86R31987 SCL-D
By: Hancock, et al. S.B. No. 1264
(Oliverson, Martinez Fischer, Bonnen of Galveston, Zerwas,
Lucio III)
A BILL TO BE ENTITLED
AN ACT
relating to consumer protections against certain medical and health
care billing by certain out-of-network providers.
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 F, Title 8, Insurance Code, is
amended by adding Chapter 1466 to read as follows:
CHAPTER 1466. OUT-OF-NETWORK COVERAGES AND BALANCE BILLING
PROHIBITIONS
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 1466.0001. APPLICABILITY OF DEFINITIONS. In this
chapter, terms defined by Section 1467.001 have the meanings
assigned by that section.
Sec. 1466.0002. APPLICABILITY OF CHAPTER. This chapter
applies only 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) a health benefit plan, other than a health
maintenance organization plan, under Chapter 1551, 1575, or 1579.
SUBCHAPTER B. REQUIRED COVERAGES
Sec. 1466.0051. USUAL AND CUSTOMARY RATE FOR CERTAIN
GOVERNMENTAL PLANS. For purposes of this subchapter, the usual and
customary rate for a health benefit plan under Chapter 1551, 1575,
or 1579 is the relevant allowable amount as described by the
applicable master benefit plan document or policy.
Sec. 1466.0052. EMERGENCY CARE COVERAGE. A health benefit
plan that provides coverage for emergency care performed for or a
supply related to that care provided to an enrollee by an
out-of-network provider must provide the coverage at the usual and
customary rate or at an agreed rate.
Sec. 1466.0053. FACILITY-BASED PROVIDER COVERAGE;
EXCEPTION. (a) Except as provided by Subsection (b), a health
benefit plan that provides coverage for a health care or medical
service performed for or a supply related to that service provided
to an enrollee by an out-of-network provider who is a
facility-based provider must provide the coverage 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.
(b) This section does not apply to a nonemergency health
care or medical service:
(1) that an enrollee elects to receive in writing in
advance of the service with respect to each out-of-network provider
providing the service; and
(2) for which an out-of-network provider, before
providing the service, provides a complete written disclosure to
the enrollee that:
(A) explains that the provider does not have a
contract with the enrollee's health benefit plan;
(B) discloses projected amounts for which the
enrollee may be responsible; and
(C) discloses the circumstances under which the
enrollee would be responsible for those amounts.
Sec. 1466.0054. DIAGNOSTIC IMAGING PROVIDER OR LABORATORY
SERVICE PROVIDER COVERAGE; EXCEPTION. (a) Except as provided by
Subsection (b), a health benefit plan that provides coverage for a
health care or medical service performed for or a supply related to
that service provided to an enrollee by an out-of-network provider
who is a diagnostic imaging provider or laboratory service provider
must provide the coverage at the usual and customary rate or at an
agreed rate if the provider performed the service in connection
with a health care service performed by a participating provider.
(b) This section does not apply to a nonemergency health
care or medical service:
(1) that an enrollee elects to receive in writing in
advance of the service with respect to each out-of-network provider
providing the service; and
(2) for which an out-of-network provider, before
providing the service, provides a complete written disclosure to
the enrollee that:
(A) explains that the provider does not have a
contract with the enrollee's health benefit plan;
(B) discloses projected amounts for which the
enrollee may be responsible; and
(C) discloses the circumstances under which the
enrollee would be responsible for those amounts.
Sec. 1466.0055. ACTION ON CLEAN CLAIMS FOR REQUIRED
COVERAGES. (a) A health maintenance organization shall act on a
clean claim as defined by Section 843.336 related to a health care
or medical service or supply required to be covered under this
subchapter in accordance with Section 843.338 as if the
out-of-network provider is a participating physician or provider.
(b) An insurer shall act on a clean claim as defined by
Section 1301.101 related to a health care or medical service or
supply required to be covered under this subchapter in accordance
with Section 1301.103 as if the out-of-network provider is a
preferred provider.
(c) An administrator shall act on a clean claim as defined
by Section 1301.101 related to a health care or medical service or
supply required to be covered under this subchapter in accordance
with Section 1301.103 as if:
(1) the out-of-network provider is a preferred
provider; and
(2) the administrator is an insurer.
SUBCHAPTER C. BALANCE BILLING PROHIBITIONS
Sec. 1466.0101. BALANCE BILLING PROHIBITION NOTICE. A
health benefit plan issuer or administrator shall provide written
notice in accordance with this section in an explanation of
benefits provided to the enrollee and the out-of-network provider
in connection with a health care service or supply that is subject
to Subchapter B. The notice must include:
(1) a statement of the billing prohibition under
Section 1466.0102;
(2) the total amount the provider may bill the
enrollee under the enrollee's health benefit plan and an
itemization of copayments, deductibles, coinsurance, or other
amounts included in that total; and
(3) for an explanation of benefits provided to the
provider, information required by commissioner rule advising the
provider of the availability of mediation or arbitration, as
applicable, under Chapter 1467.
Sec. 1466.0102. CERTAIN BALANCE BILLING PROHIBITED. For a
health care service or supply required to be covered under
Subchapter B, an out-of-network provider or a person asserting a
claim as an agent or assignee of the provider may not bill an
enrollee in, and the enrollee does not have financial
responsibility for, an amount greater than an applicable copayment,
coinsurance, or deductible under the enrollee's health benefit plan
that:
(1) is based on:
(A) the amount initially determined payable by
the health benefit plan issuer or administrator; or
(B) if applicable, a modified amount as
determined under the issuer's or administrator's internal dispute
resolution process; and
(2) is not based on any additional amount determined
to be owed to the provider under Chapter 1467.
SUBCHAPTER D. ENFORCEMENT
Sec. 1466.0151. INJUNCTION RELATED TO BALANCE BILLING
VIOLATION. (a) If the attorney general receives a referral from
the appropriate regulatory agency indicating that an individual or
entity, including a health benefit plan issuer or administrator,
has exhibited a pattern of intentionally violating Subchapter C,
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. 1466.0152. 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 shall take disciplinary action against the physician,
practitioner, facility, or provider if the physician,
practitioner, facility, or provider violates Section 1466.0102.
(b) A regulatory agency described by Subsection (a) may
adopt rules as necessary to implement this section. Section
2001.0045, Government Code, does not apply to rules adopted under
this subsection.
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), (5), 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 or interprets imaging produced by a diagnostic
imaging service.
(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 service provider" means an
accredited facility in which a specimen taken from a human body is
interpreted and pathological diagnoses are made or a person who
makes an interpretation of or diagnosis based on a specimen or
information provided by a laboratory based on a specimen.
(5) "Mediation" means a process in which an impartial
mediator facilitates and promotes agreement between the health
[insurer offering a preferred provider] benefit plan issuer or the
administrator and an out-of-network [a facility-based] provider
[or emergency care provider] or the provider's representative to
settle a health benefit claim of an enrollee.
(6-a) "Out-of-network provider" means a diagnostic
imaging provider, emergency care provider, facility-based
provider, or laboratory service provider 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 a mediation or arbitration 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 health benefit plan,
other than a health maintenance organization plan, under Chapter
1551, 1575, or 1579.
Sec. 1467.003. RULES. (a) 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.
(b) Section 2001.0045, Government Code, does not apply to a
rule adopted 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 charges of all
physicians or health care providers who are not facilities; and
(2) the 50th percentile of rates paid to participating
providers who are not facilities.
(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 MEDIATION FOR OUT-OF-NETWORK FACILITIES
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. APPLICABILITY OF SUBCHAPTER. This
subchapter applies only with respect to a health benefit claim
submitted by an out-of-network provider that is a facility.
Sec. 1467.0505. ESTABLISHMENT AND ADMINISTRATION OF
MEDIATION PROGRAM. (a) The commissioner shall establish and
administer a mediation program to resolve disputes over
out-of-network provider charges in accordance with this
subchapter.
(b) The commissioner:
(1) shall adopt rules, forms, and procedures necessary
for the implementation and administration of the mediation program,
including the establishment of a portal on the department's
Internet website through which a request for mediation under
Section 1467.051 may be submitted; and
(2) shall maintain a list of qualified mediators for
the program.
SECTION 2.06. The heading to Section 1467.051, Insurance
Code, is amended to read as follows:
Sec. 1467.051. AVAILABILITY OF MANDATORY MEDIATION[;
EXCEPTION].
SECTION 2.07. Sections 1467.051(a) and (b), Insurance Code,
are amended to read as follows:
(a) An out-of-network provider, health benefit plan issuer,
or administrator [An enrollee] may request mediation of a
settlement of an out-of-network health benefit claim through a
portal on the department's Internet website 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 for
which an enrollee may not be billed [, 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) an out-of-network laboratory service; or
(C) an out-of-network diagnostic imaging service
[a health care or medical service or supply provided by a
facility-based provider in a facility that is a preferred provider
or that has a contract with the administrator].
(b) If a person [Except as provided by Subsections (c) and
(d), if an enrollee] requests 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 mediation.
SECTION 2.08. Section 1467.052, Insurance Code, is amended
by amending Subsections (a) and (c) and adding Subsection (d) to
read as follows:
(a) Except as provided by Subsection (b), to qualify for an
appointment as a mediator under this subchapter [chapter] a person
must have completed at least 40 classroom hours of training in
dispute resolution techniques in a course conducted by an
alternative dispute resolution organization or other dispute
resolution organization approved by the commissioner [chief
administrative law judge].
(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 a health [an insurer
offering the preferred provider] benefit plan issuer or
administrator or a facility [physician, health care practitioner,
or other health care provider] during the three years immediately
preceding the request for mediation.
(d) The commissioner shall immediately terminate the
approval of a mediator who no longer meets the requirements under
this subchapter and rules adopted under this subchapter to serve as
a mediator.
SECTION 2.09. Section 1467.053, Insurance Code, is amended
by adding Subsection (b-1) and amending Subsection (d) to read as
follows:
(b-1) If the parties do not select a mediator by mutual
agreement on or before the 30th day after the date the mediation is
requested, the party requesting the mediation shall notify the
commissioner, and the commissioner shall select a mediator from the
commissioner's list of approved mediators.
(d) The mediator's fees shall be split evenly and paid by
the health benefit plan issuer [insurer] or administrator and the
out-of-network [facility-based provider or emergency care]
provider.
SECTION 2.10. Section 1467.054, Insurance Code, is amended
by amending Subsections (a) and (d) and adding Subsection (b-1) to
read as follows:
(a) An out-of-network provider, health benefit plan issuer,
or administrator [enrollee] may request mandatory mediation under
this subchapter [chapter].
(b-1) The person who requests the mediation shall provide
written notice on the date the mediation is requested in the form
and manner provided by commissioner rule to:
(1) the department; and
(2) each other party.
(d) In an effort to settle the claim before mediation, all
parties must participate in an informal settlement teleconference
not later than the 30th day after the date on which a person [the
enrollee] submits a request for mediation under this subchapter
[section].
SECTION 2.11. Sections 1467.055(g) and (i), Insurance Code,
are amended to read as follows:
(g) A [Except at the request of an enrollee, a] mediation
shall be held not later than the 180th day after the date of the
request for mediation.
(i) A health care or medical service or supply provided by
an out-of-network [a facility-based] provider [or emergency care
provider] may not be summarily disallowed. This subsection does not
require a health benefit plan issuer [an insurer] or administrator
to pay for an uncovered service or supply.
SECTION 2.12. Sections 1467.056(a), (b), and (d), Insurance
Code, are amended to read as follows:
(a) In a mediation under this subchapter [chapter], the
parties shall[:
[(1)] evaluate whether:
(1) [(A)] the amount charged by the out-of-network
[facility-based] provider [or emergency care provider] for the
health care or medical service or supply is excessive; and
(2) [(B)] the amount paid by the health benefit plan
issuer [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].
(b) The out-of-network [facility-based] provider [or
emergency care provider] may present information regarding the
amount charged for the health care or medical service or supply. The
health benefit plan issuer [insurer] or administrator may present
information regarding the amount paid by the issuer [insurer] or
administrator.
(d) The goal of the mediation is to reach an agreement
between [among the enrollee,] the out-of-network [facility-based]
provider [or emergency care provider,] and the health benefit plan
issuer [insurer] or administrator, as applicable, as to the amount
paid by the issuer [insurer] or administrator to the out-of-network
[facility-based] provider and [or emergency care provider,] the
amount charged by the out-of-network [facility-based] provider [or
emergency care provider, and the amount paid to the facility-based
provider or emergency care provider by the enrollee].
SECTION 2.13. Subchapter B, Chapter 1467, Insurance Code,
is amended by adding Section 1467.0575 to read as follows:
Sec. 1467.0575. RIGHT TO RECEIVE PAYMENT; RIGHT TO FILE
ACTION. (a) An out-of-network provider has a right to a reasonable
payment from an enrollee's health benefit plan for covered services
and supplies provided to the enrollee that are subject to this
subchapter and for which the provider has not been fully
reimbursed.
(b) Not later than the 45th day after the date that the
mediator's report is provided to the department under Section
1467.060, either party to a mediation for which there was no
agreement may file a civil action to determine the amount due to an
out-of-network provider. A party may not bring a civil action
before the conclusion of the mediation process under this
subchapter.
SECTION 2.14. Section 1467.060, Insurance Code, is amended
to read as follows:
Sec. 1467.060. REPORT OF MEDIATOR. Not later than the 45th
day after the date the mediation concludes, the [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 2.15. Chapter 1467, Insurance Code, is amended by
adding Subchapter B-1 to read as follows:
SUBCHAPTER B-1. MANDATORY BINDING ARBITRATION FOR OTHER PROVIDERS
Sec. 1467.081. APPLICABILITY OF SUBCHAPTER. This
subchapter applies only with respect to a health benefit claim
submitted by an out-of-network provider who is not a facility.
Sec. 1467.082. ESTABLISHMENT AND ADMINISTRATION OF
ARBITRATION PROGRAM. (a) The commissioner shall establish and
administer an arbitration program to resolve disputes over
out-of-network provider charges 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, including the establishment of a portal on the
department's Internet website through which a request for
arbitration under Section 1467.084 may be submitted; and
(2) shall maintain a list of qualified arbitrators for
the program.
Sec. 1467.083. 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 charge
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 charges 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;
(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;
(8) historical rates paid to participating providers;
and
(9) historical data for the percentiles described by
Subdivisions (6) and (7).
Sec. 1467.084. AVAILABILITY OF MANDATORY ARBITRATION. (a)
Not later than the 90th day after the date an out-of-network
provider receives the initial payment for a health care or medical
service or supply, the out-of-network provider or the health
benefit plan issuer or administrator may request arbitration of a
settlement of an out-of-network health benefit claim through a
portal on the department's Internet website if:
(1) there is a charge billed by the provider and unpaid
by the issuer or administrator after copayments, deductibles, and
coinsurance for which an enrollee may not be billed; and
(2) the health benefit claim is for:
(A) emergency care;
(B) a health care or medical service or supply
provided by a facility-based provider in a facility that is a
participating provider;
(C) an out-of-network laboratory service; or
(D) an out-of-network diagnostic imaging
service.
(b) If a person requests arbitration under this subchapter,
the out-of-network provider or the provider's representative, and
the health benefit plan issuer or the administrator, as
appropriate, shall participate in the arbitration.
(c) The person who requests the arbitration shall provide
written notice on the date the arbitration is requested in the form
and manner prescribed by commissioner rule to:
(1) the department; and
(2) each other party.
(d) 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 arbitration
is requested. A health benefit plan issuer or administrator, as
applicable, shall make a reasonable effort to arrange the
teleconference.
(e) The commissioner shall adopt rules providing
requirements for submitting arbitration in one proceeding. The
rules must provide that:
(1) a claim for a billed charge of $1,500 or more may
not be combined with another claim;
(2) the total amount in controversy for multiple
claims in one arbitration may not exceed $5,000; and
(3) the multiple claims in one arbitration must be
limited to the same out-of-network provider.
Sec. 1467.085. EFFECT OF ARBITRATION AND APPLICABILITY OF
OTHER LAW. (a) Notwithstanding Section 1467.004, an
out-of-network provider, health benefit plan issuer, or
administrator may not file suit for an out-of-network claim subject
to this chapter 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.
Sec. 1467.086. 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
requested, the party requesting the arbitration shall notify the
commissioner, and the commissioner shall select an arbitrator from
the commissioner's list of approved arbitrators.
(b) In selecting an arbitrator under this section, the
commissioner shall give preference to an arbitrator who is
knowledgeable and experienced in applicable principles of contract
and insurance law and the health care industry generally.
(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. 1467.087. 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, any deadline under this
subchapter may be extended.
(d) Unless otherwise agreed to by the parties, an arbitrator
may not determine whether a health benefit plan covers a particular
health care or medical service or supply.
(e) The parties shall evenly split and pay the arbitrator's
fees and expenses.
Sec. 1467.088. DECISION. (a) Not later than the 75th day
after the date the arbitration is requested, an arbitrator shall
provide the parties with a written decision in which the
arbitrator:
(1) determines whether the billed charge 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
1467.083(b), provided that if the out-of-network provider elects to
participate in the issuer's or administrator's internal appeal
process before arbitration:
(A) the provider may revise the billed charge to
correct a billing error before the completion of the appeal
process; and
(B) the health benefit plan issuer or
administrator may increase the initial payment under the appeal
process; and
(2) selects the billed charge or initial payment
described by Subdivision (1) as the binding award amount.
(b) An arbitrator may not modify the binding award amount
selected under Subsection (a).
(c) An arbitrator shall provide written notice in the form
and manner prescribed by commissioner rule of the reasonable amount
for the services or supplies and the binding award amount. If the
parties settle before a decision, the parties shall provide written
notice in the form and manner prescribed by commissioner rule of the
amount of the settlement. The department shall maintain a record of
notices provided under this subsection.
Sec. 1467.089. EFFECT OF DECISION. (a) An arbitrator's
decision under Section 1467.088 is binding.
(b) Not later than the 45th day after the date of an
arbitrator's decision under Section 1467.088, a party not satisfied
with the decision may file an action to determine the payment due to
an out-of-network provider.
(c) In an action filed under Subsection (b), the court shall
determine whether the arbitrator's decision is proper based on a
substantial evidence standard of review.
(d) Not later than the 10th day after the date of an
arbitrator's decision under Section 1467.088 or a court's
determination in an action filed under Subsection (b), a health
benefit plan issuer or administrator shall pay to an out-of-network
provider any additional amount necessary to satisfy the binding
award or the court's determination, as applicable.
SECTION 2.16. 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 1467.084(d) or an arbitration or
mediation under this chapter;
(2) failing to provide information the arbitrator or
mediator believes is necessary to facilitate a decision or [an]
agreement; or
(3) failing to designate a representative
participating in the arbitration or mediation with full authority
to enter into any [mediated] agreement.
(b) Failure to reach an agreement under Subchapter B is not
conclusive proof of bad faith participation [mediation].
Sec. 1467.102. PENALTIES. (a) Bad faith participation or
otherwise failing to comply with Subchapter B-1 [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 participation under Subchapter B
[mediation], the regulatory agency that issued the license or
certificate of authority shall impose an administrative penalty.
SECTION 2.17. 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,
arbitration, or 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
1466.0053.
SECTION 3.03. The following provisions of the Insurance
Code are repealed:
(1) Section 1456.004(c);
(2) Section 1467.001(2);
(3) Sections 1467.051(c) and (d);
(4) Section 1467.0511;
(5) Sections 1467.053(b) and (c);
(6) Sections 1467.054(b), (c), (f), and (g);
(7) Sections 1467.055(d) and (h);
(8) Section 1467.057;
(9) Section 1467.058;
(10) Section 1467.059; and
(11) 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 billed amounts for health care or
medical services or supplies, 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) trends and changes in the amounts paid to
participating providers;
(5) 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 enrollees for
amounts greater than the enrollee's responsibility under an
applicable health benefit plan, including an applicable copayment,
coinsurance, or deductible;
(6) trends in amounts paid to out-of-network
providers;
(7) trends in the usual and customary rate for health
care or medical services or supplies, especially emergency
services, laboratory services, diagnostic imaging services, and
facility-based services; and
(8) the effectiveness of the claim dispute resolution
process under Chapter 1467.
(b) In conducting the study described by Subsection (a), the
department shall collect settlement data and verdicts or
arbitration awards, as applicable, from parties to mediation or
arbitration under Chapter 1467.
(c) The department:
(1) shall collect data quarterly from a health benefit
plan issuer or administrator subject to Chapter 1467 to conduct the
study required by this section; and
(2) may 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
January 1, 2020. A health care or medical service or supply
provided before January 1, 2020, 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.