Paul Prompt Payment Bill Lets Insurers Stop Their Own Clock

The text as introduced · 1,932 words

By: Paul
H.B. No. 4549

A BILL TO BE ENTITLED

AN ACT

relating to the prompt payment of health insurance claims.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Section 843.338, Insurance Code, is amended to

read as follows:

Sec. 843.338. DEADLINE FOR ACTION ON CLEAN CLAIMS. Except

as provided by Sections 843.3385 , 843.3405, and 843.339, not later

than the 45th day after the date on which a health maintenance

organization receives a clean claim from a participating physician

or provider in a nonelectronic format or the 30th day after the date

the health maintenance organization receives a clean claim from a

participating physician or provider that is electronically

submitted, the health maintenance organization shall make a

determination of whether the claim is payable and:

(1) if the health maintenance organization determines

the entire claim is payable, pay the total amount of the claim in

accordance with the contract between the physician or provider and

the health maintenance organization;

(2) if the health maintenance organization determines

a portion of the claim is payable, pay the portion of the claim that

is not in dispute and notify the physician or provider in writing

why the remaining portion of the claim will not be paid; or

(3) if the health maintenance organization determines

that the claim is not payable, notify the physician or provider in

writing why the claim will not be paid.

SECTION 2. Section 843.3405, is amended to read as follows:

Sec. 843.3405. INVESTIGATION AND DETERMINATION OF PAYMENT.

(a) Except as provided by Subsection (b), the [ The ] investigation

and determination of payment, including any coordination of other

payments, does not extend the period for determining whether a

claim is payable under Section 843.338 or 843.339 or for auditing a

claim under Section 843.340.

(b) An investigation and determination of payment shall

extend the period for determining whether a claim is payable or for

auditing a claim if:

(1) the health maintenance organization suspects that

the claim was submitted fraudulently or based on a

misrepresentation; and

(2) the investigation and determination are made in

good faith.

SECTION 3. Section 843.3385(e), Insurance Code, is amended

to read as follows:

(e) If a health maintenance organization requests an

attachment or other information from a person other than the

participating physician or provider who submitted the claim, the

health maintenance organization , not later than the 30th calendar

day after the insurer receives a clean claim, shall provide notice

containing the name of the physician or provider from whom the

health maintenance organization is requesting information to the

physician or provider who submitted the claim. A health

maintenance organization that requests an attachment under this

subsection shall determine whether the claim is payable on or

before the later of the 15th day after the date the insurer receives

the requested attachment or the latest date for determining whether

the claim is payable under Section 1301.103 or 1301.104. [ The

health maintenance organization may not withhold payment pending

receipt of an attachment or information requested under this

subsection. If on receiving an attachment or information requested

under this subsection the health maintenance organization

determines that there was an error in payment of the claim, the

health maintenance organization may recover any overpayment under

Section 843.350. ]

SECTION 4. Section 843.343, Insurance Code, is amended to

read as follows:

Sec. 843.343. ATTORNEY'S FEES. A physician or provider may

recover reasonable attorney's fees and court costs in an action to

recover payment under this subchapter only when a health

maintenance organization has acted in bad faith in making the

payment determination .

SECTION 5. Section 843.350, Insurance Code, is amended by

amending Subsection (a) and adding Subsection (c) to read as

follows:

(a) Except as provided by Subsection (c), a [ A ] health

maintenance organization may recover an overpayment to a physician

or provider if:

(1) not later than the one year [ the 180th day ] after

the date the physician or provider receives the payment, the health

maintenance organization provides written notice of the

overpayment to the physician or provider that includes the basis

and specific reasons for the request for recovery of funds; and

(2) the physician or provider does not make

arrangements for repayment of the requested funds on or before the

45th day after the date the physician or provider receives the

notice.

(c) A health maintenance organization may recover an

overpayment to a physician or health care provider at any time if

the claim was submitted fraudulently or based on a

misrepresentation.

SECTION 6. Section 843.342, Insurance Code, is amended by

amending Subsections (h) and (n) to read as follows:

(h) A health maintenance organization is not liable for a

penalty under this section:

(1) if the failure to pay the claim in accordance with

this subchapter is a result of a catastrophic event and:

(A) the commissioner published a notice allowing

an extension of the applicable prompt payment deadlines due to the

catastrophic event; or

(B) the department approved the health

maintenance organization's request for an extension due to the

substantial interference of the catastrophic event with the normal

business operations of the health maintenance organization; or

(2) if the claim was not paid or paid in accordance

with this subchapter, but for less than the contracted rate, and:

(A) the physician or provider notifies the health

maintenance organization of the underpayment after the 270th day

after the date the underpayment was received; and

(B) the health maintenance organization pays the

balance of the claim on or before the 30th day after the date the

health maintenance organization receives the notice.

(n) In this section :

(1) "Institutional [ , "institutional ] provider" means

a hospital or other medical or health-related service facility that

provides care for the sick or injured or other care that may be

covered in an evidence of coverage ; and

(2) "Billed charges" means the lowest rate the

preferred provider will accept directly from a patient as payment

in full for the services.

SECTION 7. Section 1301.103, Insurance Code, is amended to

read as follows:

Sec. 1301.103. DEADLINE FOR ACTION ON CLEAN CLAIMS. Except

as provided by Sections 1301.104 , 1301.1053, and 1301.1054, not

later than the 45th day after the date an insurer receives a clean

claim from a preferred provider in a nonelectronic format or the

30th day after the date an insurer receives a clean claim from a

preferred provider that is electronically submitted, the insurer

shall make a determination of whether the claim is payable and:

(1) if the insurer determines the entire claim is

payable, pay the total amount of the claim in accordance with the

contract between the preferred provider and the insurer;

(2) if the insurer determines a portion of the claim is

payable, pay the portion of the claim that is not in dispute and

notify the preferred provider in writing why the remaining portion

of the claim will not be paid; or

(3) if the insurer determines that the claim is not

payable, notify the preferred provider in writing why the claim

will not be paid.

SECTION 8. Section 1301.1053, Insurance Code, is amended to

read as follows:

Sec. 1301.1053. DEADLINES NOT EXTENDED. (a) Except as

provided by Subsection (b), the [ The ] investigation and

determination of payment, including any coordination of other

payments, does not extend the period for determining whether a

claim is payable under Section 1301.103 or 1301.104 or for auditing

a claim under Section 1301.105.

(b) An investigation and determination of payment shall

extend the period for determining whether a claim is payable or for

auditing a claim if:

(1) the insurer suspects that the claim was submitted

fraudulently or based on a misrepresentation; and

(2) the investigation and determination are made in

good faith.

SECTION 9. Section 1301.1054(d), Insurance Code, is amended

to read as follows:

(d) If an insurer requests an attachment or other

information from a person other than the preferred provider who

submitted the claim, the insurer , not later than the 30th calendar

day after the insurer receives a clean claim, shall provide notice

containing the name of the physician or health care provider from

whom the insurer is requesting information to the preferred

provider who submitted the claim. An insurer that requests an

attachment under this subsection shall determine whether the claim

is payable on or before the later of the 15th day after the date the

insurer receives the requested attachment or the latest date for

determining whether the claim is payable under Section 1301.103 or

1301.104. [ The insurer may not withhold payment pending receipt of

an attachment or information requested under this subsection. If

on receiving an attachment or information requested under this

subsection the insurer determines that there was an error in

payment of the claim, the insurer may recover any overpayment under

Section 1301.132. ]

SECTION 10. Section 1301.108, Insurance Code, is amended to

read as follows:

Sec. 1301.108. ATTORNEY'S FEES. A preferred provider may

recover reasonable attorney's fees and court costs in an action to

recover payment under this subchapter only when an insurer has

acted in bad faith in making the payment determination .

SECTION 11. Section 1301.132, Insurance Code, is amended by

amending Subsection (a) and adding Subsection (c) to read as

follows:

(a) Except as provided by Subsection (c), an [ An ] insurer

may recover an overpayment to a physician or health care provider

if:

(1) not later than one year [ the 180th day ] after the

date the physician or provider receives the payment, the insurer

provides written notice of the overpayment to the physician or

provider that includes the basis and specific reasons for the

request for recovery of funds; and

(2) the physician or provider does not make

arrangements for repayment of the requested funds on or before the

45th day after the date the physician or provider receives the

notice.

(c) An insurer may recover an overpayment to a physician or

health care provider at any time if the claim was submitted

fraudulently or based on a misrepresentation.

SECTION 12. Section 1301.137, Insurance Code, is amended by

amending Subsection (h) and adding Subsection (m) to read as

follows:

(h) An insurer is not liable for a penalty under this

section:

(1) if the failure to pay the claim in accordance with

Subchapter C is a result of a catastrophic event and:

(A) the commissioner published a notice allowing

an extension of the applicable prompt payment deadlines due to the

catastrophic event; or

(B) the department approved the insurer's

request for an extension due to the substantial interference of the

catastrophic event with the normal business operations of the

insurer; or

(2) if the claim was not paid or paid in accordance

with Subchapter C, but for less than the contracted rate, and:

(A) the preferred provider notifies the insurer

of the underpayment after the 270th day after the date the

underpayment was received; and

(B) the insurer pays the balance of the claim on

or before the 30th day after the date the insurer receives the

notice.

(m) In this section, "billed charges" means the lowest rate

the preferred provider will accept directly from a patient as

payment in full for the services.

SECTION 13. 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, 2025.