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You are here: Home . rules . 2003 . 0815D-059
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Subcapter X. Preferred Provider Plans

The Commissioner of Insurance adopts on an emergency basis, to take effect on August 16, 2003 , amendments to §3.3703, concerning required contracting provisions for preferred provider plans. The emergency adoption is necessary to comply with and implement the provisions and the intent of Senate Bill 418 (SB 418) (78 th regular legislative session) within the statutory timetable prescribed by SB 418. The amendments to §3.3703 relate to the coding guidelines and other claims payment information that a preferred provider carrier must supply upon request from a preferred provider pursuant to a preferred provider contract subject to Texas Insurance Code Art. 3.70-3C.

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, TDI 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 §3.3703, subsection (a)(20) and (a)(20)(F) delete outdated compliance language. The amendments to subsection (a)(20)(A) require that disclosed bundling processes be consistent with nationally recognized and generally accepted bundling edits and logic; they also add the publisher, product name and version of any software the insurer uses to determine bundling and unbundling of claims to the list of information to be disclosed. The amendments to subsection (a)(20)(D) require the insurer to give 90 calendar days written notice of any changes to claims payment procedures, and provide that an insurer may not make retroactive changes to claims payment procedures or any of the information required to be provided by paragraph (20). Subsection (a)(20)(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.

Subsection (a)(20)(H) allows a preferred provider that receives information under the disclosure requirements to terminate its contract with an insurer, on or before the 30 th day after the date the preferred provider receives the information, without penalty or discrimination in participation in other products or plans so long as proper notice is given to insureds in compliance with existing law. Subsection (a)(20)(I) provides that the provisions of this paragraph may not be waived, voided, or nullified by contract. Subsection (a)(21) provides that an insurer may require a preferred provider to retain in that 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 Article 3.70-3C 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. Article 3.70-3C, Section 3A(p) gives the Commissioner the authority to adopt rules as necessary to implement Article 3.70-3C, Section 3A. Article 3.70-3C, Section 3A(m) states that an insurer´s claims payment processes shall be consistent with nationally recognized, generally accepted bundling edits and logic . Article 3.70-3C, Section 3F provides in part that an insurer may require a physician or provider to retain in the physician´s or provider´s records updated information concerning other health benefit plan coverage. Article 3.70-3C, Section 3H 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 insurer and a physician or provider. Article 3.70-3C, Section 6(e)(2) provides that a preferred provider that voluntarily terminates the preferred provider´s relationship with the insurer shall provide notice to insureds of the termination, with the assistance of the insurer. 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.

§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) ­ (19) (No change.)

(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 30 th day after the date the preferred provider receives the requested information 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.

(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.



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