| 1 | 1 | | 89R4401 SCR-F |
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| 2 | 2 | | By: Muñoz H.B. No. 1641 |
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| 3 | 3 | | |
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| 4 | 4 | | |
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| 5 | 5 | | |
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| 6 | 6 | | |
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| 7 | 7 | | A BILL TO BE ENTITLED |
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| 8 | 8 | | AN ACT |
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| 9 | 9 | | relating to the use of extrapolation by a health maintenance |
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| 10 | 10 | | organization or an insurer to audit claims. |
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| 11 | 11 | | BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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| 12 | 12 | | SECTION 1. Section 843.010, Insurance Code, as effective |
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| 13 | 13 | | April 1, 2025, is amended to read as follows: |
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| 14 | 14 | | Sec. 843.010. APPLICABILITY OF CERTAIN PROVISIONS TO |
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| 15 | 15 | | GOVERNMENTAL HEALTH BENEFIT PLANS. Sections 843.306(f), 843.322, |
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| 16 | 16 | | and 843.363(a)(4) do not apply to coverage under: |
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| 17 | 17 | | (1) the child health plan program under Chapter 62, |
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| 18 | 18 | | Health and Safety Code, or the health benefits plan for children |
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| 19 | 19 | | under Chapter 63, Health and Safety Code; or |
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| 20 | 20 | | (2) a Medicaid program, including a Medicaid managed |
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| 21 | 21 | | care program operated under Chapter 540 or 540A, Government Code, |
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| 22 | 22 | | as applicable. |
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| 23 | 23 | | SECTION 2. Subchapter I, Chapter 843, Insurance Code, is |
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| 24 | 24 | | amended by adding Section 843.322 to read as follows: |
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| 25 | 25 | | Sec. 843.322. USE OF EXTRAPOLATION PROHIBITED. (a) In this |
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| 26 | 26 | | section, "extrapolation" means a mathematical process or technique |
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| 27 | 27 | | used by a health maintenance organization in the audit of a |
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| 28 | 28 | | participating physician or provider to estimate audit results or |
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| 29 | 29 | | findings for a larger batch or group of claims not reviewed by the |
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| 30 | 30 | | health maintenance organization. |
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| 31 | 31 | | (b) A health maintenance organization may not use |
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| 32 | 32 | | extrapolation to complete an audit of a participating physician or |
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| 33 | 33 | | provider. Any additional payment due a participating physician or |
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| 34 | 34 | | provider or any refund due the health maintenance organization must |
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| 35 | 35 | | be based on the actual overpayment or underpayment and may not be |
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| 36 | 36 | | based on an extrapolation. |
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| 37 | 37 | | SECTION 3. Subchapter B, Chapter 1301, Insurance Code, is |
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| 38 | 38 | | amended by adding Section 1301.0643 to read as follows: |
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| 39 | 39 | | Sec. 1301.0643. USE OF EXTRAPOLATION PROHIBITED. (a) In |
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| 40 | 40 | | this section, "extrapolation" means a mathematical process or |
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| 41 | 41 | | technique used by an insurer in the audit of a preferred provider to |
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| 42 | 42 | | estimate audit results or findings for a larger batch or group of |
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| 43 | 43 | | claims not reviewed by the insurer. |
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| 44 | 44 | | (b) An insurer may not use extrapolation to complete an |
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| 45 | 45 | | audit of a preferred provider. Any additional payment due a |
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| 46 | 46 | | preferred provider or any refund due the insurer must be based on |
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| 47 | 47 | | the actual overpayment or underpayment and may not be based on an |
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| 48 | 48 | | extrapolation. |
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| 49 | 49 | | SECTION 4. The change in law made by this Act applies only |
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| 50 | 50 | | to the audit of a physician or provider under a contract with an |
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| 51 | 51 | | insurer or health maintenance organization entered into or renewed |
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| 52 | 52 | | on or after the effective date of this Act. |
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| 53 | 53 | | SECTION 5. This Act takes effect September 1, 2025. |
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