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You are here: Home . rules . 2004 . 0809-059
Archived File – for Reference Use.
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Subchapter CC. Electronic Health Care Transactions

28 TAC §21.3701

The Commissioner of Insurance adopts new Subchapter CC, §21.3701, concerning waiver of electronic filing requirements. The new section is adopted with changes to the proposed text as published in the May 7, 2004 issue of the Texas Register (29 TexReg 4411).

The new section is necessary to implement the provisions of Senate Bill (SB) 418, 78 th Regular Legislative Session. Specifically, SB 418 added Insurance Code Article 21.52Z, which ensures that carriers that wish to implement an electronic filing requirement for contracted physicians and providers include a process by which a physician or provider may seek a waiver of the requirement.

Changes have been made to the proposed section as published; however, the changes do not introduce new subject matter or affect additional persons than those subject to the proposal as originally published. In response to comments, the department has clarified that a physician or provider may begin submitting non-electronic claims upon the submission of a request for a waiver to a carrier and the physician or provider may continue to submit such non-electronic claims until a final determination on the request is made. In addition, subsection (d) has been revised to clarify that a waiver for a catastrophic event or systems failure applies for a specific, finite period of time during which such event substantially interferes with the business operations of the physician or provider. The department deleted the reference to "issuer of the health benefit plan" from subsection (d) to clarify that a catastrophic event or systems failure that substantially interferes with the business operations of the issuer of a health benefit plan does not permit a physician or provider to submit non-electronic claims. Also, the department corrected a typographical error in subsection (d). The department revised subsection (e) to clarify that any of the subsection´s listed circumstances allow a waiver to be requested. The department also corrected a grammatical error in subsection (j), paragraph (1). Finally, the department changed the applicability date in subsection (p).

Adopted §21.3701 identifies the criteria that must be used by a carrier in considering a physician´s or provider´s request for a waiver of a carrier´s electronic filing requirements. It also provides physicians and providers with the ability to submit claims non-electronically upon submission of a request for a waiver until a final determination is made. Finally, the section addresses the statutory opportunity for appellate review by the commissioner by providing a procedure for appeal to the Deputy Commissioner of the HMO Division and ultimately to the Senior Associate Commissioner of Life, Health and Licensing in the event that a carrier does not grant a waiver or imposes restrictions, conditions or limitations on a waiver.

SUMMARY OF COMMENTS AND AGENCY´S RESPONSE TO COMMENTS

14-Day Time Frame to Respond

Comment: A commenter suggests changing the time frame within which to appeal an insurer´s waiver determination from 14 days to 30 days to make the appeal period practical in light of the hectic pace of most medical practices. The commenter also recommends adding a new subsection which allows physicians to "retain the right" to file the required electronic transactions in a non-electronic format until a final determination has been made.

Agency Response: The department has changed the rule to clarify that a physician or provider may begin submitting non-electronic claims upon the submission of a request for a waiver to a carrier, and the physician or provider may continue to do so until a final determination on the request is made. Because a physician or provider may file non-electronically while a request for a waiver is pending, the department declines to make the suggested change regarding the time limits for appealing a waiver determination. All parties involved in the process are given 14 days to respond in an effort to complete the process as quickly and efficiently as possible.

Reference to 42 C.F.R. § 424.32(d)(1)(viii)

Comment: A commenter suggests that the department provide additional guidance regarding the definition of "small physician and provider practices," either in the comments to the final rules or the final rules themselves, by referencing the Centers for Medicare and Medicaid Services´ (CMS´) Transmittal 44 or the specific discussion on what constitutes "small" to qualify for a waiver.

Agency Response: As stated in §21.3701(e)(2), the department is defining "small physician and provider practices" consistent with 42 C.F.R. § 424.32(d)(1)(viii). The department is referencing the content of CMS´ Transmittal 44 in this response to further clarify "small physician and provider practices." CMS´ Transmittal 44 (Pub. 100-04), with an implementation date of January 20, 2004, contains 1) new instructions for the mandatory electronic submission of Medicare claims based on the Administrative Simplification Compliance Act (ASCA), and 2) specific conditions under which a waiver may be granted for submission of electronic claims. Transmittal 44 details new Medicare Claims Processing Manual changes, which include a section entitled "Small Providers and Full-Time Equivalent Employee Assessments."

The concept of "employee" is addressed with an explanation that everyone on staff for whom a health care provider withholds taxes and files reports with the Internal Revenue Service using an Employer Identification Number (EIN) is considered an employee. Part-time employee hours must also be counted when calculating the number of FTEs employed by a provider. The Transmittal 44 attachment states that the EIN of a parent company may sometimes be used to file employee tax reports for multiple providers under multiple provider numbers. In that situation, it is acceptable to consider only those staff hours worked for a particular provider as identified by provider number, UPIN, or national provider identifier when implemented to determine the number of FTEs employed by that provider. It is acceptable to base the calculation of total FTEs by provider number on the number of hours each staff member contributes to the support of each separate provider by provider number.

The Transmittal 44 attachment says that although "small providers" qualify for waiver of the requirement that their claims be submitted to Medicare electronically, they are encouraged to submit electronic claims. They have the option to submit some of their claims to Medicare electronically and some non-electronically. It is important to note that the small provider exception for submission of paper claims does not apply to health care claim clearinghouses that are agents for electronic claim submission for small providers.

The department believes that its rules are consistent with CMS publications, and this response references Transmittal 44 with that consistency goal in mind. While CMS, and specifically Transmittal 44, may provide guidance concerning the meaning of "small providers" or other terms addressed in this rule, physicians and providers must ultimately comply with the department´s rules by seeking and obtaining waivers from the electronic claim filing requirements. For instance, a "small provider" must submit a waiver request as specified in §21.3701 regardless of whether CMS requires such a request.

Administrative Review

Comment: A commenter commends the department for providing two levels of administrative review at the department and participation in a hearing via telephone. The commenter notes that such a structure ensures that physicians are given every opportunity to make their case for a waiver from mandatory electronic transactions without causing undue absence from their practices and patients.

Agency Response: The department appreciates the comment.

NAMES OF THOSE COMMENTING FOR AND AGAINST THE SECTIONS

For, with changes: Texas Medical Association.

The new section is adopted under the Insurance Code Article 21.52Z, and §§31.041 and 36.001. Article 21.52Z requires that a contract between the issuer of a health benefit plan and a health care professional or health care facility provide for a waiver of any electronic submission requirement established under the article, and it allows the commissioner to adopt necessary implementation rules. Also, the article specifies that any health care professional or health care facility that is denied a waiver by a health benefit plan may appeal the denial to the commissioner, and the commissioner shall determine whether a waiver must be granted. The role of the Deputy Commissioner of the HMO Division and the Senior Associate Commissioner of Life, Health and Licensing in the new section´s appeal process stems from the commissioner´s authority, granted by §31.041, to delegate powers and duties to other personnel. 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.

§21.3701. Electronic Claims Filing Requirements.

(a) The purpose of this section is to implement Article 21.52Z of the Insurance Code. This section applies to a contract between an issuer of a health benefit plan and a health care professional or health care facility (hereinafter referred to as "physicians or providers").

(b) Consistent with Insurance Code Article 21.52Z and this section, the issuer of a health benefit plan may, by contract, require physicians and providers to electronically submit the following:

(1) health care claims or equivalent encounter information;

(2) referral certifications; and/or

(3) any authorization or eligibility transactions.

(c) An issuer of a health benefit plan must give 90 calendar days written notice prior to requiring electronic filing of any information described in subsection (b) of this section.

(d) A contract between the issuer of a health benefit plan and a physician or provider that requires electronic submission of any information described in subsection (b) of this section shall include a provision stating that in the event of a systems failure, or a catastrophic event as defined in §21.2803 of this title (relating to Definitions), that substantially interferes with the business operations of the physician or provider, the physician or provider may submit non-electronic claims in accordance with the requirements in this subchapter and for the number of calendar days during which substantial interference with business operations occurs as of the date of the catastrophic event or systems failure. A physician or provider shall provide written notice of the physician´s or provider´s intent to submit non-electronic claims to the issuer of the health benefit plan within five calendar days of the catastrophic event or systems failure.

(e) A contract between the issuer of a health benefit plan and a physician or provider that requires electronic submission of the information described in subsection (b) of this section shall include a provision allowing for a waiver of the electronic submission requirements in any of the following circumstances:

(1) No method available for the submission of claims in electronic form. This exception applies to situations in which the federal standards for electronic submissions (45 C.F.R., Parts 160 and 162) do not support all of the information necessary to process the claim.

(2) The operation of small physician and provider practices. This exception applies to those physicians and providers with fewer than ten full-time-equivalent employees, consistent with 42 C .F.R. § 424.32(d)(1)(viii).

(3) Demonstrable undue hardship, including fiscal or operational hardship.

(4) Any other special circumstances that would justify a waiver.

(f) The physician´s or provider´s request for a waiver must be in writing and must include documentation supporting the issuance of a waiver.

(g) Upon receipt of a request for a waiver from a physician or provider, the issuer of a health benefit plan shall, within 14 calendar days, issue or deny a waiver.

(h) A waiver or denial of a waiver must be issued in writing to the requesting physician or provider. A written waiver shall contain any restrictions, conditions or limitations related to the waiver. A written denial of a request for a waiver or the issuance of a qualified or conditional waiver shall include the reason for the denial or any restrictions, conditions or limitations, and notice of the physician´s or provider´s right to appeal the determination to the Texas Department of Insurance.

(i) A physician or provider that is denied a waiver of the electronic submission requirements, or granted a waiver with restrictions, conditions or limitations, may, within 14 calendar days of receipt, appeal the waiver determination. The request for appeal and accompanying documentation shall be sent to the Deputy Commissioner, HMO Division, P.O. Box 149104 , Austin , Texas 78714-9104 and to the issuer of the health benefit plan. The information shall include:

(1) the physician´s or provider´s initial request for a waiver sent to the issuer of the health benefit plan, including the documentation required by subsection (f) of this section;

(2) the waiver determination received from the issuer of the health benefit plan;

(3) any additional documentation supporting issuance of a waiver or removal of restrictions, conditions or limitations of a granted waiver; and

(4) any additional information necessary for the determination of the appeal.

(j) Upon receipt of notice of a request for appeal under this section, an issuer of a health benefit plan shall, within 14 calendar days, submit to the Deputy Commissioner of the HMO Division and to the physician or provider:

(1) documentation supporting the waiver determination issued to the physician or provider; and

(2) any additional information necessary for the determination of the appeal.

(k) The Deputy Commissioner of the HMO Division may request additional information from either party and may request the parties to appear at a hearing. Either party may choose to attend a hearing conducted at the department or participate in a hearing via telephone.

(l) Upon receipt of all information required by subsections (i) and (j) of this section, the Deputy Commissioner of the HMO Division shall issue a determination within 14 calendar days of the later of the receipt of all necessary information or the conclusion of the hearing.

(m) Either party may request a hearing before the Senior Associate Commissioner of the Life, Health and Licensing Program for reconsideration of the Deputy Commissioner of the HMO Division´s determination. Either party may choose to attend a hearing conducted at the department or participate in a hearing via telephone. A request for reconsideration must be received by the Senior Associate Commissioner at P.O. Box 149104 , Austin , Texas 78714-9104 within 14 calendar days of receiving notice of the appeal determination.

(n) The physician or provider requesting or receiving a waiver, appealing a waiver determination, or requesting reconsideration of an appeal determination under this section may elect to file the required electronic transactions in a non-electronic format until a final determination on the request is made.

(o) The issuer of a health benefit plan may not refuse to contract or to renew a contract with a physician or provider based in whole or in part on the physician or provider requesting or receiving a waiver, appealing a waiver determination, or requesting reconsideration of an appeal determination under this section.

(p) This section applies to:

(1) a contract between a physician or provider and an issuer of a health benefit plan that requires electronic submission of the information described in subsection (b) of this section and entered into or renewed on or after September 1, 2004; and

(2) existing contracts to the extent that any contract provisions related to electronic submission of the information described in subsection (b) of this section are made applicable to a physician or provider on or after September 1, 2004 .



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