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�	H.B.�No.�2256

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�	AN ACT
�	relating to mediation of out-of-network health benefit claim
�	disputes concerning enrollees, facility-based physicians, and
�	certain health benefit plans; imposing an administrative penalty.
�	�������BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
�	�������SECTION�1.��Subtitle F, Title 8, Insurance Code, is amended
�	by adding Chapter 1467 to read as follows:
�	CHAPTER�1467. OUT-OF-NETWORK CLAIM DISPUTE RESOLUTION
�	SUBCHAPTER A. GENERAL PROVISIONS
�	�������Sec.�1467.001.��DEFINITIONS. In this chapter:
�	�������������(1)��"Administrator" means:
�	�������������������(A)��an administering firm for a health benefit
�	plan providing coverage under Chapter 1551; and
�	�������������������(B)��if applicable, the claims administrator for
�	the health benefit plan.
�	�������������(2)��"Chief administrative law judge" means the chief
�	administrative law judge of the State Office of Administrative
�	Hearings.
�	�������������(3)��"Enrollee" means an individual who is eligible to
�	receive benefits through a preferred provider benefit plan or a
�	health benefit plan under Chapter 1551.
�	�������������(4)��"Facility-based physician" means a radiologist,
�	an anesthesiologist, a pathologist, an emergency department
�	physician, or a neonatologist:
�	�������������������(A)��to whom the facility has granted clinical
�	privileges; and
�	�������������������(B)��who provides services to patients of the
�	facility under those clinical privileges.
�	�������������(5)��"Mediation" means a process in which an impartial
�	mediator facilitates and promotes agreement between the insurer
�	offering a preferred provider benefit plan or the administrator and
�	a facility-based physician or the physician's representative to
�	settle a health benefit claim of an enrollee.
�	�������������(6)��"Mediator" means an impartial person who is
�	appointed to conduct a mediation under this chapter.
�	�������������(7)��"Party" means an insurer offering a preferred
�	provider benefit plan, an administrator, or a facility-based
�	physician or the physician's representative who participates in a
�	mediation conducted under this chapter. The enrollee is also
�	considered a party to the mediation.
�	�������Sec.�1467.002.��APPLICABILITY OF CHAPTER.��This chapter
�	applies to:
�	�������������(1)��a preferred provider benefit plan offered by an
�	insurer under Chapter 1301; and
�	�������������(2)��an administrator of a health benefit plan, other
�	than a health maintenance organization plan, under Chapter 1551.
�	�������Sec.�1467.003.��RULES. The commissioner, the Texas Medical
�	Board, and the chief administrative law judge shall adopt rules as
�	necessary to implement their respective powers and duties under
�	this chapter.
�	�������Sec.�1467.004.��REMEDIES NOT EXCLUSIVE. The remedies
�	provided by this chapter are in addition to any other defense,
�	remedy, or procedure provided by law, including the common law.
�	�������Sec.�1467.005.��REFORM. This chapter may not be construed to
�	prohibit:
�	�������������(1)��an insurer offering a preferred provider benefit
�	plan or administrator from, at any time, offering a reformed claim
�	settlement; or
�	�������������(2)��a facility-based physician from, at any time,
�	offering a reformed charge for medical services.
�	[Sections 1467.006-1467.050 reserved for expansion]
�	SUBCHAPTER B. MANDATORY MEDIATION
�	�������Sec.�1467.051.��AVAILABILITY OF MANDATORY MEDIATION;
�	EXCEPTION. (a) An enrollee may request mediation of a settlement of
�	an out-of-network health benefit claim if:
�	�������������(1)��the amount for which the enrollee is responsible
�	to a facility-based physician, after copayments, deductibles, and
�	coinsurance, including the amount unpaid by the administrator or
�	insurer, is greater than $1,000; and
�	�������������(2)��the health benefit claim is for a medical service
�	or supply provided by a facility-based physician in a hospital that
�	is a preferred provider or that has a contract with the
�	administrator.
�	�������(b)��Except as provided by Subsections (c) and (d), if an
�	enrollee requests mediation under this subchapter, the
�	facility-based physician or the physician's representative and the
�	insurer or the administrator, as appropriate, shall participate in
�	the mediation.
�	�������(c)��Except in the case of an emergency and if requested by
�	the enrollee, a facility-based physician shall, before providing a
�	medical service or supply, provide a complete disclosure to an
�	enrollee that:
�	�������������(1)��explains that the facility-based physician does
�	not have a contract with the enrollee's health benefit plan;
�	�������������(2)��discloses projected amounts for which the enrollee
�	may be responsible; and
�	�������������(3)��discloses the circumstances under which the
�	enrollee would be responsible for those amounts.
�	�������(d)��A facility-based physician who makes a disclosure under
�	Subsection (c) and obtains the enrollee's written acknowledgment of
�	that disclosure may not be required to mediate a billed charge under
�	this subchapter if the amount billed is less than or equal to the
�	maximum amount projected in the disclosure.
�	�������Sec.�1467.052.��MEDIATOR QUALIFICATIONS. (a) Except as
�	provided by Subsection (b), to qualify for an appointment as a
�	mediator under this chapter a person must have completed at least 40
�	classroom hours of training in dispute resolution techniques in a
�	course conducted by an alternative dispute resolution organization
�	or other dispute resolution organization approved by the chief
�	administrative law judge.
�	�������(b)��A person not qualified under Subsection (a) may be
�	appointed as a mediator on agreement of the parties.
�	�������(c)��A person may not act as mediator for a claim settlement
�	dispute if the person has been employed by, consulted for, or
�	otherwise had a business relationship with an insurer offering the
�	preferred provider benefit plan or a physician during the three
�	years immediately preceding the request for mediation.
�	�������Sec.�1467.053.��APPOINTMENT OF MEDIATOR; FEES. (a) A
�	mediation shall be conducted by one mediator.
�	�������(b)��The chief administrative law judge shall appoint the
�	mediator through a random assignment from a list of qualified
�	mediators maintained by the State Office of Administrative
�	Hearings.
�	�������(c)��Notwithstanding Subsection (b), a person other than a
�	mediator appointed by the chief administrative law judge may
�	conduct the mediation on agreement of all of the parties and notice
�	to the chief administrative law judge.
�	�������(d)��The mediator's fees shall be split evenly and paid by
�	the insurer or administrator and the facility-based physician.
�	�������Sec.�1467.054.��REQUEST AND PRELIMINARY PROCEDURES FOR
�	MANDATORY MEDIATION. (a) An enrollee may request mandatory
�	mediation under this chapter.
�	�������(b)��A request for mandatory mediation must be provided to
�	the department on a form prescribed by the commissioner and must
�	include:
�	�������������(1)��the name of the enrollee requesting mediation;
�	�������������(2)��a brief description of the claim to be mediated;
�	�������������(3)��contact information, including a telephone
�	number, for the requesting enrollee and the enrollee's counsel, if
�	the enrollee retains counsel;
�	�������������(4)��the name of the facility-based physician and name
�	of the insurer or administrator; and
�	�������������(5)��any other information the commissioner may require
�	by rule.
�	�������(c)��On receipt of a request for mediation, the department
�	shall notify the facility-based physician and insurer or
�	administrator of the request.
�	�������(d)��In an effort to settle the claim before mediation, all
�	parties must participate in an informal settlement teleconference
�	not later than the 30th day after the date on which the enrollee
�	submits a request for mediation under this section.
�	�������(e)��A dispute to be mediated under this chapter that does
�	not settle as a result of a teleconference conducted under
�	Subsection (d) must be conducted in the county in which the medical
�	services were rendered.
�	�������(f)��The enrollee may elect to participate in the mediation.
�	A mediation may not proceed without the consent of the enrollee. An
�	enrollee may withdraw the request for mediation at any time before
�	the mediation.
�	�������(g)��Notwithstanding Subsection (f), mediation may proceed
�	without the participation of the enrollee or the enrollee's
�	representative if the enrollee or representative is not present in
�	person or through teleconference.
�	�������Sec.�1467.055.��CONDUCT OF MEDIATION; CONFIDENTIALITY. (a)
�	A mediator may not impose the mediator's judgment on a party about
�	an issue that is a subject of the mediation.
�	�������(b)��A mediation session is under the control of the
�	mediator.
�	�������(c)��Except as provided by this chapter, the mediator must
�	hold in strict confidence all information provided to the mediator
�	by a party and all communications of the mediator with a party.
�	�������(d)��If the enrollee is participating in the mediation in
�	person, at the beginning of the mediation the mediator shall inform
�	the enrollee that if the enrollee is not satisfied with the mediated
�	agreement, the enrollee may file a complaint with:
�	�������������(1)��the Texas Medical Board against the facility-based
�	physician for improper billing; and
�	�������������(2)��the department for unfair claim settlement
�	practices.
�	�������(e)��A party must have an opportunity during the mediation to
�	speak and state the party's position.
�	�������(f)��Except on the agreement of the participating parties, a
�	mediation may not last more than four hours.
�	�������(g)��Except at the request of an enrollee, a mediation shall
�	be held not later than the 180th day after the date of the request
�	for mediation.
�	�������(h)��On receipt of notice from the department that an
�	enrollee has made a request for mediation that meets the
�	requirements of this chapter, the facility-based physician may not
�	pursue any collection effort against the enrollee who has requested
�	mediation for amounts other than copayments, deductibles, and
�	coinsurance before the earlier of:
�	�������������(1)��the date the mediation is completed; or
�	�������������(2)��the date the request to mediate is withdrawn.
�	�������(i)��A service provided by a facility-based physician may not
�	be summarily disallowed. This subsection does not require an
�	insurer or administrator to pay for an uncovered service.
�	�������(j)��A mediator may not testify in a proceeding, other than a
�	proceeding to enforce this chapter, related to the mediation
�	agreement.
�	�������Sec.�1467.056.��MATTERS CONSIDERED IN MEDIATION; AGREED
�	RESOLUTION. (a) In a mediation under this chapter, the parties
�	shall:
�	�������������(1)��evaluate whether:
�	�������������������(A)��the amount charged by the facility-based
�	physician for the medical service or supply is excessive; and
�	�������������������(B)��the amount paid by the insurer or
�	administrator represents the usual and customary rate for the
�	medical service or supply or is unreasonably low; and
�	�������������(2)��as a result of the amounts described by
�	Subdivision (1),�determine the amount, after copayments,
�	deductibles, and coinsurance are applied, for which an enrollee is
�	responsible to the facility-based physician.
�	�������(b)��The facility-based physician may present information
�	regarding the amount charged for the medical service or supply. The
�	insurer or administrator may present information regarding the
�	amount paid by the insurer.
�	�������(c)��Nothing in this chapter prohibits mediation of more than
�	one claim between the parties during a mediation.
�	�������(d)��The goal of the mediation is to reach an agreement among
�	the enrollee, the facility-based physician, and the insurer or
�	administrator, as applicable, as to the amount paid by the insurer
�	or administrator to the facility-based physician, the amount
�	charged by the facility-based physician, and the amount paid to the
�	facility-based physician by the enrollee.
�	�������Sec.�1467.057.��NO AGREED RESOLUTION. (a) The mediator of
�	an unsuccessful mediation under this chapter shall report the
�	outcome of the mediation to the department, the Texas Medical
�	Board, and the chief administrative law judge.
�	�������(b)��The chief administrative law judge shall enter an order
�	of referral of a matter reported under Subsection (a) to a special
�	judge under Chapter 151, Civil Practice and Remedies Code, that:
�	�������������(1)��names the special judge on whom the parties agreed
�	or appoints the special judge if the parties did not agree on a
�	judge;
�	�������������(2)��states the issues to be referred and the time and
�	place on which the parties agree for the trial;
�	�������������(3)��requires each party to pay the party's
�	proportionate share of the special judge's fee; and
�	�������������(4)��certifies that the parties have waived the right
�	to trial by jury.
�	�������(c)��A trial by the special judge selected or appointed as
�	described by Subsection (b) must proceed under Chapter 151, Civil
�	Practice and Remedies Code, except that the special judge's verdict
�	is not relevant or material to any other balance bill dispute and
�	has no precedential value.
�	�������(d)��Notwithstanding any other provision of this section,
�	Section 151.012, Civil Practice and Remedies Code, does not apply
�	to a mediation under this chapter.
�	�������Sec.�1467.058.��CONTINUATION OF MEDIATION. After a referral
�	is made under Section 1467.057, the facility-based physician and
�	the insurer or administrator may elect to continue the mediation to
�	further determine their responsibilities. Continuation of
�	mediation under this section does not affect the amount of the
�	billed charge to the enrollee.
�	�������Sec.�1467.059.��MEDIATION AGREEMENT. The mediator shall
�	prepare a confidential mediation agreement and order that states:
�	�������������(1)��the total amount for which the enrollee will be
�	responsible to the facility-based physician, after copayments,
�	deductibles, and coinsurance; and
�	�������������(2)��any agreement reached by the parties under Section
�	1467.058.
�	�������Sec.�1467.060.��REPORT OF MEDIATOR. The mediator shall
�	report to the commissioner and the Texas Medical Board:
�	�������������(1)��the names of the parties to the mediation; and
�	�������������(2)��whether the parties reached an agreement or the
�	mediator made a referral under Section 1467.057.
�	[Sections 1467.061-1467.100 reserved for expansion]
�	SUBCHAPTER C. BAD FAITH MEDIATION
�	�������Sec.�1467.101.��BAD FAITH. (a) The following conduct
�	constitutes bad faith mediation for purposes of this chapter:
�	�������������(1)��failing to participate in the mediation;
�	�������������(2)��failing to provide information the mediator
�	believes is necessary to facilitate an agreement; or
�	�������������(3)��failing to designate a representative
�	participating in the mediation with full authority to enter into
�	any mediated agreement.
�	�������(b)��Failure to reach an agreement is not conclusive proof of
�	bad faith mediation.
�	�������(c)��A mediator shall report bad faith mediation to the
�	commissioner or the Texas Medical Board, as appropriate, following
�	the conclusion of the mediation.
�	�������Sec.�1467.102.��PENALTIES. (a) Bad faith mediation, by a
�	party other than the enrollee, is grounds for imposition of an
�	administrative penalty by the regulatory agency that issued a
�	license or certificate of authority to the party who committed the
�	violation.
�	�������(b)��Except for good cause shown, on a report of a mediator
�	and appropriate proof of bad faith mediation, the regulatory agency
�	that issued the license or certificate of authority shall impose an
�	administrative penalty.
�	[Sections 1467.103-1467.150 reserved for expansion]
�	SUBCHAPTER D. COMPLAINTS; CONSUMER PROTECTION
�	�������Sec.�1467.151.��CONSUMER PROTECTION; RULES. (a) The
�	commissioner and the Texas Medical Board, as appropriate, shall
�	adopt rules regulating the investigation and review of a complaint
�	filed that relates to the settlement of an out-of-network health
�	benefit claim that is subject to this chapter. The rules adopted
�	under this section must:
�	�������������(1)��distinguish among complaints for out-of-network
�	coverage or payment and give priority to investigating allegations
�	of delayed medical care;
�	�������������(2)��develop a form for filing a complaint and
�	establish an outreach effort to inform enrollees of the
�	availability of the claims dispute resolution process under this
�	chapter;
�	�������������(3)��ensure that a complaint is not dismissed without
�	appropriate consideration;
�	�������������(4)��ensure that enrollees are informed of the
�	availability of mandatory mediation; and
�	�������������(5)��require the administrator to include a notice of
�	the claims dispute resolution process available under this chapter
�	with the explanation of benefits sent to an enrollee.
�	�������(b)��The department and the Texas Medical Board shall
�	maintain information:
�	�������������(1)��on each complaint filed that concerns a claim or
�	mediation subject to this chapter; and
�	�������������(2)��related to a claim that is the basis of an enrollee
�	complaint, including:
�	�������������������(A)��the type of services that gave rise to the
�	dispute;
�	�������������������(B)��the type and specialty of the facility-based
�	physician who provided the out-of-network service;
�	�������������������(C)��the county and metropolitan area in which the
�	medical service or supply was provided;
�	�������������������(D)��whether the medical service or supply was for
�	emergency care; and
�	�������������������(E)��any other information about:
�	�������������������������(i)��the insurer or administrator that the
�	commissioner by rule requires; or
�	�������������������������(ii)��the physician that the Texas Medical
�	Board by rule requires.
�	�������(c)��The information collected and maintained by the
�	department and the Texas Medical Board under Subsection (b)(2) is
�	public information as defined by Section 552.002, Government Code,
�	and may not include personally identifiable information or medical
�	information.
�	�������(d)��A facility-based physician who fails to provide a
�	disclosure under Section 1467.051 is not subject to discipline by
�	the Texas Medical Board for that failure and a cause of action is
�	not created by a failure to disclose as required by Section
�	1467.051.
�	�������SECTION�2.��Subchapter A, Chapter 1301, Insurance Code, is
�	amended by adding Section 1301.0055 to read as follows:
�	�������Sec.�1301.0055.��NETWORK ADEQUACY STANDARDS. The
�	commissioner shall by rule adopt network adequacy standards that:
�	�������������(1)��are adapted to local markets in which an insurer
�	offering a preferred provider benefit plan operates;
�	�������������(2)��ensure availability of, and accessibility to, a
�	full range of contracted physicians and health care providers to
�	provide health care services to insureds; and
�	�������������(3)��on good cause shown, may allow departure from
�	local market network adequacy standards if the commissioner posts
�	on the department's Internet website the name of the preferred
�	provider plan, the insurer offering the plan, and the affected
�	local market.
�	�������SECTION�3.��Section 1456.004, Insurance Code, is amended by
�	adding Subsection (c) to read as follows:
�	�������(c)��A facility-based physician who bills a patient covered
�	by a preferred provider benefit plan or a health benefit plan under
�	Chapter 1551 that does not have a contract with the facility-based
�	physician shall send a billing statement to the patient with
�	information sufficient to notify the patient of the mandatory
�	mediation process available under Chapter 1467 if the amount for
�	which the enrollee is responsible, after copayments, deductibles,
�	and coinsurance, including the amount unpaid by the administrator
�	or insurer, is greater than $1,000.
�	�������SECTION�4.��Section 324.001, Health and Safety Code, is
�	amended by adding Subsection (8) to read as follows:
�	�������������(8)��"Facility-based physician" means a radiologist,
�	an anesthesiologist, a pathologist, an emergency department
�	physician, or a neonatologist.
�	�������SECTION�5.��Section 324.101(a), Health and Safety Code, is
�	amended to read as follows:
�	�������(a)��Each facility shall develop, implement, and enforce
�	written policies for the billing of facility health care services
�	and supplies.��The policies must address:
�	�������������(1)��any discounting of facility charges to an
�	uninsured consumer, subject to Chapter 552, Insurance Code;
�	�������������(2)��any discounting of facility charges provided to a
�	financially or medically indigent consumer who qualifies for
�	indigent services based on a sliding fee scale or a written charity
�	care policy established by the facility and the documented income
�	and other resources of the consumer;
�	�������������(3)��the providing of an itemized statement required by
�	Subsection (e);
�	�������������(4)��whether interest will be applied to any billed
�	service not covered by a third-party payor and the rate of any
�	interest charged;
�	�������������(5)��the procedure for handling complaints; [and]
�	�������������(6)��the providing of a conspicuous written disclosure
�	to a consumer at the time the consumer is first admitted to the
�	facility or first receives services at the facility that:
�	�������������������(A)��provides confirmation whether the facility
�	is a participating provider under the consumer's third-party payor
�	coverage on the date services are to be rendered based on the
�	information received from the consumer at the time the confirmation
�	is provided; [and]
�	�������������������(B)��informs consumers [the consumer] that a
�	facility-based physician [or other health care provider] who may
�	provide services to the consumer while the consumer is in the
�	facility may not be a participating provider with the same
�	third-party payors as the facility;
�	�������������������(C)��informs consumers that the consumer may
�	receive a bill for medical services from a facility-based physician
�	for the amount unpaid by the consumer's health benefit plan;
�	�������������������(D)��informs consumers that the consumer may
�	request a listing of facility-based physicians who have been
�	granted medical staff privileges to provide medical services at
�	the facility; and
�	�������������������(E)��informs consumers that the consumer may
�	request information from a facility-based physician on whether the
�	physician has a contract with the consumer's health benefit plan
�	and under what circumstances the consumer may be responsible for
�	payment of any amounts not paid by the consumer's health benefit
�	plan;
�	�������������(7)��the requirement that a facility provide a list, on
�	request, to a consumer to be admitted to, or who is expected to
�	receive services from, the facility, that contains the name and
�	contact information for each facility-based physician or
�	facility-based physician group that has been granted medical staff
�	privileges to provide medical services at the facility; and
�	�������������(8)��if the facility operates a website that includes a
�	listing of physicians who have been granted medical staff
�	privileges to provide medical services at the facility, the posting
�	on the facility's website of a list that contains the name and
�	contact information for each facility-based physician or
�	facility-based physician group that has been granted medical staff
�	privileges to provide medical services at the facility and the
�	updating of the list in any calendar quarter in which there are any
�	changes to the list.
�	�������SECTION�6.��(a) �Except as provided by Subsection (b), this
�	Act applies only to a health benefit claim filed on or after the
�	effective date of this Act. A claim filed before the effective date
�	of this Act 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.
�	�������(b)��Section 1467.002(2), Insurance Code, as added by this
�	Act, applies to a health benefit claim filed under a group policy or
�	contract executed under Chapter 1551, Insurance Code, on or after
�	September 1, 2010. A claim filed under a group policy or contract
�	executed under Chapter 1551, Insurance Code, before September 1,
�	2010, is governed by the law as it existed immediately before
�	September 1, 2010, and that law is continued in effect for that
�	purpose.
�	�������SECTION�7.��As soon as practicable after the effective date
�	of this Act, the commissioner of insurance, Texas Medical Board,
�	and chief administrative law judge of the State Office of
�	Administrative Hearings shall adopt rules as necessary to implement
�	and enforce this Act.
�	�������SECTION�8.��This Act takes effect immediately if it receives
�	a vote of two-thirds of all the members elected to each house, as
�	provided by Section 39, Article III, Texas Constitution. If this
�	Act does not receive the vote necessary for immediate effect, this
�	Act takes effect September 1, 2009.
�
�
�	______________________________	______________________________
�	���President of the Senate	Speaker of the House�����
�
�
�	�������I certify that H.B. No. 2256 was passed by the House on May
�	11, 2009, by the following vote:��Yeas 139, Nays 2, 3 present, not
�	voting; and that the House concurred in Senate amendments to H.B.
�	No. 2256 on May 29, 2009, by the following vote:��Yeas 136, Nays 1,
�	4 present, not voting.
�
�	______________________________
�	Chief Clerk of the House���
�
�	�������I certify that H.B. No. 2256 was passed by the Senate, with
�	amendments, on May 27, 2009, by the following vote:��Yeas 31, Nays
�	0.
�
�	______________________________
�	Secretary of the Senate���
�	APPROVED: __________________
�	����������������Date�������
�	�
�	�������� __________________
�	��������������Governor�������