Physician and Provider Contracts and Arrangements
28 TAC §11.901
The Commissioner of Insurance adopts amendments to §11.901, concerning required contracting provisions for health maintenance organizations (HMOs). The amendments are adopted with a change to the proposed text as published in the July 4, 2003 issue of the Texas Register (28 TexReg 5089). The commissioner adopted emergency rules to take effect on August 16, 2003 in compliance with provisions of Senate Bill (SB) 418. These emergency rules were published in the August 29, 2003 issue of the Texas Register (28 TexReg 7022). The emergency rules will be withdrawn at the time these adopted rules become effective. Other provisions of SB 418 are addressed in adopted rules published elsewhere in this issue of the Texas Register .
These amendments are necessary to implement provisions of SB 418 (78 th Regular Legislative Session) which relate to the coding guidelines and other information that an insurer must supply upon request of a physician or provider.
In developing these rules, the department has had extensive discussions and consultations with the Clean Claims Working Group (CCWG), a group originally established by the department in 2001 and comprised of representatives of carriers, physicians, providers, and trade associations, and open in attendance to all other interested persons. As part of its continuing consultation with the CCWG, the department held three meetings with the group in May and June of 2003 to discuss implementation of the new statute. In addition, SB 418 required the commissioner to appoint a Technical Advisory Committee on Claims Processing (TACCP) to, among other things, advise the commissioner on technical aspects of coding of health care services and claims development, submission, processing, adjudication, and payment. The statute also requires the commissioner to consult with the TACCP prior to adopting any rules. The majority of the members of the CCWG have been appointed to the TACCP, which on June 18 and September 9, 2003 held meetings at which the rules were discussed.
The commissioner held a public hearing on the proposed sections on August 7, 2003 (Docket No. 2554).
SB 418, in pertinent part, required certain changes to the department´s existing rule requiring disclosure of fee schedules and coding information that affect the payment for services provided by physicians and other health care providers pursuant to an HMO contract subject to Texas Insurance Code Chapter 843, Subchapter J. These amendments add language to the existing disclosure rule to conform to new requirements of SB 418. In response to comments, a change has been made to Sec. 11.901(10)(A)(i) to add reference to CDT (Current Dental Technology) codes.
The adopted amendments to paragraphs (10) and (10)(F) delete outdated compliance date language contained in the original rule. The adopted amendments to paragraph (10)(A)(iii) and (iv) state that disclosed bundling processes must be consistent with nationally recognized and generally accepted bundling edits and logic, and add to the list of information to be disclosed, the publisher, product name and version of any software the HMO uses to determine bundling and unbundling of claims. The adopted amendments to paragraph (10)(D) require the HMO to give 90, rather than 60, days written notice of any changes, and provide that an HMO may not make retroactive changes to claims payment procedures or any of the information required to be provided by paragraph (10). Adopted paragraph (10)(G) adds "other business operations" and "communications with a governmental agency involved in the regulation of health care or insurance" to the list of acceptable uses of disclosed information. The adopted amendments to that subsection also change the term "verification" to "representation" in order to avoid confusion with the verification provisions of SB 418.
Adopted paragraph (10)(H) allows a physician or provider that receives information under the disclosure requirements to terminate its contract with an HMO, on or before the 30 th day after the date the physician or provider receives the information, without penalty or discrimination in participation in other products or plans so long as proper notice is given to enrollees in compliance with existing law. Adopted paragraph (10)(I) states the provisions of this paragraph may not be waived, voided, or nullified by contract. Adopted paragraph (11) provides that an HMO may require a physician or provider to retain in its records updated information concerning a patient´s other health benefit plan coverage.
Where applicable, the department has indicated comments received on the comparable Chapter 3 rule, §3.3703, published elsewhere in this issue of the Texas Register , by enclosing the reference in brackets.
Comment: Some commenters suggest that "stand-alone" dental plans be exempted from the requirements of SB 418 altogether, asserting that the bill´s provisions are based upon medical standards (rather than dental standards). One commenter expresses support for applying the requirements to dental claims.
Agency response : SB 418 applies to HMOs, generally, and provides no basis for excluding dental HMOs from its provisions. Therefore, the provisions of §11.901 are applicable to dental HMOs.
Comment: A commenter requests clarification that the rule would not apply to Medicare+Choice claims. Some commenters ask that the department clarify whether Employee Retirement Income Security Act (ERISA) claims are subject to the rule. Some urge application of these provisions to ERISA claims, while others reject such application.
Agency response: The rule does not apply to Medicare+Choice claims. The rule does not apply to benefits available under valid self-funded ERISA plans.
Comment: Several commenters recommend that the rule be made applicable to all existing contracts.
Agency response: The department disagrees. SB 418 provides that a contract entered into or renewed on or after August 16, 2003 would be subject to the statute. Therefore, the rule would also be applicable to contracts entered into or renewed on or after that date.
Comment: A commenter requests that the effective date be deferred to permit carriers sufficient time to draft, file with the department, and distribute to physicians and providers new contractual provisions. Others also generally recommend deferring the effective date, e.g., to January 1, 2004 . Yet other commenters support an early effective date.
Agency response: SB 418 provided that certain provisions would be effective immediately upon enactment ( June 17, 2003 ) and other provisions would be applicable 60 days after the effective date of the statute ( August 16, 2003 ). The Legislature determined the effective date of these provisions. Prompt implementation of these statutory protections was reflected in the adoption of emergency rules with an effective date of August 16, 2003 . This adoption gives permanent effect to the implementation of certain SB 418 provisions.
The department also notes that PPO preferred provider carriers are not required to file their physician/provider contracts with the department. While HMO provider contracts must be filed, no department approval is required prior to use.
Limitations on Requests: A commenter recommends limiting the number of claims payment information requests physicians and providers may make of carriers annually. The commenter suggests that physicians and providers be permitted to request such information no more than twice a year.
Agency response: The department disagrees with the suggested limitation. SB 418 provides unrestricted access to claims payment information.
§11.901(10)(A)(i) [§3.3703(a)(20)(A)(i)]: A commenter suggests that the listing of codes be expanded to include the "Current Dental Terminology" (CDT) code set, as dental plans would find it impossible to comply with a requirement to use the CPT code set. The commenter further notes that the dental industry does not have a diagnostic code set comparable to the ICD-9-CM codes, nor are there industry-wide modifiers to code sets.
Agency response: Section 11.901(10)(A)(i) only requires fee schedule information to include applicable codes and modifiers. Therefore, the rule does not require the disclosure of inapplicable codes or modifiers; neither does it preclude a carrier´s use of other applicable code sets. However, the department agrees to add the CDT code set to the listing of potentially applicable codes in §11.901(10)(A)(i).
§11.901(10)(A)(iii) [§3.3703(a)(20)(A)(iii)]: Several commenters suggest that the department clarify the compliance standards regarding "nationally recognized and generally accepted bundling edits and logic." One commenter suggests the department specifically reference the kinds of software programs that would satisfy the rule requirement. One commenter recommends that the department establish criterion-by-criterion standards to identify legitimate practices on an interdisciplinary basis, and urges the department to not specify one single software as the standard. Another commenter urges the adoption of Correct Coding Initiative (CCI) edits as the standard, asserting that carriers should not be permitted to have their "own" systems. Another commenter urges that any such criteria have a clinical, rather than financial, basis. Another commenter questions, if carriers used commercially available software, whether the identification of the software and edits would satisfy the rule´s requirements. A commenter questions whether carriers would be able to use claim audit software edits to deny or reduce payments, according to multiple surgery guidelines and industry reimbursement standards.
Agency response: SB 418 requires that carriers´ claims payment processes be consistent with nationally recognized, generally accepted bundling edits and logic. It also requires carriers, upon request, to provide their contracted physicians and providers, with a description and copy of their coding guidelines, including any underlying bundling processes. This information must include the name, edition, and model version of the software the carrier uses to determine bundling and unbundling of claims. The adopted rule confirms the minimum requirement imposed by SB 418, i.e., that carriers must disclose their bundling edits and logic, and, pursuant to subparagraph (vii), if software is used, identify the publisher, product name and version of such product. At the same time, the rule puts carriers on notice that their bundling edits and logic must enjoy a general recognition and acceptance, nationally. SB 418 requires the department to consult with the TACCP regarding implementation of any standardized coding and bundling edits and logic. Therefore, the department declines to change the rule, as adopted, at this time. However, it may propose additional amendments to the rule, subsequent to further consultation with the TACCP.
§11.901(10)(F) [§3.3703(a)(20)(F)]: One commenter suggests permitting companies to satisfy requirements of disclosure of fee schedules, bundling guidelines, etc., via a website. Another commenter observes that some carriers´ sites are so extensive that finding the claims payment information is excessively difficult. That commenter requests that the rule clarify the carrier´s obligation to specify where a physician or provider should look on the web.
Agency response: The department disagrees that further clarification is needed. The rule permits carriers to disclose claims payment information by any reasonable method through which the provider can access the information. The rule also requires the carrier to disclose claims payment information such that a reasonable person with sufficient training, experience, and competence in claims processing could determine the payment to be made under the contract. That standard necessarily requires that the claims payment information be presented in a clear and accessible manner. Thus, while a carrier may provide the required information electronically via such means as a website, it is not sufficient to merely direct a physician or provider to a general website absent specific directions about how to access the information requested.
§11.901(10)(G) [§3.3703(a)(20)(G)]: One commenter requests that the department define what is meant by "other business operations."
Agency response: Although the department declines to amend this language, it will monitor any issues that arise relating to disclosure of information under these circumstances, to ascertain whether future rule amendments are warranted.
§11.901(10)(G) [§3.3703(a)(20)(G)]: One commenter suggests penalizing physicians and providers that share confidential/proprietary information inappropriately.
Agency response: While the department lacks enforcement authority over physicians and providers, carriers have remedies available for violations of copyrights, proprietary licensing agreements, etc.
§11.901(11) [§3.3703(a)(21)]: Several commenters, stating that physicians and providers should not be required to track patients´ health care coverage, recommend deletion of this paragraph. One commenter supports the proposal to require providers to maintain insurance information on patients. Another commenter suggests that the rule requires physicians and providers to maintain additional insurance information, including a patient's automobile coverage.
Agency response: SB 418 specifically permits carriers to require a physician or provider to retain updated information concerning a patient´s other health benefit plan coverage. However, automobile insurance coverage, while potentially inclusive of health benefits, is not a health benefit plan. The department declines to change the language of the rule.
For: Community First Health Plans, Inc., and Community Medicine Associates.
For with changes: Aetna, Blue Cross and Blue Shield of Texas, Dallas County Medical Society, First Health Group Corp., Golden Rule Insurance Company, Gulf Quest, L.P., Harris County Medical Society, The Health Group, HealthCore Physicians Group, Humana, Inc., Infectious Care, Kelsey-Seybold Clinic, Medicine Associates of North Texas Forest Location, Medicine Associates of North Texas Mid Cities Office, Medicine Associates of North Texas East Dallas Office, Medical Clinic of North Texas, P.A., National Association of Dental Plans, Patient Physician Network, South Texas Radiology Group, Southwest Pain Management, Texas Association of Business, Texas Association of Health Plans, Texas Eye Institute, Texas Medical Group Management Association, Texas Oncology, P.A., The Woman´s Group, and UnitedHealthcare of Texas, Inc.,
The amendments are adopted under the Insurance Code §§843.309, 843.319, 843.341, 843.349 and 36.001. Section 843.341(b) states that an HMO´s claims payment processes shall be consistent with nationally recognized, generally accepted bundling edits and logic. Section 843.349(a) provides in part that an HMO may require a physician or provider to retain in the physician´s or provider´s records updated information concerning other health benefit plan coverage. Section 843.319 contains requirements and procedures by which coding, bundling, or other payment processes and fee schedules may be requested, and must be provided, pursuant to a contract between an HMO and a physician or provider. Section 843.309 requires an HMO´s contract with a physician or provider to provide for reasonable advance notice to enrollees of termination of a physician or provider from the HMO´s network. Section 36.001 of the Insurance Code provides that the Commissioner of Insurance may adopt any rules necessary and appropriate to implement the powers and duties of the Texas Department of Insurance under the Insurance Code and other laws of this state.
§11.901. Required Provisions. Physician and provider contracts and arrangements shall include the following provisions:
(1) regarding hold harmless clause as described in the Insurance Code Article 20A.18A(g) and §11.1102 of this title (relating to Hold Harmless Clause);
(2) regarding retaliation as described in the Insurance Code Article 20A.14(k);
(3) regarding continuity of treatment, if applicable, as described in the Insurance Code Article 20A.18(A)(c);
(4) regarding written notification of termination to a physician or provider at least 90 days prior to the effective date of the termination of the physician or provider, except in the case of imminent harm to patient health, action against license to practice, or fraud pursuant to Insurance Code Article 20A.18A(b), in which case termination may be immediate. Upon written notification of termination, a physician or provider may seek review of the termination within a period not to exceed 60 days, pursuant to the procedure set forth in the Insurance Code Article 20A.18A(b). The HMO must provide notification of the termination of a physician or provider to its enrollees receiving care from the provider being terminated at least 30 days before the effective date of the termination. Notification of termination of a physician or provider to enrollees for reasons related to imminent harm may be given to enrollees immediately;
(5) regarding posting of complaints notice in physician/provider offices as described in the Insurance Code Article 20A.18A(i). A representative notice that complies with this requirement may be obtained from the Texas Department of Insurance, HMO/ UR /QA Group, P.O. Box 149104 , Austin , Texas 78714-9104 ;
(6) regarding indemnification of the HMO as described in the Insurance Code Article 20A.18A(f);
(7) regarding prompt payment of claims as described in the Insurance Code Article 20A.09(j) and all applicable statutes and rules pertaining to prompt payment of clean claims, including Insurance Code Article 20A.18B (Prompt Payment of Physician and Providers) and §§21.2801-21.2820 of this title (relating to Submission of Clean Claims) with respect to the payment to the physician or provider for covered services that are rendered to enrollees;
(8) regarding capitation, if applicable, as described in the Insurance Code Article 20A.18A(e);
(9) regarding selection of a primary physician or provider, if applicable, as described in the Insurance Code Article 20A.18A(e); and
(10) entitling the physician or provider upon request to all information necessary to determine that the physician or provider is being compensated in accordance with the contract. A physician or provider may make the request for information by any reasonable and verifiable means. The information must include a level of detail sufficient to enable a reasonable person with sufficient training, experience and competence in claims processing to determine the payment to be made according to the terms of the contract for covered services that are rendered to enrollees. The HMO may provide the required information by any reasonable method through which the physician or provider can access the information, including e-mail, computer disks, paper or access to an electronic database. Amendments, revisions or substitutions of any information provided pursuant to this paragraph must be made in accordance with subparagraph (D) of this paragraph. The HMO shall provide the fee schedules and other required information by the 30th day after the date the HMO receives the physician's or provider's request.
(A) This information must include a physician-specific or provider-specific summary and explanation of all payment and reimbursement methodologies that will be used to pay claims submitted by a physician or provider. At a minimum, the information must include:
(i) a fee schedule, including, if applicable, CPT, HCPCS, CDT, ICD-9-CM codes and modifiers:
(I) by which all claims for covered services submitted by or on behalf of the contracting physician or provider will be calculated and paid; or
(II) that pertains to the range of health care services reasonably expected to be delivered under the contract by that contracting physician or provider on a routine basis along with a toll-free number or electronic address through which the contracting physician or provider may request the fee schedules applicable to any covered services that the physician or provider intends to provide to an enrollee and any other information required by this paragraph, that pertains to the service for which the fee schedule is being requested if that information has not previously been provided to the physician or provider;
(ii) all applicable coding methodologies;
(iii) all applicable bundling processes, which must be consistent with nationally recognized and generally accepted bundling edits and logic;
(iv) all applicable downcoding policies;
(v) a description of any other applicable policy or procedure the HMO may use that affects the payment of specific claims submitted by or on behalf of the contracting physician or provider, including recoupment;
(vi) any addenda, schedules, exhibits or policies used by the HMO in carrying out the payment of claims submitted by or on behalf of the contracting physician or provider that are necessary to provide a reasonable understanding of the information provided pursuant to this paragraph; and
(vii) the publisher, product name and version of any software the HMO uses to determine bundling and unbundling of claims.
(B) In the case of a reference to source information as the basis for fee computation that is outside the control of the HMO, such as state Medicaid or federal Medicare fee schedules, the information provided by the HMO shall clearly identify the source and explain the procedure by which the physician or provider may readily access the source electronically, telephonically, or as otherwise agreed to by the parties.
(C) Nothing in this paragraph shall be construed to require an HMO to provide specific information that would violate any applicable copyright law or licensing agreement. However, the HMO must supply, in lieu of any information withheld on the basis of copyright law or licensing agreement, a summary of the information that will allow a reasonable person with sufficient training, experience and competence in claims processing to determine the payment to be made according to the terms of the contract for covered services that are rendered to enrollees as required by subparagraph (A) of this paragraph.
(D) No amendment, revision, or substitution of any of the claims payment procedures or any of the information required to be provided by this paragraph shall be effective as to the contracting physician or provider, unless the HMO provides at least 90 calendar days written notice to the contracting physician or provider identifying with specificity the amendment, revision or substitution. An HMO may not make retroactive changes to claims payment procedures or any of the information required to be provided by this paragraph. Where a contract specifies mutual agreement of the parties as the sole mechanism for requiring amendment, revision or substitution of the information required by this paragraph, the written notice specified in this section does not supersede the requirement for mutual agreement.
(E) Failure to comply with this paragraph constitutes a violation of Insurance Code Chapter 20A (Texas Health Maintenance Organization Act).
(F) This paragraph applies to all contracts entered into or renewed on or after the effective date of this paragraph. Upon receipt of a request, the HMO must provide the information required by subparagraphs (A) - (D) of this paragraph to the contracting physician or provider by the 30th day after the date the HMO receives the contracting physician's or provider's request.
(G) A physician or provider that receives information under this paragraph:
(i) may not use or disclose the information for any purpose other than:
(I) the physician's or provider's practice management,
(II) billing activities,
(III) other business operations, or
(IV) communications with a governmental agency involved in the regulation of health care or insurance;
(ii) may not use this information to knowingly submit a claim for payment that does not accurately represent the level, type or amount of services that were actually provided to an enrollee or to misrepresent any aspect of the services; and
(iii) may not rely upon information provided pursuant to this paragraph about a service as a representation that an enrollee is covered for that service under the terms of the enrollee's evidence of coverage.
(H) A physician or provider that receives information under this paragraph may terminate the contract on or before the 30 th day after the date the physician or provider receives the information without penalty or discrimination in participation in other health care products or plans. The contract between the HMO and physician or provider shall provide for reasonable advance notice to enrollees being treated by the physician or provider prior to the termination consistent with Insurance Code §843.309.
(I) The provisions of this paragraph may not be waived, voided, or nullified by contract.
(11) An HMO may require a contracting physician or provider to retain in the contracting physician or provider´s records updated information concerning a patient´s other health benefit plan coverage.