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You are here: Home . rules . 2003 . 0815B-059
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SUBCHAPTER J. Physician and Provider Contracts and Arrangements

The Commissioner of Insurance adopts on an emergency basis, to take effect on August 16, 2003 , amendments to §11.901 concerning required contracting provisions for health maintenance organizations (HMOs). The emergency adoption is necessary to comply with and implement the provisions and intent of Senate Bill 418 (SB 418) (78 th regular legislative session) within the statutory timetable prescribed by SB 418. The amendments to §11.901 relate to the coding guidelines and other claims payment information that an HMO must supply upon request from a physician or provider pursuant to an HMO contract subject to Texas Insurance Code Chapter 843, Subchapter J.

Pursuant to SB 418, several provisions become effective 60 days after the effective date of the statute, June 17, 2003 , rendering these provisions effective on August 16, 2003 . SB 418 further provides that the Commissioner of Insurance may adopt emergency rules to implement this Act without making the finding in subsection (a), Section 2001.034, Government Code. An emergency adoption is warranted so that rules are in place on the effective date of certain provisions of the statute, to facilitate the uniform implementation of these amendments, and to guide affected parties´ compliance with the new statutory requirements. SB 418 requires the commissioner, not later than 90 days after the Act´s effective date, to adopt rules to implement the Act. It also requires that the commissioner appoint a "technical advisory committee on claims processing" (TACCP) and to consult with the TACCP with respect to, among other things, "the implementation of the standardized coding and bundling edits and logic" before adopting any rule related to such subjects. Following consultation with the TACCP, as well as with the Clean Claims Working Group, the Texas Department of Insurance on July 4, 2003 proposed for public comment rules to implement most of the requirements of SB 418, and held a public hearing on the rules on August 7, 2003 . More than 150 comments were received on the proposal. While the department intends to adopt final rules in the near future, the usual process of rule adoption and its associated notice and comment periods, as well as the need to respond to comments, would have required a timeframe that could not be completed prior to the date affected entities must begin complying with certain provisions of the new statute. Considering these facts, it is necessary to adopt these amendments on an emergency basis to ensure that physicians and providers are paid timely for their services and to promote regulatory compliance.

The amendments to §11.901, paragraphs (10) and (10)(F) delete outdated compliance language. The amendments to paragraph (10)(A)(iii) and (iv) require that disclosed bundling processes be consistent with nationally recognized and generally accepted bundling edits and logic and add the publisher, product name and version of any software the HMO uses to determine bundling and unbundling of claims to the list of information to be disclosed. The amendments to paragraph (10)(D) require the HMO to give 90 calendar days written notice of any changes to claims payment procedures, 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). 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 amendments to that paragraph also replace the term "verification" with "representation" to avoid confusion with the verification provisions established pursuant to SB 418.

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. Paragraph (10)(I) provides that the provisions of this paragraph may not be waived, voided, or nullified by contract. Paragraph (11) provides that an HMO may require a contracting physician or provider to retain in that physician´s or provider´s records updated information concerning a patient´s other health benefit plan coverage.

The sections are adopted on an emergency basis under SB 418, Government Code §2001.034, and Insurance Code §§843.309, 843.319, 843.341, 843.349 and 36.001. SB 418 provides that the commissioner shall adopt rules as necessary to implement that Act, including emergency adoption of rules pursuant to §2001.034 of the Government Code without a finding described in subsection (a) of that provision. Government Code §2001.034 provides for the adoption of administrative rules on an emergency basis without notice and comment. 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 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) ­ (9) (No change.)

(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, 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 requested 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.



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