86R10376 SCL-F
By: Whitmire S.B. No. 1591
A BILL TO BE ENTITLED
AN ACT
relating to prohibited balance billing and an independent dispute
resolution program for out-of-network coverage under certain
managed care plans; authorizing a fee.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subtitle C, Title 8, Insurance Code, is amended
by adding Chapter 1275 to read as follows:
CHAPTER 1275. ENROLLEE RESPONSIBILITY FOR COVERED OUT-OF-NETWORK
SERVICES
Sec. 1275.0001. DEFINITIONS. In this chapter:
(1) "Enrollee" means an individual who is eligible for
coverage under a health benefit plan.
(2) "Health benefit plan" means an individual, group,
blanket, or franchise insurance policy or insurance agreement, a
group hospital service contract, or an individual or group evidence
of coverage or similar coverage document that provides benefits for
health care services. The term does not include:
(A) the state Medicaid program, including the
Medicaid managed care program operated under Chapter 533,
Government Code;
(B) the child health plan program operated under
Chapter 62, Health and Safety Code;
(C) Medicare benefits; or
(D) benefits designated as excepted benefits
under 42 U.S.C. Section 300gg-91(c).
(3) "Health benefit plan issuer" means an entity
authorized to engage in business under this code or another
insurance law of this state that issues or offers to issue a health
benefit plan in this state, including:
(A) an insurance company;
(B) a group hospital service corporation
operating under Chapter 842;
(C) a health maintenance organization operating
under Chapter 843; and
(D) a stipulated premium company operating under
Chapter 884.
(4) "Health care facility" means a hospital, emergency
clinic, outpatient clinic, birthing center, ambulatory surgical
center, or other facility licensed to provide health care services.
(5) "Health care practitioner" means an individual who
is licensed to provide and provides health care services.
(6) "Health care provider" means a health care
practitioner or health care facility.
(7) "Managed care plan" means a health benefit plan
under which health care services are provided to enrollees through
contracts with health care providers and that requires enrollees to
use participating providers or that provides a different level of
coverage for enrollees who use participating providers. The term
includes a health benefit plan issued by:
(A) a health maintenance organization;
(B) a preferred provider benefit plan issuer; or
(C) any other health benefit plan issuer.
(8) "Out-of-network provider" means a health care
provider who is not a participating provider.
(9) "Participating provider" means a health care
provider, including a preferred provider, who has contracted with a
health benefit plan issuer to provide services to enrollees.
(10) "Usual, customary, and reasonable rate" has the
meaning assigned by Section 1467.201.
Sec. 1275.0002. APPLICABILITY OF CHAPTER. This chapter
applies only with respect to a managed care plan.
Sec. 1275.0003. CERTAIN PLANS EXCLUDED. This chapter does
not apply to a service covered by a health benefit plan subject to
Subchapter B, Chapter 1467.
Sec. 1275.0004. BALANCE BILLING PROHIBITED. (a) A health
benefit plan issuer shall pay for a covered service performed for an
enrollee under the health benefit plan by an out-of-network
provider at the usual, customary, and reasonable rate or at an
agreed rate.
(b) An out-of-network provider may not bill an enrollee in,
and the enrollee has no 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 2. Chapter 1467, Insurance Code, is amended by
adding Subchapter E to read as follows:
SUBCHAPTER E. INDEPENDENT DISPUTE RESOLUTION PROGRAM
Sec. 1467.201. DEFINITIONS. In this subchapter:
(1) "Health benefit plan" means an individual, group,
blanket, or franchise insurance policy or insurance agreement, a
group hospital service contract, or an individual or group evidence
of coverage or similar coverage document that provides benefits for
health care services. The term does not include:
(A) the state Medicaid program, including the
Medicaid managed care program operated under Chapter 533,
Government Code;
(B) the child health plan program operated under
Chapter 62, Health and Safety Code;
(C) Medicare benefits; or
(D) benefits designated as excepted benefits
under 42 U.S.C. Section 300gg-91(c).
(2) "Health benefit plan issuer" means an entity
authorized to engage in business under this code or another
insurance law of this state that issues or offers to issue a health
benefit plan in this state, including:
(A) an insurance company;
(B) a group hospital service corporation
operating under Chapter 842;
(C) a health maintenance organization operating
under Chapter 843; and
(D) a stipulated premium company operating under
Chapter 884.
(3) "Health care facility" means a hospital, emergency
clinic, outpatient clinic, birthing center, ambulatory surgical
center, or other facility licensed to provide health care services.
(4) "Health care provider" means a health care
practitioner or health care facility.
(5) "Managed care plan" means a health benefit plan
under which health care services are provided to enrollees through
contracts with health care providers and that requires enrollees to
use participating providers or that provides a different level of
coverage for enrollees who use participating providers. The term
includes a health benefit plan issued by:
(A) a health maintenance organization;
(B) a preferred provider benefit plan issuer; or
(C) any other health benefit plan issuer.
(6) "Out-of-network provider" means a health care
provider who is not a participating provider.
(7) "Participating provider" means a health care
provider who has contracted with a health benefit plan issuer to
provide services to enrollees.
(8) "Usual, customary, and reasonable rate" means the
80th percentile of all charges for a particular health care service
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 1467.203.
Sec. 1467.202. APPLICABILITY OF SUBCHAPTER. This
subchapter applies only with respect to a managed care plan.
Sec. 1467.203. BENCHMARKING DATABASE. (a) The
commissioner shall select a nonprofit organization to maintain a
benchmarking database that contains information necessary to
calculate the usual, customary, and reasonable rate for each
geographical area in this state.
(b) The commissioner may not select under Subsection (a) a
nonprofit organization that is financially affiliated with a health
benefit plan issuer.
Sec. 1467.204. ESTABLISHMENT AND ADMINISTRATION OF
PROGRAM. (a) The commissioner shall establish and administer an
independent dispute resolution program to resolve disputes over
out-of-network provider charges, including balance billing, in
accordance with this subchapter.
(b) The commissioner:
(1) shall adopt rules, forms, and procedures necessary
for the implementation and administration of the independent
dispute resolution 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 program; and
(3) shall maintain a list of qualified reviewers for
the program.
Sec. 1467.205. ISSUE TO BE ADDRESSED; BASIS FOR
DETERMINATION. (a) The only issue that an independent reviewer may
determine in a hearing under the independent dispute resolution
program is the reasonable charge for the health care services
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
charged by the out-of-network provider and:
(A) fees paid to the out-of-network provider for
the same services 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 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 charge for
comparable services 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 service;
(5) individual enrollee characteristics; and
(6) the usual, customary, and reasonable rate for the
health care service.
Sec. 1467.206. INITIATION OF PROCESS. (a) A health benefit
plan issuer or out-of-network provider may initiate an independent
dispute resolution process in the form and manner provided by
commissioner rule to determine the amount of reimbursement for a
health care service provided by the provider.
(b) A party may respond to the claims made by the party
initiating the independent dispute resolution process under
Subsection (a) not later than the 15th day after the date the
process is initiated. If the responding party fails to respond,
that party accepts the claims made by the initiating party.
Sec. 1467.207. SELECTION AND APPROVAL OF INDEPENDENT
REVIEWERS. (a) If the parties do not select an independent
reviewer by mutual agreement on or before the 30th day after the
date the independent dispute resolution process is initiated, the
commissioner shall select a reviewer from the commissioner's list
of qualified reviewers.
(b) To be eligible to serve as an independent reviewer, an
individual must be knowledgeable and experienced in applicable
principles of contract and insurance law and the health care
industry generally.
(c) In approving an individual as an independent reviewer,
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
independent dispute resolution process. 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 process.
(d) The commissioner shall immediately terminate the
approval of an independent reviewer who no longer meets the
requirements under this subchapter and rules adopted under this
subchapter to serve as an independent reviewer.
Sec. 1467.208. PROCEDURES. (a) A party to an independent
dispute resolution process may request an oral hearing.
(b) If an oral hearing is not requested, the independent
reviewer shall set a date for submission of all information to be
considered by the reviewer.
(c) A party to an independent dispute resolution process
shall submit a binding award amount to the independent reviewer.
(d) An independent reviewer may make procedural rulings
during an oral hearing.
(e) A party may not engage in discovery in connection with
an independent dispute resolution process.
Sec. 1467.209. DECISION. (a) Not later than the 10th day
after the date of an oral hearing or the deadline for submission of
information, as applicable, an independent reviewer shall provide
the parties with a written decision in which the reviewer
determines which binding award amount submitted under Section
1467.208 is the closest to the reasonable charge for the services
provided in accordance with Section 1467.205(b).
(b) An independent reviewer may not modify the binding award
amount selected under Subsection (a).
(c) The decision described by Subsection (a) is binding and
final. The prevailing party may seek enforcement of the decision in
any court of competent jurisdiction.
Sec. 1467.210. ATTORNEY'S FEES AND COSTS. Unless otherwise
agreed by the parties to an independent dispute resolution process,
each party shall:
(1) bear the party's own attorney's fees and costs; and
(2) equally split the fees and costs of the
independent reviewer.
SECTION 3. Sections 1467.001(3), (5), and (7), Insurance
Code, are amended to read as follows:
(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].
(5) "Mediation" means a process in which an impartial
mediator facilitates and promotes agreement between an [the insurer
offering a preferred provider benefit plan or the] administrator
and a facility-based provider or emergency care provider or the
provider's representative to settle a health benefit claim of an
enrollee.
(7) "Party" means a health [an insurer offering a
preferred provider] benefit plan issuer, an administrator, or a
facility-based provider or emergency care provider or the
provider's representative who participates in a mediation
conducted under this chapter. The enrollee is also considered a
party to the mediation.
SECTION 4. Section 1467.002, Insurance Code, is amended to
read as follows:
Sec. 1467.002. APPLICABILITY OF CHAPTER. Except as
provided by Subchapter E, this [This] chapter applies only 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 5. 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 from, at any time, offering a reformed charge for health
care or medical services or supplies.
SECTION 6. Sections 1467.051(a) and (b), Insurance Code,
are amended to read as follows:
(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, 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
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, or the
provider's representative, and [the insurer or] the
administrator[, as appropriate,] shall participate in the
mediation.
SECTION 7. Section 1467.0511, Insurance Code, is amended 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 8. 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 9. 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.
SECTION 10. Sections 1467.054(b) and (c), 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 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
and [insurer or] administrator of the request.
SECTION 11. Section 1467.055(i), Insurance Code, is amended
to read as follows:
(i) A health care or medical service or supply provided by a
facility-based provider or emergency care provider may not be
summarily disallowed. This subsection does not require an [insurer
or] administrator to pay for an uncovered service or supply.
SECTION 12. 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 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.
(b) The facility-based provider or emergency care provider
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, 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, the amount
charged by the facility-based provider or emergency care provider,
and the amount paid to the facility-based provider or emergency
care provider by the enrollee.
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 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 1467.151(b), Insurance Code, is amended
to read as follows:
(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 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 that the Texas Medical Board or other
appropriate regulatory agency by rule requires.
SECTION 15. The changes in law made by this Act apply only
to a health benefit plan delivered, issued for delivery, or renewed
on or after January 1, 2020. A health benefit plan delivered,
issued for delivery, or renewed before January 1, 2020, is governed
by the law as it existed immediately before the effective date of
this Act, and that law is continued in effect for that purpose.
SECTION 16. This Act takes effect September 1, 2019.