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Texas Department of Insurance
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Subchapter T. Submission of Clean Claims


The Texas Department of Insurance (the department) proposes new §21.2820 concerning identification (ID) cards issued by health maintenance organizations (HMOs) or insurers who issue preferred provider benefit plans. The new section is the result of Senate Bill (SB) 418, 78th Regular Legislative Session, which contained numerous provisions regarding the prompt payment of claims by HMOs and preferred provider carriers (hereinafter collectively "carriers"). Among other things, SB 418 added new Texas Insurance Code Art. 3.70-3C, Sec. 11, and §843.209 regarding carrier ID cards.

As allowed by SB 418, the department adopted §21.2820 on an emergency basis effective August 16, 2003 , which was the date that certain provisions of SB 418 went into effect. That emergency section is still in effect but will be withdrawn at the time this proposal, after notice and comment, is adopted.

Article 3.70-3C, Sec. 11, and §843.209 basically contain provisions concerning ID cards issued by carriers regulated under the Insurance Code and subject to the provisions of SB 418. These provisions state that carriers that issue ID cards must display certain information on the cards, including the date the insured or enrollee first became enrolled or a toll-free number a physician and provider may use to get that information. The proposed section accordingly requires carriers to display the first date of coverage or, in the alternative, to give a toll-free number and to make clear to the provider, by a statement or other indication, that the number may be used to obtain this information. Because these provisions only apply to carriers and health plans subject to SB 418, they also contemplate that such cards identify applicability of the statute. Therefore, the proposal also requires that the letters "TDI" or "DOI" be prominently displayed on the front of the card. Finally, the proposal states that the requirements of the section apply to any HMO evidence of coverage or preferred provider benefit plan issued or renewed on or after January 1, 2004 . The department believes that the proposal implements the ID card provisions of SB 418 consistent with the law´s intent that the cards be as uniform and useful as possible for enrollees, insureds, carriers, and physicians and providers.

The department has discussed the provisions of this proposal with the Technical Advisory Committee on Claims Processing (TACCP) appointed by the commissioner of insurance pursuant to SB 418, and has drafted the proposal after receiving comments from members of the TACCP. In particular, because some carriers expressed concern that numerous states would impose the requirement that ID cards identify state-regulated health plans, the proposal allows carriers to choose to use the less Texas-specific term "DOI" (for "Department of Insurance") to alleviate those concerns.

It should be noted that the proposed sections do not require carriers to issue ID cards, but rather prescribe the limited information that must be included where the carrier has made the decision to issue ID cards. Carriers are free to make this determination, as well as to include other information that may be of use in processing verification requests or claims. See, for example, adopted §§19.1724(d)(2), (4), and (10); 21.2803(b)(2)(KK). In addition, because a slightly different emergency rule has been in effect since August 16, 2003 (requiring that ID cards contain a symbol consisting of a star containing the letters "TDI"), any plans that have already printed cards containing the symbol as required by the emergency rule will be deemed to be in compliance with the final rule adopted by the department.

Kimberly Stokes, Senior Associate Commissioner for Life, Health and Licensing, has determined that for each year of the first five years the proposed section will be in effect there will be no fiscal impact to state and local governments as a result of the enforcement and administration of the rule. There will be no measurable effect on local employment or the local economy as a result of the proposal.

Ms. Stokes has determined that for each year of the first five years the section is in effect, the public benefits anticipated as a result of proposed §21.2820 will be the provision of, or access to, information concerning first date of coverage, which will assist carriers, physicians and providers, and enrollees and insureds with determinations regarding coverage for pre-existing conditions. The proposal also provides greater clarity for physicians and providers as to which patients´ health plans are subject to the requirements and protections of SB 418. That section will also benefit insureds and enrollees by informing them as to whether their plan is regulated by the department and subject to the provisions relating to prompt payment of claims. Any cost to persons required to comply with this section for each of the first five years the proposed amendments will be in effect is the result of the enactment of SB 418 and not the result of the adoption, enforcement, or administration of the sections; however, because the department discussed compliance costs with several carriers, and because the issue was also discussed by participants at TACCP meetings, the following cost information is provided. According to TACCP participants, the cost for carriers to print new ID cards ranges from $.47 to $1.00 per card, depending upon whether the printing is done by an outside vendor or by the carrier in-house. The lower cost could increase when distribution is factored in, while the higher cost includes the cost of distribution. In addition, one carrier estimated the cost at $3.00 per card, when reprogramming costs were added to the costs of printing and distribution. Although the cost per card could be higher for carriers that meet the definition of small or micro-businesses, depending upon which means they used to print the cards, the department does not believe it would be legal or feasible to waive or reduce the requirements of the proposed rule for these carriers, for the following reasons. First, the dep artment has already attempted to mitigate potential costs and administrative changes associated with printing new cards by making this provision applicable to plans and evidences of coverage issued or renewed on or after January 1, 2004 . This provision was contained in the emergency rules and has been in effect since August 16, 2003 . Second, in response to some carriers´ contention that the star symbol requirement in the emergency rules would increase costs, the proposal allows for use of the less costly letters "TDI" or "DOI." Finally, establishing separate requirements or exempting small or micro-businesses from the rule would unfairly deprive that entity´s insureds, enrollees, physicians, and providers of the benefits of SB 418 concerning ID cards.

To be considered, written comments on the proposal must be submitted no later than 5:00 p.m. on December 1, 2003 , to Gene C. Jarmon, General Counsel and Chief Clerk, Mail Code 113-2A, Texas Department of Insurance, P. O. Box 149104 , Austin , Texas 78714-9104 . An additional copy of the comment must be simultaneously submitted to Kimberly Stokes, Senior Associate Commissioner, Life, Health and Licensing Program, Mail Code 107-2A, Texas Department of Insurance, P.O. Box 149104 , Austin , Texas 78714-9104 . A request for a public hearing should be submitted separately to the Office of the Chief Clerk.

The amendments are proposed under the Texas Insurance Code Article 3.70-3C, Sec. 11, and §§36.001 and 843.209. Article 3.70-3C, Sec. 11, and §843.209 contain provisions concerning ID cards issued by carriers regulated under the Insurance Code and subject to the provisions of SB 418. Section 36.001 of the Insurance Code 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.

The following statutes are affected by this proposal: Insurance Code Art. 3.70-3C, Sec. 11, and §843.209

§21.2820. Identification Cards.

(a) An identification card, or other similar document that includes information necessary to allow enrollees and insureds to access services or coverage under an HMO evidence of coverage or a preferred provider benefit plan, that is issued by an HMO or preferred provider carrier subject to this subchapter pursuant to §21.2801 of this title (relating to Scope) shall comply with the requirements of this section.

(b) An identification card or other similar document issued to enrollees or insureds shall include the following information:

(1) the name of the enrollee or insured;

(2) the first date on which the enrollee or insured became eligible for benefits under the plan or a toll-free number and a statement or other indication that a preferred provider may obtain such information by calling the toll-free number; and

(3) the letters "TDI" or "DOI" prominently displayed on the front of the card.

(c) The requirements of this section apply to an HMO evidence of coverage or a preferred provider benefit plan issued or renewed on or after January 1, 2004 .

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