84R2120 SCL-D
	By: Bonnen of Galveston	H.B. No. 616

	A BILL TO BE ENTITLED
	AN ACT
	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.