Bill Text: TX HB1534 | 2011-2012 | 82nd Legislature | Introduced
Bill Title: Relating to regulation of certain health care provider network contract arrangements.
Spectrum: Bipartisan Bill
Status: (Introduced - Dead) 2011-04-26 - Reported favorably as substituted [HB1534 Detail]
Download: Texas-2011-HB1534-Introduced.html
82R3978 TRH-F | ||
By: Eiland | H.B. No. 1534 |
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relating to regulation of certain health care provider network | ||
contract arrangements. | ||
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: | ||
SECTION 1. Subtitle F, Title 8, Insurance Code, is amended | ||
by adding Chapter 1458 to read as follows: | ||
CHAPTER 1458. PROVIDER NETWORK CONTRACT ARRANGEMENTS | ||
SUBCHAPTER A. GENERAL PROVISIONS | ||
Sec. 1458.001. GENERAL DEFINITIONS. In this chapter: | ||
(1) "Affiliate" means a person who, directly or | ||
indirectly through one or more intermediaries, controls, is | ||
controlled by, or is under common control with another person. | ||
(2) "Contracting entity" means a person that enters | ||
into a direct contract with a provider for the delivery of health | ||
care services in the ordinary course of business. | ||
(3) "Covered individual" means an individual who is | ||
covered under a health benefit plan. | ||
(4) "Direct notification" means a written or | ||
electronic communication from a contracting entity to a physician | ||
or other health care provider documenting third party access to a | ||
provider network. | ||
(5) "Health care services" means services provided for | ||
the diagnosis, prevention, treatment, or cure of a health | ||
condition, illness, injury, or disease. | ||
(6) "Person" has the meaning assigned by Section | ||
823.002. | ||
(7) "Provider" means a physician, a professional | ||
association composed solely of physicians, a single legal entity | ||
authorized to practice medicine owned by two or more physicians, a | ||
nonprofit health corporation certified by the Texas Medical Board | ||
under Chapter 162, Occupations Code, a partnership composed solely | ||
of physicians, a physician-hospital organization that acts | ||
exclusively as an administrator for a provider to facilitate the | ||
provider's participation in health care contracts, a health care | ||
practitioner, or an institutional provider or other person or | ||
organization that furnishes health care services that is licensed | ||
or otherwise authorized to practice in this state. The term does | ||
not include a physician-hospital organization that leases or rents | ||
the physician-hospital organization's network to a third party. | ||
(8) "Provider network contract" means a contract | ||
between a contracting entity and a provider for the delivery of, and | ||
payment for, health care services to a covered individual. | ||
(9) "Third party" means a person that contracts with a | ||
contracting entity or third party to gain access to a provider | ||
network contract. | ||
Sec. 1458.002. DEFINITION OF HEALTH BENEFIT PLAN. (a) In | ||
this chapter, "health benefit plan" means: | ||
(1) a hospital and medical expense incurred policy; | ||
(2) a nonprofit health care service plan contract; | ||
(3) a health maintenance organization subscriber | ||
contract; or | ||
(4) any other health care plan or arrangement that | ||
pays for or furnishes medical or health care services. | ||
(b) "Health benefit plan" does not include one or more or | ||
any combination of the following: | ||
(1) coverage only for accident or disability income | ||
insurance or any combination of those coverages; | ||
(2) credit-only insurance; | ||
(3) coverage issued as a supplement to liability | ||
insurance; | ||
(4) liability insurance, including general liability | ||
insurance and automobile liability insurance; | ||
(5) workers' compensation or similar insurance; | ||
(6) coverage for on-site medical clinics; | ||
(7) automobile medical payment insurance; or | ||
(8) other similar insurance coverage, as specified by | ||
federal regulations issued under the Health Insurance Portability | ||
and Accountability Act of 1996 (Pub. L. No. 104-191), under which | ||
benefits for medical care are secondary or incidental to other | ||
insurance benefits. | ||
(c) "Health benefit plan" does not include the following | ||
benefits if they are provided under a separate policy, certificate, | ||
or contract of insurance, or are otherwise not an integral part of | ||
the coverage: | ||
(1) dental or vision benefits; | ||
(2) benefits for long-term care, nursing home care, | ||
home health care, community-based care, or any combination of these | ||
benefits; | ||
(3) other similar, limited benefits, including | ||
benefits specified by federal regulations issued under the Health | ||
Insurance Portability and Accountability Act of 1996 (Pub. L. No. | ||
104-191); or | ||
(4) a Medicare supplement benefit plan described by | ||
Section 1652.002. | ||
(d) "Health benefit plan" does not include coverage limited | ||
to a specified disease or illness or hospital indemnity coverage or | ||
other fixed indemnity insurance coverage if: | ||
(1) the coverage is provided under a separate policy, | ||
certificate, or contract of insurance; | ||
(2) there is no coordination between the provision of | ||
the coverage and any exclusion of benefits under any group health | ||
benefit plan maintained by the same plan sponsor; and | ||
(3) the coverage is paid with respect to an event | ||
without regard to whether benefits are provided with respect to | ||
such an event under any group health benefit plan maintained by the | ||
same plan sponsor. | ||
Sec. 1458.003. EXEMPTIONS. This chapter does not apply: | ||
(1) to a provider network contract for services | ||
provided to a beneficiary under the Medicaid program, the Medicare | ||
program, or the state child health plan established under Chapter | ||
62, Health and Safety Code, or the comparable plan under Chapter 63, | ||
Health and Safety Code; | ||
(2) under circumstances in which access to the | ||
provider network is granted to an entity that operates under the | ||
same brand licensee program as the contracting entity; or | ||
(3) except as provided by Section 1458.104, to a | ||
contract between a contracting entity and a discount health care | ||
program. | ||
[Sections 1458.004-1458.050 reserved for expansion] | ||
SUBCHAPTER B. REGISTRATION REQUIREMENTS | ||
Sec. 1458.051. REGISTRATION REQUIRED. (a) Unless the | ||
person holds a certificate of authority issued by the department to | ||
engage in the business of insurance in this state or operate a | ||
health maintenance organization under Chapter 843, a person must | ||
register with the department not later than the 30th day after the | ||
date on which the person begins acting as a contracting entity in | ||
this state. | ||
(b) Notwithstanding Subsection (a), under Section 1458.055 | ||
a contracting entity that holds a certificate of authority issued | ||
by the department to engage in the business of insurance in this | ||
state or is a health maintenance organization may file with the | ||
commissioner an application for exemption from registration for its | ||
affiliates. | ||
Sec. 1458.052. DISCLOSURE OF INFORMATION. (a) A person | ||
required to register under Section 1458.051 must disclose: | ||
(1) all names used by the contracting entity, | ||
including any name under which the contracting entity intends to | ||
engage or has engaged in business in this state; | ||
(2) the mailing address and main telephone number of | ||
the contracting entity's headquarters; | ||
(3) the name and telephone number of the contracting | ||
entity's primary contact for the department; and | ||
(4) any other information required by the commissioner | ||
by rule. | ||
(b) The disclosure made under Subsection (a) must include a | ||
description or a copy of the applicant's basic organizational | ||
structure documents and a copy of organizational charts and lists | ||
that show: | ||
(1) the relationships between the contracting entity | ||
and any affiliates of the contracting entity, including subsidiary | ||
networks or other networks; and | ||
(2) the internal organizational structure of the | ||
contracting entity's management. | ||
Sec. 1458.053. SUBMISSION OF INFORMATION. Information | ||
required under this subchapter must be submitted in a written or | ||
electronic format adopted by the commissioner by rule. | ||
Sec. 1458.054. FEES. The department may collect a | ||
reasonable fee set by the commissioner as necessary to administer | ||
the registration process. Fees collected under this chapter shall | ||
be deposited in the Texas Department of Insurance operating fund. | ||
Sec. 1458.055. EXEMPTION FOR AFFILIATES. (a) The | ||
commissioner may grant an exemption for affiliates of a contracting | ||
entity if the contracting entity holds a certificate of authority | ||
issued by the department to engage in the business of insurance in | ||
this state or is a health maintenance organization if the | ||
commissioner determines that: | ||
(1) multiple registrations would require the filing of | ||
duplicative information or would be wasteful of state resources; | ||
(2) the affiliate is not subject to a disclaimer of | ||
affiliation under Chapter 823; and | ||
(3) the relationships between the person who holds a | ||
certificate of authority and all affiliates of the person, | ||
including subsidiary networks or other networks, are disclosed and | ||
clearly defined. | ||
(b) An exemption granted under this section applies only to | ||
registration. An entity granted an exemption is otherwise subject | ||
to this chapter. | ||
Sec. 1458.056. RULES CONCERNING EXEMPTIONS FROM | ||
REGISTRATION REQUIREMENTS. The commissioner by rule: | ||
(1) shall prescribe the form for filing for an | ||
exemption under Section 1458.055; | ||
(2) shall establish the circumstances under which an | ||
exemption is required to be amended or a new exemption filed; | ||
(3) shall establish the time frames and manner for | ||
filing initial, amended, and renewal exemptions; | ||
(4) shall establish the period for which an initial, | ||
amended, or renewal exemption is valid; | ||
(5) shall establish a reasonable fee as necessary to | ||
administer the exemption process; and | ||
(6) may require disclosure of any information | ||
necessary to implement and administer Section 1458.055. | ||
[Sections 1458.057-1458.100 reserved for expansion] | ||
SUBCHAPTER C. RIGHTS AND RESPONSIBILITIES OF A CONTRACTING ENTITY | ||
Sec. 1458.101. CONTRACT REQUIREMENTS. A contracting entity | ||
may not provide a person access to health care services or | ||
contractual discounts under a provider network contract unless the | ||
provider network contract specifically states that: | ||
(1) the contracting entity may contract with a third | ||
party to provide access to the contracting entity's rights and | ||
responsibilities under a provider network contract; and | ||
(2) the third party must comply with all applicable | ||
terms, limitations, and conditions of the provider network | ||
contract. | ||
Sec. 1458.102. DUTIES OF CONTRACTING ENTITY. (a) A | ||
contracting entity that has granted access to health care services | ||
and contractual discounts under a provider network contract shall: | ||
(1) notify each provider of the identity of, and | ||
contact information for, each third party that has or may obtain | ||
access to the provider's health care services and contractual | ||
discounts; | ||
(2) disclose to each third party all relevant terms, | ||
limitations, and conditions necessary to comply with the provider | ||
network contract; | ||
(3) require each third party to disclose the identity | ||
of the contracting entity and the existence of a provider network | ||
contract on each remittance advice or explanation of payment form; | ||
and | ||
(4) notify each third party of the termination of the | ||
third party's provider network contract not later than the 30th day | ||
after the effective date of the contract termination and require | ||
the third party to cease making claims under the provider network | ||
contract after the termination. | ||
(b) The notice required under Subsection (a)(1): | ||
(1) must be provided, at least each calendar quarter, | ||
through: | ||
(A) electronic mail, after provision by the | ||
affected provider of a current electronic mail address; and | ||
(B) posting of the information on an Internet | ||
website; and | ||
(2) must include a separate prominent section that | ||
lists: | ||
(A) each third party that the contracting entity | ||
knows will have access to a discounted fee of the provider in the | ||
succeeding calendar quarter; and | ||
(B) the effective date and termination or renewal | ||
dates, if any, of the third party's contract to access the network. | ||
(c) The electronic mail notice described by Subsection (b) | ||
may contain a link to an Internet web page that contains a list of | ||
third parties that complies with this section. | ||
Sec. 1458.103. EFFECT OF CONTRACT TERMINATION. Subject to | ||
continuity of care requirements, agreements, or contractual | ||
provisions: | ||
(1) a third party may not access health care services | ||
and contractual discounts after the date the provider network | ||
contract terminates; | ||
(2) claims for health care services performed after | ||
the termination date may not be processed or paid under the provider | ||
network contract after the termination; and | ||
(3) claims for health care services performed before | ||
the termination date and processed after the termination date may | ||
be processed and paid under the provider network contract after the | ||
date of termination. | ||
Sec. 1458.104. OFFER FOR DIRECT CONTRACT BY CONTRACTING | ||
ENTITY. (a) In this section, "line of business" has the meaning | ||
assigned by commissioner rule. The term includes noninsurance | ||
plans. | ||
(b) Except as provided by Subsection (c), a contract between | ||
a contracting entity and a provider may not require the provider to | ||
consent to access to, or transfer of, the provider's name and | ||
contracted discounted fee for use with more than one line of | ||
business. | ||
(c) A contracting entity may require a contract for more | ||
than one line of business only if the provider's assent is invited | ||
through a separate signature line for each line of business. | ||
Sec. 1458.105. AVAILABILITY OF CODING GUIDELINES. (a) A | ||
contract between a contracting entity and a provider must provide | ||
that: | ||
(1) the provider may request a description and copy of | ||
the coding guidelines, including any underlying bundling, | ||
recoding, or other payment process and fee schedules applicable to | ||
specific procedures that the provider will receive under the | ||
contract; | ||
(2) the contracting entity or the contracting entity's | ||
agent will provide the coding guidelines and fee schedules not | ||
later than the 30th day after the date the contracting entity | ||
receives the request; | ||
(3) the contracting entity or the contracting entity's | ||
agent will provide notice of changes to the coding guidelines and | ||
fee schedules that will result in a change of payment to the | ||
provider not later than the 90th day before the date the changes | ||
take effect and will not make retroactive revisions to the coding | ||
guidelines and fee schedules; and | ||
(4) the contract may be terminated by the provider on | ||
or before the 30th day after the date the provider receives | ||
information requested under this subsection without penalty or | ||
discrimination in participation in other health care products or | ||
plans. | ||
(b) A provider who receives information under Subsection | ||
(a) may only: | ||
(1) use or disclose the information for the purpose of | ||
practice management, billing activities, and other business | ||
operations; and | ||
(2) disclose the information to a governmental agency | ||
involved in the regulation of health care or insurance. | ||
(c) The contracting entity shall, on request of the | ||
provider, provide the name, edition, and model version of the | ||
software that the contracting entity uses to determine bundling and | ||
unbundling of claims. | ||
(d) The provisions of this section may not be waived, | ||
voided, or nullified by contract. | ||
[Sections 1458.106-1458.150 reserved for expansion] | ||
SUBCHAPTER D. RIGHTS AND RESPONSIBILITIES OF THIRD PARTY | ||
Sec. 1458.151. THIRD-PARTY RIGHTS AND RESPONSIBILITIES. | ||
(a) A third party that grants access to a provider's health care | ||
services and contractual discounts to another third party must | ||
comply with the responsibilities of a contracting entity under | ||
Subchapters C and E. | ||
(b) A third party that obtains access to a provider's health | ||
care services and contractual discounts from a third party acting | ||
as a contracting entity must comply with this subchapter. | ||
Sec. 1458.152. DISCLOSURE BY THIRD PARTY. (a) A third | ||
party shall disclose, to the contracting entity and providers under | ||
the provider network contract, the identity of a person to whom the | ||
third party grants access to the provider's health care services | ||
and contractual discounts through an electronic notification that | ||
complies with Section 1458.102 and includes a link to the Internet | ||
website described by Section 1458.102(b). | ||
(b) A third party that uses an Internet website under this | ||
section must update the website on a quarterly basis. On request, a | ||
contracting entity shall disclose the information by telephone or | ||
through direct notification. | ||
[Sections 1458.153-1458.200 reserved for expansion] | ||
SUBCHAPTER E. UNAUTHORIZED ACCESS TO PROVIDER NETWORK CONTRACTS | ||
Sec. 1458.201. UNAUTHORIZED ACCESS TO OR USE OF DISCOUNT. | ||
(a) A person who knowingly accesses or uses a provider's | ||
contractual discount under a provider network contract without a | ||
contractual relationship established under this chapter commits an | ||
unfair or deceptive act in the business of insurance that violates | ||
Subchapter B, Chapter 541. The remedies available for a violation | ||
of Subchapter B, Chapter 541, under this subsection do not include a | ||
private cause of action under Subchapter D, Chapter 541, or a class | ||
action under Subchapter F, Chapter 541. | ||
(b) A contracting entity or third party must comply with the | ||
disclosure requirements under Section 1458.052(a)(2) or 1458.152 | ||
concerning the services listed on a remittance advice or | ||
explanation of payment. A provider may refuse a discount taken | ||
without a contract under this chapter or in violation of those | ||
sections. | ||
(c) Notwithstanding Subsection (b), an error in the | ||
remittance advice or explanation of payment may be corrected by a | ||
contracting entity or third party not later than the 30th day after | ||
the date the provider notifies in writing the contracting entity or | ||
third party of the error. | ||
Sec. 1458.202. ACCESS TO THIRD PARTY. A contracting entity | ||
may not provide a third party access to a provider network contract | ||
unless the third party is: | ||
(1) a payor or person who administers or processes | ||
claims on behalf of the payor; | ||
(2) a preferred provider benefit plan issuer or | ||
preferred provider network, including a physician-hospital | ||
organization; or | ||
(3) a person who transports claims electronically | ||
between the contracting entity and the payor and does not provide | ||
access to the provider's services and discounts to any other third | ||
party. | ||
[Sections 1458.203-1458.250 reserved for expansion] | ||
SUBCHAPTER F. ENFORCEMENT | ||
Sec. 1458.251. UNFAIR CLAIM SETTLEMENT PRACTICE. (a) A | ||
contracting entity that violates this chapter commits an unfair | ||
claim settlement practice under Subchapter A, Chapter 542, and is | ||
subject to sanctions under that subchapter as if the contracting | ||
entity were an insurer. | ||
(b) A provider who is adversely affected by a violation of | ||
this chapter may make a complaint under Subchapter A, Chapter 542. | ||
Sec. 1458.252. REMEDIES NOT EXCLUSIVE. The remedies | ||
provided by this subchapter are: | ||
(1) not exclusive; and | ||
(2) in addition to any other remedy or procedure | ||
provided by another law or at common law. | ||
SECTION 2. The change in law made by this Act applies only | ||
to a provider network contract entered into or renewed on or after | ||
January 1, 2012. A provider network contract entered into or | ||
renewed before January 1, 2012, 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 3. This Act takes effect September 1, 2011. |