28 TAC §3.3703
1. INTRODUCTION. The Commissioner of Insurance adopts an amendment to §3.3703, concerning insurer contracting arrangements with preferred providers. The amendment is adopted without changes to the proposed text published in the August 5, 2005, issue of the Texas Register (30 TexReg 4437).
2. REASONED JUSTIFICATION. This amendment is necessary to implement Senate Bill (SB) 50 enacted by the 79th Legislature, Regular Session. Consistent with SB 50, the amendment to §3.3703 requires that, upon request from a preferred provider, an insurer shall include a provision in the provider contract providing that the insurer or the insurer's clearinghouse may not deny or refuse to process an electronic clean claim because the claim is submitted together with or in a batch submission of claims that contains claims that are deficient.
3. HOW THE SECTION WILL FUNCTION. The amendment includes the contracting requirement enacted in SB 50 and adds further language to define the term "batch submission." The definition clarifies that the reference to a batch submission is a reference to existing federally standardized transactions and provides that a batch submission is a group of electronic claims submitted for processing at the same time within a HIPAA standard ASC X12N 837 Transaction Set and identified by a batch control number. It is important that insurers avoid erroneously interpreting the language of SB 50 and the adopted amendment. The language of the statute and the adopted amendment apply not only to clean claims submitted in a batch submission with a claim that is deficient, but also to clean claims submitted "together with" claims that are deficient, regardless of whether those claims are in a batch submission. The contract requirement in SB 50 and the adopted amendment applies to more than just those clean claims submitted in a batch submission and includes groups of claims that may or may not be properly classified as a batch submission for federal standardized transactions. Therefore, in applying the contract requirement, it is incorrect for insurers simply to focus on whether claims that are submitted together are in a batch submission that meets the federal regulatory definition.
4. SUMMARY OF COMMENTS AND AGENCY'S RESPONSE TO COMMENTS.
Comment: Commenters agreed with the proposed language that describes the meaning of the term "batch submission."
Agency Response: The department appreciates the supportive comment.
Comment: Though the commenters supported the rule as proposed, one commenter requested that the rule be made applicable to contracts "amended" on or after January 1, 2006. The commenter based the request on language in the statute that states that the provider may request language in the contract providing that the insurer may not refuse to process or pay an electronically submitted clean claim because the claim is submitted together with or in a batch submission with a claim that is not a clean claim.
Agency Response: The department appreciates the supportive comments. Although the department understands the commenter's desire to affect as many contracts as possible in the quickest time possible, SB 50 specifically provides that the changes in the law apply only to contracts "entered into or renewed" on or after January 1, 2006. The rule is consistent with SB 50, and it is the department's position that extending the rule to apply to contract amendments made prior to January 1, 2006 is not within the department's authority. To the extent that a contract amended after January 1, 2006 either includes the language contemplated in SB 50 or otherwise constitutes a renewal of the contract, SB 50 will apply to the contract.
5. NAMES OF THOSE COMMENTING FOR AND AGAINST THE SECTION.
For: Texas Medical Association.
For with changes: Texas Hospital Association.
Against: None.
6. STATUTORY AUTHORITY. The amendment is adopted under Insurance Code §§1301.007, 1301.0641 and 36.001. Section 1301.007 authorizes the Commissioner to adopt rules necessary to implement Insurance Code Title 8 Chapter 1301 and to ensure reasonable accessibility and availability of preferred provider benefits and basic level benefits to residents of this state. Section 1301.0641 provides that, if requested by a preferred provider, an insurer shall include a provision in the preferred provider's contract providing that the insurer or the insurer's clearinghouse may not refuse to process or pay an electronically submitted clean claim because the claim is submitted together with or in a batch submission with a claim that is deficient. Section 36.001 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.
7. TEXT.
§3.3703. Contracting Requirements.
(a) An insurer marketing a preferred provider benefit plan must contract with physicians and health care providers to assure that all medical and health care services and items contained in the package of benefits for which coverage is provided, including treatment of illnesses and injuries, will be provided under the plan in a manner that assures both availability and accessibility of adequate personnel, specialty care, and facilities. Each contract must meet the following requirements:
(1) A contract between a preferred provider and an insurer shall not restrict a physician or health care provider from contracting with other insurers, preferred provider plans, preferred provider organizations, or HMOs.
(2) Any term or condition limiting participation on the basis of quality, contained in a contract between a preferred provider and an insurer, shall be consistent with established standards of care for the profession.
(3) In the case of physicians or practitioners with hospital or institutional provider privileges who provide a significant portion of care in a hospital or institutional provider setting, a contract between a preferred provider and an insurer may contain terms and conditions which include the possession of practice privileges at preferred hospitals or institutions, except that if no preferred hospital or institution offers privileges to members of a class of physicians or practitioners, the contract may not provide that the lack of hospital or institutional provider privileges may be a basis for denial of participation as a preferred provider to such physicians or practitioners of that class.
(4) A contract between an insurer and a hospital or institutional provider shall not, as a condition of staff membership or privileges, require a physician or practitioner to enter into a preferred provider contract.
(5) A contract between a preferred provider and an insurer may provide that the preferred provider will not bill the insured for unnecessary care, if a physician or practitioner panel has determined the care was unnecessary, but the contract shall not require the preferred provider to pay hospital, institutional, laboratory, x-ray, or like charges resulting from the provision of services lawfully ordered by a physician or health care provider, even though such service may be determined to be unnecessary.
(6) A contract between a preferred provider and an insurer shall not:
(A) contain restrictions on the classes of physicians and practitioners who may refer an insured to another physician or practitioner; or
(B) require a referring physician or practitioner to bear the expenses of a referral for specialty care in or out of the preferred provider panel. Savings from cost-effective utilization of health services by contracting physicians or health care providers may be shared with physicians or health care providers in the aggregate.
(7) A contract between a preferred provider and an insurer shall not contain any financial incentives to a physician or a health care provider which act directly or indirectly as an inducement to limit medically necessary services. This subsection does not prohibit the savings from cost-effective utilization of health services by contracting physicians or health care providers from being shared with physicians or health care providers in the aggregate.
(8) A contract between a physician, physicians' group, or practitioner and an insurer shall have a mechanism for the resolution of complaints initiated by an insured, a physician, physicians' group, or practitioner which provides for reasonable due process including, in an advisory role only, a review panel selected by the manner set forth in subsection (b)(2) of §3.3706 of this title (relating to Designation as a Preferred Provider, Decision to Withhold Designation, Termination of a Preferred Provider, Review of Process).
(9) A contract between a preferred provider and an insurer shall not require any health care provider, physician, or physicians' group to execute hold harmless clauses that shift an insurer's tort liability resulting from acts or omissions of the insurer to the preferred provider.
(10) A contract between a preferred provider and an insurer shall require a preferred provider who is compensated by the insurer on a discounted fee basis to agree to bill the insured only on the discounted fee and not the full charge.
(11) A contract between a preferred provider and an insurer shall require the insurer to comply with all applicable statutes and rules pertaining to prompt payment of clean claims, including Insurance Code Article 3.70-3C §3A (Prompt Payment of Preferred Providers) and §§21.2801-21.2820 of this title (relating to Submission of Clean Claims) with respect to payment to the provider for covered services that are rendered to insureds.
(12) A contract between a preferred provider and an insurer shall require the provider to comply with Insurance Code Article 3.70-3C §4 (Preferred Provider Benefit Plans), which relates to Continuity of Care.
(13) A contract between a preferred provider and an insurer shall not prohibit, penalize, permit retaliation against, or terminate the provider for communicating with any individual listed in Insurance Code Article 3.70-3C §7(c) (Preferred Provider Benefit Plans) about any of the matters set forth therein.
(14) A contract between a preferred provider and an insurer conducting, using, or relying upon economic profiling to terminate physicians or health care providers from a plan shall require the insurer to inform the provider of the insurer's obligation to comply with Insurance Code Article 3.70-3C §3(h) (Preferred Provider Benefit Plans).
(15) A contract between a preferred provider and an insurer that engages in quality assessment shall disclose in the contract all requirements of Insurance Code Article 3.70-3C §3(i) (Preferred Provider Benefit Plans).
(16) A contract between a preferred provider and an insurer shall not require a physician to issue an immunization or vaccination protocol for an immunization or vaccination to be administered to an insured by a pharmacist.
(17) A contract between a preferred provider and an insurer shall not prohibit a pharmacist from administering immunizations or vaccinations if such immunizations or vaccinations are administered in accordance with the Texas Pharmacy Act, Article 4542a-1, Texas Civil Statutes and rules promulgated thereunder.
(18) A contract between a preferred provider and an insurer shall require a provider that voluntarily terminates the contract to provide reasonable notice to the insured, and shall require the insurer to provide assistance to the provider as set forth in Insurance Code Article 3.70-3C §6(e)(2) (Preferred Provider Benefit Plans).
(19) A contract between a preferred provider and an insurer shall require written notice to the provider upon termination by the insurer, and in the case of termination of a physician or practitioner, the notice shall include the provider's right to request a review, as set forth in §3.3706(c) of this title (relating to Designation as a Preferred Provider, Decision to Withhold Designation, Termination of a Preferred Provider, Review of Process).
(20) A contract between a preferred provider and an insurer must include provisions that will entitle the preferred provider upon request to all information necessary to determine that the preferred provider is being compensated in accordance with the contract. A preferred 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 insureds. The insurer may provide the required information by any reasonable method through which the preferred 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 insurer shall provide the fee schedules and other required information by the 30th day after the date the insurer receives the preferred provider's request.
(A) This information must include a preferred provider specific summary and explanation of all payment and reimbursement methodologies that will be used to pay claims submitted by the preferred provider. At a minimum, the information must include:
(i) a fee schedule, including, if applicable, CPT, HCPCS, ICD-9-CM codes and modifiers:
(I) by which all claims for covered services submitted by or on behalf of the preferred 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 preferred provider on a routine basis along with a toll-free number or electronic address through which the preferred provider may request the fee schedules applicable to any covered services that the preferred provider intends to provide to an insured 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 preferred 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 insurer may use that affects the payment of specific claims submitted by or on behalf of the preferred provider, including recoupment;
(vi) any addenda, schedules, exhibits or policies used by the insurer in carrying out the payment of claims submitted by or on behalf of the preferred 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 insurer 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 insurer, such as state Medicaid or federal Medicare fee schedules, the information provided by the insurer shall clearly identify the source and explain the procedure by which the preferred 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 insurer to provide specific information that would violate any applicable copyright law or licensing agreement. However, the insurer 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 insureds as required by subparagraph (A) of this paragraph.
(D) No amendment, revision, or substitution of claims payment procedures or any of the information required to be provided by this paragraph shall be effective as to the preferred provider, unless the insurer provides at least 90 calendar days written notice to the preferred provider identifying with specificity the amendment, revision or substitution. An insurer 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 as set forth in subsection (b) of this section.
(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 insurer must provide the information required by subparagraphs (A) - (D) of this paragraph to the preferred provider by the 30th day after the date the insurer receives the preferred provider's request.
(G) A preferred provider that receives information under this paragraph:
(i) may not use or disclose the information for any purpose other than:
(I) the preferred 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 and;
(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 insured 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 insured is covered for that service under the terms of the insured's policy or certificate.
(H) A preferred provider that receives information under this paragraph may terminate the contract on or before the 30th day after the date the preferred provider receives information requested under this paragraph without penalty or discrimination in participation in other health care products or plans. If a preferred provider chooses to terminate the contract, the insurer shall assist the preferred provider in providing the notice required by paragraph (18) of this subsection.
(I) The provisions of this paragraph may not be waived, voided, or nullified by contract.
(21) An insurer may require a preferred provider to retain in the preferred provider's records updated information concerning a patient's other health benefit plan coverage.
(22) Upon request by a preferred provider, an insurer shall include a provision in the preferred provider's contract providing that the insurer and the insurer's clearinghouse may not refuse to process or pay an electronically submitted clean claim because the claim is submitted together with or in a batch submission with a claim that is deficient. As used in this section, the term batch submission is a group of electronic claims submitted for processing at the same time within a HIPAA standard ASC X12N 837 Transaction Set and identified by a batch control number. This paragraph applies to a contract entered into or renewed on or after January 1, 2006.
(b) In addition to all other contract rights, violations of these rules shall be treated for purposes of complaint and action in accordance with Insurance Code Article 21.21-2, and the provisions of that article shall be utilized insofar as practicable, as it relates to the power of the department, hearings, orders, enforcement, and penalties.
(c) An insurer may enter into an agreement with a preferred provider organization for the purpose of offering a network of preferred providers, provided that it remains the insurer's responsibility to:
(1) meet the requirements of Insurance Code Article 3.70-3C (Preferred Provider Benefit Plans) and this subchapter; or
(2) ensure that the requirements of Insurance Code Article 3.70-3C (Preferred Provider Benefit Plans) and this subchapter are met.