Bill Text: TX HB616 | 2015-2016 | 84th Legislature | Introduced
Bill Title: Relating to payment of and disclosures related to certain out-of-network provider charges; authorizing a fee; providing a penalty.
Spectrum: Partisan Bill (Republican 2-0)
Status: (Introduced - Dead) 2015-04-08 - Considered in public hearing [HB616 Detail]
Download: Texas-2015-HB616-Introduced.html
84R2120 SCL-D | ||
By: Bonnen of Galveston | H.B. No. 616 |
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relating to payment of and disclosures related to certain | ||
out-of-network provider charges; authorizing a fee; providing a | ||
penalty. | ||
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: | ||
SECTION 1. Chapter 1301, Insurance Code, is amended by | ||
adding Subchapter C-2 to read as follows: | ||
SUBCHAPTER C-2. PAYMENT OF OUT-OF-NETWORK PROVIDER CHARGES | ||
Sec. 1301.141. DEFINITIONS. In this subchapter: | ||
(1) "Clean claim" has the meaning assigned by Section | ||
1301.101. | ||
(2) "Database provider" means a database provider | ||
certified by the department under Section 1301.1424. | ||
(3) "Designated reimbursement information | ||
organization" means an organization designated by the commissioner | ||
under Section 1301.1426. | ||
(4) "Geozip area" means an area that includes all zip | ||
codes with the identical first three digits. For purposes of this | ||
term, the geozip area is the closest geozip area to the location in | ||
which the health care service was performed if the location does not | ||
have a zip code. | ||
(5) "Out-of-network provider," with respect to a | ||
preferred provider benefit plan, means a physician or health care | ||
provider that is not a preferred provider of the plan. | ||
(6) "Purchaser" means an insured under a preferred | ||
provider benefit plan, regardless of whether the insured pays any | ||
part of the insured's premium, and a sponsor of the preferred | ||
provider benefit plan, regardless of whether the sponsor pays any | ||
part of an insured's premium. | ||
(7) "Usual and customary charge" means a charge for a | ||
service, classified by geozip area and Current Procedural | ||
Terminology code, that is in the 90th percentile of the charges for | ||
that service reported to a database provider. | ||
Sec. 1301.1414. APPLICABILITY OF SUBCHAPTER. This | ||
subchapter applies only to an insurer providing a preferred | ||
provider benefit plan that provides benefits for services provided | ||
by out-of-network providers. | ||
Sec. 1301.1415. PAYMENT OF CERTAIN OUT-OF-NETWORK | ||
PROVIDERS. (a) An insurer must use a charge-based methodology that | ||
complies with this subchapter for computing a payment for a service | ||
provided by an out-of-network provider if the provider submits a | ||
clean claim for payment that includes: | ||
(1) a certification of the usual and customary charge | ||
for the service determined by a database provider selected by the | ||
out-of-network provider; or | ||
(2) a certification by a database provider selected by | ||
the out-of-network provider that there are not sufficient reported | ||
charges in the database provider's database to establish the usual | ||
and customary charge for the service. | ||
(b) If an out-of-network provider submits a clean claim for | ||
payment of a charge that includes a certification from a database | ||
provider selected by the out-of-network provider indicating that | ||
the billed charge is not higher than the usual and customary charge, | ||
the insurer shall pay the lesser of the billed charge or the usual | ||
and customary charge minus any portion of the charge that is the | ||
insured's responsibility under the preferred provider benefit | ||
plan. | ||
(c) If an out-of-network provider submits a clean claim for | ||
payment of a charge that includes a certification from a database | ||
provider selected by the out-of-network provider indicating that | ||
the billed charge is higher than the usual and customary charge, the | ||
insurer shall pay the billed charge minus any portion of the charge | ||
that is the insured's responsibility under the preferred provider | ||
benefit plan if the billed charge is justifiable considering | ||
special circumstances under which the services are provided. If | ||
the charge is not justifiable considering special circumstances | ||
under which the services are provided, the insurer shall pay the | ||
usual and customary charge minus any portion of the charge that is | ||
the insured's responsibility under the preferred provider benefit | ||
plan. | ||
(d) If an out-of-network provider submits a clean claim for | ||
payment of a charge that includes a certification described by | ||
Subsection (a)(2) with respect to a billed charge, the insurer | ||
shall pay 80 percent of the billed charge or an amount equal to the | ||
90th percentile of the charges for the service reported by the | ||
designated reimbursement information organization for physicians | ||
or health care providers in the same geozip area, whichever is less, | ||
minus any portion of the charge that is the insured's | ||
responsibility under the preferred provider benefit plan. | ||
(e) An insurer may not pay less than an applicable amount | ||
required under this section because the insurer has not received a | ||
portion of the charge that is the insured's responsibility. | ||
Sec. 1301.1416. PROMPT PAYMENT OF CERTAIN CHARGES. If an | ||
out-of-network provider submits to an insurer a clean claim for | ||
payment of a charge that includes a statement from the provider | ||
indicating that the provider is willing to accept a payment for the | ||
service, classified by geozip area and Current Procedural | ||
Terminology code, that is in the 85th percentile of the charges for | ||
that service reported to a database provider selected by the | ||
out-of-network provider and the claim for payment is otherwise made | ||
in accordance with Subchapter C, the claim must be paid in | ||
accordance with Subchapter C as if the physician or health care | ||
provider was a preferred provider. | ||
Sec. 1301.142. REQUIRED CONTRACT TERMS. The language used | ||
in the health insurance policy to describe the benefit provided | ||
under the preferred provider benefit plan for services provided by | ||
an out-of-network provider: | ||
(1) must: | ||
(A) provide that, if a certification described by | ||
Section 1301.1415(a)(2) with respect to the charge is submitted | ||
with the claim, payment to an out-of-network provider will be | ||
computed based on 80 percent of the billed charge or an amount equal | ||
to the 90th percentile of the charges for the service reported by | ||
the designated reimbursement information organization for | ||
physicians or health care providers in the same geozip area, | ||
whichever is less; | ||
(B) define "usual and customary charge" as that | ||
term is defined by Section 1301.141; and | ||
(C) incorporate into the definition of "usual and | ||
customary charge" the definition of "database provider" assigned by | ||
Section 1301.141; and | ||
(2) may not add or subtract language from a definition | ||
required by this section. | ||
Sec. 1301.1424. CERTIFICATION AND QUALIFICATIONS OF | ||
DATABASE PROVIDER AND DATABASE. (a) A database provider that is | ||
used to determine usual and customary charges for the purposes of | ||
this subchapter must be certified by the department. The | ||
department may certify a database provider under this subchapter | ||
only if the department determines that the database provider and | ||
the database used by the provider for the purposes of this | ||
subchapter comply with this section. | ||
(b) A database provider must be a nonprofit organization | ||
that: | ||
(1) maintains a database with content that complies | ||
with this section; | ||
(2) maintains an active Internet website accessible to | ||
all physicians or health care providers subscribing to the database | ||
and to the public; and | ||
(3) demonstrates an ability to: | ||
(A) maintain a compilation of charge data that is | ||
absent any data required to be excluded under Subsection (e)(1); | ||
and | ||
(B) distinguish charges that are not related to | ||
one another and eliminate irrelevant or erroneous charges from | ||
reported charge information. | ||
(c) A database provider must compute usual and customary | ||
charges for services provided by physicians or health care | ||
providers in accordance with this subchapter. | ||
(d) The data in the database must contain out-of-network | ||
charges, classified by Current Procedural Terminology code, for | ||
physician and health care providers in each geozip area in this | ||
state. | ||
(e) The data in the database may not: | ||
(1) include: | ||
(A) any data other than out-of-network billed | ||
charges from physicians and health care providers in this state; | ||
(B) physician and health care provider charges | ||
that reflect payments discounted under governmental or | ||
nongovernmental health benefit plans; or | ||
(C) information that is more than seven years | ||
old; or | ||
(2) exclude charges accompanied by modifiers that | ||
indicate procedures with complications. | ||
(f) An entity may not be certified as a database provider | ||
for the purposes of this subchapter if the entity owns or controls, | ||
or is owned or controlled by, or is an affiliate of, any entity with | ||
a pecuniary interest in the application of the database, including | ||
an insurer, a holding company of an insurer, or a trade association | ||
in the field of insurance or health benefits. | ||
(g) The Internet website required by this section must allow | ||
an individual to determine the usual and customary charge for a | ||
particular service provided by a physician or health care provider. | ||
(h) The department shall ensure that: | ||
(1) the data in the database used to compute usual and | ||
customary charges of out-of-network providers is updated regularly | ||
to accurately reflect current physician and health care provider | ||
retail charges; | ||
(2) charge information that is more than seven years | ||
old is removed from the database; and | ||
(3) at least one entity is certified as a database | ||
provider. | ||
(i) The department may charge a fee for certification under | ||
this section in an amount necessary to implement this section. | ||
Sec. 1301.1425. PROVISION OF USUAL AND CUSTOMARY CHARGE BY | ||
DATABASE PROVIDER. A database provider must compute the usual and | ||
customary charge for each service for which a billed charge is | ||
submitted to the insurer by a physician or health care provider that | ||
subscribes to the database and provide the physician or health care | ||
provider with a certification of the usual and customary charge or a | ||
certification described by Section 1301.1415(a)(2), as applicable, | ||
that is sufficient to enable an insurer to whom the physician or | ||
health care provider submits a claim for payment to comply with this | ||
subchapter. | ||
Sec. 1301.1426. DESIGNATED REIMBURSEMENT INFORMATION | ||
ORGANIZATION. (a) The commissioner by rule shall designate an | ||
organization described by this section to report charges for | ||
services provided by physicians and health care providers under | ||
this subchapter. | ||
(b) The organization designated under this section must be | ||
an independent, not-for-profit organization created to: | ||
(1) establish and maintain a database to help insurers | ||
determine reimbursement rates for out-of-network charges; and | ||
(2) provide insureds with a clear, unbiased | ||
explanation of the reimbursement process. | ||
Sec. 1301.143. DISCLOSURES REGARDING PAYMENT OF | ||
OUT-OF-NETWORK PROVIDER. (a) An insurer that provides benefits | ||
under a preferred provider benefit plan for services provided by | ||
out-of-network providers must disclose in the summary plan | ||
description, on an Internet website maintained by the insurer, and | ||
to a prospective purchaser of the plan: | ||
(1) the definition of "usual and customary charge" | ||
assigned by Section 1301.141 and a description of how payment to an | ||
out-of-network provider will, if applicable, be based on the lesser | ||
of: | ||
(A) the usual and customary charge for the | ||
specific procedure that a physician or health care provider bills | ||
the insurer; or | ||
(B) 80 percent of the billed charge or an amount | ||
equal to the 90th percentile of the charges for the service reported | ||
by the designated reimbursement information organization for | ||
physicians and health care providers in the same geozip area; | ||
(2) examples of the anticipated portion of the charge | ||
that will be the insured's responsibility for frequently billed | ||
health care services by out-of-network providers; | ||
(3) a methodology for determining the anticipated | ||
portion of the charge that will be the insured's responsibility for | ||
a specific health care service that is based on the amount, not an | ||
approximation, that the insurer pays; | ||
(4) the Internet website addresses of each database | ||
provider certified under this subchapter at which a purchaser or | ||
prospective purchaser may access the database or a single website | ||
address at which an updated set of links to the website addresses of | ||
those database providers may be accessed; and | ||
(5) a statement that if the insurer's payment due under | ||
the plan's out-of-network benefit provisions is not sufficient to | ||
cover the total billed charge, the physician or health care | ||
provider agrees to accept as payment in full the amount paid by the | ||
plan in accordance with those provisions plus any portion of the | ||
charge that is the insured's responsibility under the plan. | ||
(b) Disclosures under this section must: | ||
(1) be made in language easily understood by | ||
purchasers and prospective purchasers of preferred provider | ||
benefit plans; | ||
(2) be made in a uniform, clearly organized manner; | ||
(3) be of sufficient detail and comprehensiveness as | ||
to provide for full and fair disclosure; and | ||
(4) be updated as necessary to ensure that the | ||
disclosures are accurate. | ||
Sec. 1301.1434. ANNUAL ACTUARIAL CERTIFICATION. (a) An | ||
insurer that offers a preferred provider benefit plan that provides | ||
coverage for services provided by out-of-network providers must | ||
annually submit to the department a written certification stating: | ||
(1) the difference in value for a purchaser between: | ||
(A) the coverage without the out-of-network | ||
provider benefits; and | ||
(B) the coverage with the out-of-network | ||
provider benefits; and | ||
(2) that the difference between the amount a purchaser | ||
would be charged for the coverage without the out-of-network | ||
provider benefits and the amount that a purchaser would be charged | ||
for the coverage with the out-of-network provider benefits reflects | ||
the difference in value certified under Subdivision (1). | ||
(b) The certification must be made in easily understood | ||
language, in a uniform, clearly organized manner, and be of | ||
sufficient detail and comprehensiveness as to provide for full and | ||
fair disclosure to an average consumer. The difference between the | ||
value of the coverage without the out-of-network provider benefits | ||
and the coverage with the out-of-network provider benefits must be | ||
expressed in terms of a percentage, although use of a percentage | ||
alone is not sufficient to satisfy the requirements of this | ||
section. | ||
(c) The certification must be made by an actuary who is | ||
certified by a nationally recognized actuarial certification | ||
organization recognized by the commissioner and who is not | ||
affiliated with the insurer or any of the insurer's affiliates. | ||
(d) An insurer must make the certification required by this | ||
section readily available to the public. | ||
Sec. 1301.1435. PAYMENT IN FULL. If the insurer's payment | ||
due under a preferred provider benefit plan's out-of-network | ||
benefit provisions is not sufficient to cover the total billed | ||
charge, a physician or health care provider agrees to accept as | ||
payment in full the amount paid by the plan in accordance with those | ||
provisions plus any portion of the charge that is the insured's | ||
responsibility under the plan. | ||
Sec. 1301.1436. REMEDIES. (a) An insurer that violates | ||
Section 1301.1416 is subject to the penalties imposed under Section | ||
1301.137 as if the out-of-network provider was a preferred | ||
provider. | ||
(b) The remedies provided by this section are in addition to | ||
remedies available under any other provision of this code. | ||
SECTION 2. Subchapter C-2, Chapter 1301, Insurance Code, as | ||
added by this Act, applies only to charges for services provided to | ||
an insured under a health insurance policy delivered, issued for | ||
delivery, or renewed on or after January 1, 2016. Charges for | ||
services provided to an insured under a policy delivered, issued | ||
for delivery, or renewed before January 1, 2016, are 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 3. This Act takes effect September 1, 2015. |