preferred provider
benefit plan, including an applicable copayment, coinsurance, or
deductible.
SECTION 1.08. Subchapter D, Chapter 1301, Insurance Code,
is amended by adding Sections 1301.164 and 1301.165 to read as
follows:
Sec. 1301.164. OUT-OF-NETWORK FACILITY-BASED PROVIDERS.
(a) In this section, "facility-based provider" means a physician
or health care provider who provides health care services to
patients of a health care facility.
(b) An insurer shall pay for a health care service performed
for an insured by an out-of-network provider who is a
facility-based provider at the usual and customary rate or at an
agreed rate if the provider performed the service at a health care
facility that is a preferred provider.
(c) An out-of-network provider who is a facility-based
provider may not bill an insured receiving a health care service
described by Subsection (b) in, and the insured does not have
financial responsibility for, an amount greater than the insured's
responsibility under the insured's preferred provider benefit
plan, including an applicable copayment, coinsurance, or
deductible.
Sec. 1301.165. OUT-OF-NETWORK DIAGNOSTIC IMAGING PROVIDER
OR LABORATORY. (a) In this section, "diagnostic imaging provider"
and "laboratory" have the meanings assigned by Section 1467.001.
(b) An insurer shall pay for a medical care or health care
service performed by an out-of-network provider who is a diagnostic
imaging provider or laboratory at the usual and customary rate or at
an agreed rate if the provider or laboratory performed the service
in connection with a medical care or health care service performed
by a preferred provider.
(c) An out-of-network provider who is a diagnostic imaging
provider or laboratory may not bill an insured receiving a medical
care or health care service described by Subsection (b) in, and the
insured does not have financial responsibility for, an amount
greater than the insured's responsibility under the insured's
preferred provider benefit plan, including an applicable
copayment, coinsurance, or deductible.
SECTION 1.09. Section 1551.003, Insurance Code, is amended
by adding Subdivision (15) to read as follows:
(15) "Usual and customary rate" means the relevant
allowable amount as described by the applicable master benefit plan
document or policy.
SECTION 1.10. Subchapter A, Chapter 1551, Insurance Code,
is amended by adding Section 1551.015 to read as follows:
Sec. 1551.015. BALANCE BILLING PROHIBITION NOTICE. The
administrator of a managed care plan provided under the group
benefits program shall provide written notice of the billing
prohibitions provided by Sections 1551.228, 1551.229, and 1551.230
in each explanation of benefits provided to a participant or a
physician or health care provider in connection with a health care
service that is subject to one of those sections.
SECTION 1.11. Subchapter E, Chapter 1551, Insurance Code,
is amended by adding Sections 1551.228, 1551.229, and 1551.230 to
read as follows:
Sec. 1551.228. EMERGENCY CARE COVERAGE. (a) In this
section, "emergency care" has the meaning assigned by Section
1301.155.
(b) A managed care plan provided under the group benefits
program must provide out-of-network emergency care coverage for
participants in accordance with this section.
(c) The coverage must require the administrator of the plan
to pay for emergency care performed by an out-of-network provider
at the usual and customary rate or at an agreed rate.
(d) For emergency care subject to this section, an
out-of-network provider may not bill a participant in, and the
participant does not have financial responsibility for, an amount
greater than the participant's responsibility under the
participant's managed care plan, including an applicable
copayment, coinsurance, or deductible.
Sec. 1551.229. OUT-OF-NETWORK FACILITY-BASED PROVIDER
COVERAGE. (a) In this section, "facility-based provider" means a
physician or health care provider who provides health care services
to patients of a health care facility.
(b) A managed care plan provided under the group benefits
program must provide out-of-network facility-based provider
coverage for participants in accordance with this section.
(c) The coverage must require the administrator of the plan
to pay for a health care service performed for a participant by an
out-of-network provider who is a facility-based provider at the
usual and customary rate or at an agreed rate if the provider
performed the service at a health care facility that is a
participating provider.
(d) An out-of-network provider who is a facility-based
provider may not bill a participant receiving a health care service
described by Subsection (c) in, and the participant does not have
financial responsibility for, an amount greater than the
participant's responsibility under the participant's managed care
plan, including an applicable copayment, coinsurance, or
deductible.
Sec. 1551.230. OUT-OF-NETWORK DIAGNOSTIC IMAGING PROVIDER
OR LABORATORY. (a) In this section, "diagnostic imaging provider"
and "laboratory" have the meanings assigned by Section 1467.001.
(b) A managed care plan provided under the group benefits
program must provide out-of-network diagnostic imaging provider
and laboratory coverage for participants in accordance with this
section.
(c) The coverage must require the administrator of the plan
to pay for a health care service performed for a participant by an
out-of-network provider who is a diagnostic imaging provider or
laboratory at the usual and customary rate or at an agreed rate if
the provider or laboratory performed the service in connection with
a health care service performed by a participating provider.
(d) An out-of-network provider who is a diagnostic imaging
provider or laboratory may not bill a participant receiving a
health care service described by Subsection (c) in, and the
participant does not have financial responsibility for, an amount
greater than the participant's responsibility under the
participant's managed care plan, including an applicable
copayment, coinsurance, or deductible.
SECTION 1.12. Section 1575.002, Insurance Code, is amended
by adding Subdivision (8) to read as follows:
(8) "Usual and customary rate" means the relevant
allowable amount as described by the applicable master benefit plan
document or policy.
SECTION 1.13. Subchapter A, Chapter 1575, Insurance Code,
is amended by adding Section 1575.009 to read as follows:
Sec. 1575.009. BALANCE BILLING PROHIBITION NOTICE. The
administrator of a managed care plan provided under the group
program shall provide written notice of the billing prohibitions
provided by Sections 1575.171, 1575.172, and 1575.173 in each
explanation of benefits provided to an enrollee or a physician or
health care provider in connection with a health care service that
is subject to one of those sections.
SECTION 1.14. Subchapter D, Chapter 1575, Insurance Code,
is amended by adding Sections 1575.171, 1575.172, and 1575.173 to
read as follows:
Sec. 1575.171. EMERGENCY CARE COVERAGE. (a) In this
section, "emergency care" has the meaning assigned by Section
1301.155.
(b) A managed care plan provided under the group program
must provide out-of-network emergency care coverage in accordance
with this section.
(c) The coverage must require the administrator of the plan
to pay for emergency care performed by an out-of-network provider
at the usual and customary rate or at an agreed rate.
(d) For emergency care subject to this section, an
out-of-network provider may not bill an enrollee in, and the
enrollee does not have financial responsibility for, an amount
greater than the enrollee's responsibility under the enrollee's
managed care plan, including an applicable copayment, coinsurance,
or deductible.
Sec. 1575.172. OUT-OF-NETWORK FACILITY-BASED PROVIDER
COVERAGE. (a) In this section, "facility-based provider" means a
physician or health care provider who provides health care services
to patients of a health care facility.
(b) A managed care plan provided under the group program
must provide out-of-network facility-based provider coverage for
enrollees in accordance with this section.
(c) The coverage must require the administrator of the plan
to pay for a health care service performed for an enrollee by an
out-of-network provider who is a facility-based provider at the
usual and customary rate or at an agreed rate if the provider
performed the service at a health care facility that is a
participating provider.
(d) An out-of-network provider who is a facility-based
provider may not bill an enrollee receiving a health care service
described by Subsection (c) in, and the enrollee does not have
financial responsibility for, an amount greater than the enrollee's
responsibility under the enrollee's managed care plan, including an
applicable copayment, coinsurance, or deductible.
Sec. 1575.173. OUT-OF-NETWORK DIAGNOSTIC IMAGING PROVIDER
OR LABORATORY. (a) In this section, "diagnostic imaging provider"
and "laboratory" have the meanings assigned by Section 1467.001.
(b) A managed care plan provided under the group program
must provide out-of-network diagnostic imaging provider and
laboratory coverage for enrollees in accordance with this section.
(c) The coverage must require the administrator of the plan
to pay for a health care service performed for an enrollee by an
out-of-network provider who is a diagnostic imaging provider or
laboratory at the usual and customary rate or at an agreed rate if
the provider or laboratory performed the service in connection with
a health care service performed by a participating provider.
(d) An out-of-network provider who is a diagnostic imaging
provider or laboratory may not bill an enrollee receiving a health
care service described by Subsection (c) in, and the enrollee does
not have financial responsibility for, an amount greater than the
enrollee's responsibility under the enrollee's managed care plan,
including an applicable copayment, coinsurance, or deductible.
SECTION 1.15. Section 1579.002, Insurance Code, is amended
by adding Subdivision (8) to read as follows:
(8) "Usual and customary rate" means the relevant
allowable amount as described by the applicable master benefit plan
document or policy.
SECTION 1.16. Subchapter A, Chapter 1579, Insurance Code,
is amended by adding Section 1579.009 to read as follows:
Sec. 1579.009. BALANCE BILLING PROHIBITION NOTICE. The
administrator of a managed care plan provided under this chapter
shall provide written notice of the billing prohibitions provided
by Sections 1579.109, 1579.110, and 1579.111 in each explanation of
benefits provided to an enrollee or a physician or health care
provider in connection with a health care service that is subject to
one of those sections.
SECTION 1.17. Subchapter C, Chapter 1579, Insurance Code,
is amended by adding Sections 1579.109, 1579.110, and 1579.111 to
read as follows:
Sec. 1579.109. EMERGENCY CARE COVERAGE. (a) In this
section, "emergency care" has the meaning assigned by Section
1301.155.
(b) A managed care plan provided under this chapter must
provide out-of-network emergency care coverage in accordance with
this section.
(c) The coverage must require the administrator of the plan
to pay for emergency care performed by an out-of-network provider
at the usual and customary rate or at an agreed rate.
(d) For emergency care subject to this section, an
out-of-network provider may not bill an enrollee in, and the
enrollee does not have financial responsibility for, an amount
greater than the enrollee's responsibility under the enrollee's
managed care plan, including an applicable copayment, coinsurance,
or deductible.
Sec. 1579.110. OUT-OF-NETWORK FACILITY-BASED PROVIDER
COVERAGE. (a) In this section, "facility-based provider" means a
physician or health care provider who provides health care services
to patients of a health care facility.
(b) A managed care plan provided under this chapter must
provide out-of-network facility-based provider coverage to
enrollees in accordance with this section.
(c) The coverage must require the administrator of the plan
to pay for a health care service performed for an enrollee by an
out-of-network provider who is a facility-based provider at the
usual and customary rate or at an agreed rate if the provider
performed the service at a health care facility that is a
participating provider.
(d) An out-of-network provider who is a facility-based
provider may not bill an enrollee receiving a health care service
described by Subsection (c) in, and the enrollee does not have
financial responsibility for, an amount greater than the enrollee's
responsibility under the enrollee's managed care plan, including an
applicable copayment, coinsurance, or deductible.
Sec. 1579.111. OUT-OF-NETWORK DIAGNOSTIC IMAGING PROVIDER
OR LABORATORY. (a) In this section, "diagnostic imaging provider"
and "laboratory" have the meanings assigned by Section 1467.001.
(b) A managed care plan provided under this chapter must
provide out-of-network diagnostic imaging provider and laboratory
coverage for enrollees in accordance with this section.
(c) The coverage must require the administrator of the plan
to pay for a health care service performed for an enrollee by an
out-of-network provider who is a diagnostic imaging provider or
laboratory at the usual and customary rate or at an agreed rate if
the provider or laboratory performed the service in connection with
a health care service performed by a participating provider.
(d) An out-of-network provider who is a diagnostic imaging
provider or laboratory may not bill an enrollee receiving a health
care service described by Subsection (c) in, and the enrollee does
not have financial responsibility for, an amount greater than the
enrollee's responsibility under the enrollee's managed care plan,
including an applicable copayment, coinsurance, or deductible.
ARTICLE 2. OUT-OF-NETWORK CLAIM DISPUTE RESOLUTION
SECTION 2.01. Section 1467.001, Insurance Code, is amended
by adding Subdivisions (1-a), (2-c), (2-d), (4-b), and (6-a) and
amending Subdivisions (2-a), (2-b), (3), and (7) to read as
follows:
(1-a) "Arbitration" means a process in which an
impartial arbiter issues a binding determination in a dispute
between a health benefit plan issuer or administrator and an
out-of-network provider or the provider's representative to settle
a health benefit claim.
(2-a) "Diagnostic imaging provider" means a health
care provider who performs a diagnostic imaging service on a
patient for a fee.
(2-b) "Diagnostic imaging service" means magnetic
resonance imaging, computed tomography, positron emission
tomography, or any hybrid technology that combines any of those
imaging modalities.
(2-c) "Emergency care" has the meaning assigned by
Section 1301.155.
(2-d) [(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 subject to this chapter [under Chapter 1551,
1575, or 1579].
(4-b) "Laboratory" means an accredited facility in
which a specimen taken from a human body is interpreted and
pathological diagnoses are made.
(6-a) "Out-of-network provider" means a diagnostic
imaging provider, emergency care provider, facility-based
provider, or laboratory that is not a participating provider for a
health benefit plan.
(7) "Party" means a health benefit plan issuer [an
insurer] offering a health [a preferred provider] benefit plan, an
administrator, or an out-of-network [a facility-based provider or
emergency care] provider or the provider's representative who
participates in an arbitration [a mediation] conducted under this
chapter. [The enrollee is also considered a party to the
mediation.]
SECTION 2.02. Sections 1467.002, 1467.003, and 1467.005,
Insurance Code, are amended to read as follows:
Sec. 1467.002. APPLICABILITY OF CHAPTER. This chapter
applies to:
(1) a health benefit plan offered by a health
maintenance organization operating under Chapter 843;
(2) a preferred provider benefit plan, including an
exclusive provider benefit plan, offered by an insurer under
Chapter 1301; and
(3) [(2)] an administrator of a managed care [health
benefit] plan[, other than a health maintenance organization plan,]
under Chapter 1551, 1575, or 1579.
Sec. 1467.003. RULES. The commissioner, the Texas Medical
Board, and 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.
Sec. 1467.005. REFORM. This chapter may not be construed to
prohibit:
(1) a health [an insurer offering a preferred
provider] benefit plan issuer or administrator from, at any time,
offering a reformed claim settlement; or
(2) an out-of-network [a facility-based provider or
emergency care] provider from, at any time, offering a reformed
charge for health care or medical services or supplies.
SECTION 2.03. Subchapter A, Chapter 1467, Insurance Code,
is amended by adding Section 1467.006 to read as follows:
Sec. 1467.006. BENCHMARKING DATABASE. (a) The
commissioner shall select an organization to maintain a
benchmarking database that contains information necessary to
calculate, with respect to a health care or medical service or
supply, for each geographical area in this state:
(1) the 80th percentile of billed amounts of all
physicians or health care providers; and
(2) the 50th percentile of rates paid to participating
providers.
(b) The commissioner may not select under Subsection (a) an
organization that is financially affiliated with a health benefit
plan issuer.
SECTION 2.04. The heading to Subchapter B, Chapter 1467,
Insurance Code, is amended to read as follows:
SUBCHAPTER B. MANDATORY BINDING ARBITRATION [MEDIATION]
SECTION 2.05. Subchapter B, Chapter 1467, Insurance Code,
is amended by adding Sections 1467.050 and 1467.0505 to read as
follows:
Sec. 1467.050. ESTABLISHMENT AND ADMINISTRATION OF
ARBITRATION PROGRAM. (a) The commissioner shall establish and
administer an arbitration program to resolve disputes over
out-of-network provider amounts in accordance with this
subchapter.
(b) The commissioner:
(1) shall adopt rules, forms, and procedures necessary
for the implementation and administration of the arbitration
program;
(2) may impose a fee on the parties participating in
the program as necessary to cover the cost of implementation and
administration of the arbitration program and to evenly split the
costs of the arbitrator between the parties; and
(3) shall maintain a list of qualified arbitrators for
the program.
Sec. 1467.0505. ISSUE TO BE ADDRESSED; BASIS FOR
DETERMINATION. (a) The only issue that an arbitrator may
determine under this subchapter is the reasonable amount for the
health care or medical services or supplies provided to the
enrollee by an out-of-network provider.
(b) The determination must take into account:
(1) whether there is a gross disparity between the fee
billed by the out-of-network provider and:
(A) fees paid to the out-of-network provider for
the same services or supplies rendered by the provider to other
enrollees for which the provider is an out-of-network provider; and
(B) fees paid by the health benefit plan issuer
to reimburse similarly qualified out-of-network providers for the
same services or supplies in the same region;
(2) the level of training, education, and experience
of the out-of-network provider;
(3) the out-of-network provider's usual billed amount
for comparable services or supplies with regard to other enrollees
for which the provider is an out-of-network provider;
(4) the circumstances and complexity of the enrollee's
particular case, including the time and place of the provision of
the service or supply;
(5) individual enrollee characteristics;
(6) the 80th percentile of all billed amounts for the
service or supply performed by a health care provider in the same or
similar specialty and provided in the same geographical area as
reported in a benchmarking database described by Section 1467.006;
and
(7) the 50th percentile of rates for the service or
supply paid to participating providers in the same or similar
specialty and provided in the same geographical area as reported in
a benchmarking database described by Section 1467.006.
SECTION 2.06. The heading to Section 1467.051, Insurance
Code, is amended to read as follows:
Sec. 1467.051. AVAILABILITY OF MANDATORY ARBITRATION
[MEDIATION; EXCEPTION].
SECTION 2.07. Section 1467.051, Insurance Code, is amended
by amending Subsections (a) and (b) and adding Subsections (e),
(f), (g), and (h) to read as follows:
(a) An out-of-network provider, health benefit plan issuer,
or administrator [An enrollee] may request arbitration [mediation]
of a settlement of an out-of-network health benefit claim if:
(1) there is an [the] amount billed by the provider and
unpaid by the issuer or administrator [for which the enrollee is
responsible to a facility-based provider or emergency care
provider,] 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 in a facility that is a
participating [preferred] provider or that has a contract with the
administrator;
(C) an out-of-network laboratory service; or
(D) an out-of-network diagnostic imaging
service; and
(3) the provider and the issuer or administrator have
exhausted the issuer's or administrator's internal dispute
resolution process.
(b) If a person [Except as provided by Subsections (c) and
(d), if an enrollee] requests arbitration [mediation] under this
subchapter, the out-of-network [facility-based] provider [or
emergency care provider,] or the provider's representative, and the
health benefit plan issuer [insurer] or the administrator, as
appropriate, shall participate in the arbitration [mediation].
(e) The person who requests the arbitration shall provide
written notice on the date the arbitration is requested to:
(1) the department in the form and manner prescribed
by commissioner rule; and
(2) each other party.
(f) Not later than the 15th day after the date a party
receives notice of a request under Subsection (e), the party shall
provide written notice to the person requesting the arbitration
that the party received notice of the arbitration request.
(g) The department shall post on the department's Internet
website a mailing address and e-mail address to receive notice
under this section. If a party has not previously participated in
an arbitration under this subchapter, the party shall provide the
department with a mailing address and e-mail address to receive
notice under this section.
(h) In an effort to settle the claim before arbitration, all
parties must participate in an informal settlement teleconference
not later than the 30th day after the date on which the person
requesting the arbitration receives notice under Subsection (f)
from all other parties.
SECTION 2.08. Subchapter B, Chapter 1467, Insurance Code,
is amended by adding Section 1467.0515 to read as follows:
Sec. 1467.0515. EFFECT OF ARBITRATION AND APPLICABILITY OF
OTHER LAW. (a) Each party to an arbitration under this subchapter
waives a right to pursue any other legal action until the conclusion
of the arbitration on the issue of the amount to be paid in the
out-of-network claim dispute.
(b) An arbitration conducted under this subchapter is not
subject to Title 7, Civil Practice and Remedies Code.
SECTION 2.09. Subchapter B, Chapter 1467, Insurance Code,
is amended by adding Sections 1467.0535, 1467.0545, 1467.0555, and
1467.0565 to read as follows:
Sec. 1467.0535. SELECTION AND APPROVAL OF ARBITRATOR.
(a) If the parties do not select an arbitrator by mutual agreement
on or before the 30th day after the date the arbitration is
initiated, the commissioner shall select an arbitrator from the
commissioner's list of qualified arbitrators.
(b) To be eligible to serve as an arbitrator, an individual
must be knowledgeable and experienced in applicable principles of
contract and insurance law and the health care industry generally
and be approved by the commissioner.
(c) In approving an individual as an arbitrator, the
commissioner shall ensure that the individual does not have a
conflict of interest that would adversely impact the individual's
independence and impartiality in rendering a decision in an
arbitration. A conflict of interest includes current or recent
ownership or employment of the individual or a close family member
in a health benefit plan issuer or out-of-network provider that may
be involved in the arbitration.
(d) The commissioner shall immediately terminate the
approval of an arbitrator who no longer meets the requirements
under this subchapter and rules adopted under this subchapter to
serve as an arbitrator.
Sec. 1467.0545. PROCEDURES. (a) The arbitrator shall set
a date for submission of all information to be considered by the
arbitrator.
(b) A party may not engage in discovery in connection with
the arbitration.
(c) On agreement of all parties, a deadline under this
subchapter may be extended.
Sec. 1467.0555. DECISION. (a) Not later than the 10th day
after the deadline for submission of information, an arbitrator
shall provide the parties with a written decision in which the
arbitrator:
(1) determines whether the billed amount or the
initial payment made by the health benefit plan issuer or
administrator is the closest to the reasonable amount for the
services or supplies determined in accordance with Section
1467.0505(b); and
(2) selects the amount described by Subdivision (1) as
the binding award amount.
(b) An arbitrator may not modify the binding award amount
selected under Subsection (a).
Sec. 1467.0565. EFFECT OF DECISION. (a) An arbitrator's
decision under Section 1467.0555 is binding.
(b) Not later than the 90th day after the date of an
arbitrator's decision under Section 1467.0555, a party not
satisfied with the decision may file an action to determine the
payment due to an out-of-network provider.
(c) An action filed under Subsection (b) is by trial de
novo. The arbitrator's decision under Section 1467.0555 is
admissible to demonstrate the arbitrator's determination of the
reasonable amount for the services or supplies provided by the
out-of-network provider.
SECTION 2.10. Subchapter C, Chapter 1467, Insurance Code,
is amended to read as follows:
SUBCHAPTER C. BAD FAITH PARTICIPATION [MEDIATION]
Sec. 1467.101. BAD FAITH. [(a)] The following conduct
constitutes bad faith participation [mediation] for purposes of
this chapter:
(1) failing to participate in the informal settlement
teleconference under Section 1467.051(h) or arbitration under
Subchapter B [mediation];
(2) failing to provide information the arbitrator
[mediator] believes is necessary to facilitate a decision [an
agreement]; [or]
(3) failing to designate a representative
participating in the arbitration [mediation] with full authority to
enter into any [mediated] agreement; or
(4) failing to appear for the arbitration.
[(b) Failure to reach an agreement is not conclusive proof
of bad faith mediation.]
Sec. 1467.102. PENALTIES. [(a)] Bad faith participation
or otherwise failing to comply with this chapter [mediation, by a
party other than the enrollee,] is grounds for imposition of an
administrative penalty by the regulatory agency that issued a
license or certificate of authority to the party who committed the
violation.
[(b) Except for good cause shown, on a report of a mediator
and appropriate proof of bad faith mediation, the regulatory agency
that issued the license or certificate of authority shall impose an
administrative penalty.]
SECTION 2.11. Sections 1467.151(a), (b), and (c), Insurance
Code, are amended to read as follows:
(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]; and
(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
arbitration [mediation] subject to this chapter[; and
[(2) related to a claim that is the basis of an
enrollee complaint], including:
(1) [(A)] the type of services or supplies that gave
rise to the dispute;
(2) [(B)] the type and specialty, if any, of the
out-of-network [facility-based] provider [or emergency care
provider] who provided the out-of-network service or supply;
(3) [(C)] the county and metropolitan area in which
the health care or medical service or supply was provided;
(4) [(D)] whether the health care or medical service
or supply was for emergency care; and
(5) [(E)] any other information about:
(A) [(i)] the health benefit plan issuer
[insurer] or administrator that the commissioner by rule requires;
or
(B) [(ii)] the out-of-network [facility-based]
provider [or emergency care provider] 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) [(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.
ARTICLE 3. CONFORMING AMENDMENTS
SECTION 3.01. Section 1456.001(6), Insurance Code, is
amended to read as follows:
(6) "Provider network" means a health benefit plan
under which health care services are provided to enrollees through
contracts with health care providers and that requires those
enrollees to use health care providers participating in the plan
and procedures covered by the plan. [The term includes a network
operated by:
[(A) a health maintenance organization;
[(B) a preferred provider benefit plan issuer; or
[(C) another entity that issues a health benefit
plan, including an insurance company.]
SECTION 3.02. Sections 1456.002(a) and (c), Insurance Code,
are amended to read as follows:
(a) This chapter applies to any health benefit plan that:
(1) provides benefits for medical or surgical expenses
incurred as a result of a health condition, accident, or sickness,
including an individual, group, blanket, or franchise insurance
policy or insurance agreement, a group hospital service contract,
or an individual or group evidence of coverage that is offered by:
(A) an insurance company;
(B) a group hospital service corporation
operating under Chapter 842;
(C) a fraternal benefit society operating under
Chapter 885;
(D) a stipulated premium company operating under
Chapter 884;
(E) [a health maintenance organization operating
under Chapter 843;
[(F)] a multiple employer welfare arrangement
that holds a certificate of authority under Chapter 846;
(F) [(G)] an approved nonprofit health
corporation that holds a certificate of authority under Chapter
844; or
(G) [(H)] an entity not authorized under this
code or another insurance law of this state that contracts directly
for health care services on a risk-sharing basis, including a
capitation basis; or
(2) provides health and accident coverage through a
risk pool created under Chapter 172, Local Government Code,
notwithstanding Section 172.014, Local Government Code, or any
other law.
(c) This chapter does not apply to:
(1) Medicaid managed care programs operated under
Chapter 533, Government Code;
(2) Medicaid programs operated under Chapter 32, Human
Resources Code; [or]
(3) the state child health plan operated under Chapter
62 or 63, Health and Safety Code; or
(4) a health benefit plan subject to Section 1271.157,
1301.164, 1551.229, 1575.172, or 1579.110.
SECTION 3.03. The following provisions of the Insurance
Code are repealed:
(1) Section 1456.004(c);
(2) Sections 1467.001(2), (5), and (6);
(3) Sections 1467.051(c) and (d);
(4) Section 1467.0511;
(5) Section 1467.052;
(6) Section 1467.053;
(7) Section 1467.054;
(8) Section 1467.055;
(9) Section 1467.056;
(10) Section 1467.057;
(11) Section 1467.058;
(12) Section 1467.059;
(13) Section 1467.060; and
(14) Section 1467.151(d).
ARTICLE 4. STUDY
SECTION 4.01. Subchapter A, Chapter 38, Insurance Code, is
amended by adding Section 38.004 to read as follows:
Sec. 38.004. BALANCE BILLING PROHIBITION REPORT. (a) The
department shall, each biennium, conduct a study on the impacts of
S.B. No. 1264, Acts of the 86th Legislature, Regular Session, 2019,
on Texas consumers and health coverage in this state, including:
(1) trends in charges for health care services,
especially emergency services, laboratory services, diagnostic
imaging services, and facility-based services;
(2) comparison of the total amount spent on
out-of-network emergency services, laboratory services, diagnostic
imaging services, and facility-based services by calendar year and
provider type or physician specialty;
(3) trends and changes in network participation by
providers of emergency services, laboratory services, diagnostic
imaging services, and facility-based services by provider type or
physician specialty, including whether any terminations were
initiated by a health benefit plan issuer, administrator, or
provider;
(4) the number of complaints, completed
investigations, and disciplinary sanctions for billing by
providers of emergency services, laboratory services, diagnostic
imaging services, or facility-based services of insureds,
enrollees, or plan participants for amounts greater than the
insured's, enrollee's, or participant's responsibility under an
applicable managed care plan, including an applicable copayment,
coinsurance, or deductible; and
(5) trends in amounts paid to out-of-network
providers.
(b) In conducting the study described by Subsection (a), the
department shall collect settlement data and verdicts or
arbitration awards from parties to arbitration under Chapter 1467.
(c) The department may:
(1) collect data as necessary from a health benefit
plan issuer or administrator subject to Chapter 1467 to conduct the
study required by this section; and
(2) utilize any reliable external resource or entity
to acquire information reasonably necessary to prepare the report
required by Subsection (d).
(d) Not later than December 1 of each even-numbered year,
the department shall prepare and submit a written report on the
results of the study under this section, including the department's
findings, to the legislature.
ARTICLE 5. TRANSITION AND EFFECTIVE DATE
SECTION 5.01. The changes in law made by this Act apply only
to a health care or medical service or supply provided on or after
the effective date of this Act. A health care or medical service or
supply provided before the effective date of this Act 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 5.02. The Texas Department of Insurance, the
Employees Retirement System of Texas, the Teacher Retirement System
of Texas, and any other state agency subject to this Act are
required to implement a provision of this Act only if the
legislature appropriates money specifically for that purpose. If
the legislature does not appropriate money specifically for that
purpose, those agencies may, but are not required to, implement a
provision of this Act using other appropriations available for that
purpose.
SECTION 5.03. This Act takes effect September 1, 2019.
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