Oliverson’s bill for plain-language explanations of benefits

The text as introduced · 3,157 words

89R5923 RDS-F

By: Oliverson
H.B. No. 4681

A BILL TO BE ENTITLED

AN ACT

relating to disclosures of preauthorization requirements and

explanations of benefits for medical and health care services and

supplies covered by health maintenance organizations and preferred

provider benefit plans; imposing administrative penalties.

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

SECTION 1. Subchapter D, Chapter 843, Insurance Code, is

amended by adding Section 843.114 to read as follows:

Sec. 843.114. EXPLANATION OF BENEFITS. A health

maintenance organization shall provide a written explanation of

benefits to an enrollee for a health care service or supply

submitted by a physician or health care provider to the health

maintenance organization for payment. The explanation must

include:

(1) a plain-language description of the health care

service or supply that adequately identifies for the enrollee the

health care service or supply received by the enrollee from the

physician or provider; and

(2) a plain-language description of each identifying

code, including a denial code, provided in the explanation of

benefits that adequately informs and defines the identifying code

for the enrollee.

SECTION 2. Section 843.3481, Insurance Code, is amended by

amending Subsections (a) and (b) and adding Subsection (e) to read

as follows:

(a) A health maintenance organization that uses a

preauthorization process for health care services shall display in

a prominent location on or through a dedicated link that is

prominently displayed on the home page of the health maintenance

organization's Internet website all [ make the ] requirements and

information about the preauthorization process [ readily accessible

to enrollees, physicians, providers, and the general public by

posting the requirements and information on the health maintenance

organization's Internet website ].

(b) The preauthorization requirements and information

described by Subsection (a) [ must ]:

(1) must be [ posted ]:

(A) available free of charge;

(B) formatted in a manner that is digitally

searchable and prescribed by the commissioner;

(C) accessible to a common commercial operator of

an Internet search engine as reasonably necessary for the search

engine to:

(i) index the requirements and information;

and

(ii) display the requirements and

information as a result in a response to a search query initiated by

a user of the search engine; and

(D) [ (A) except as provided by Subsection (c) or

(d), conspicuously in a location on the Internet website that does

not require the use of a log-in or other input of personal

information to view the information; and

[ (B) in a format that is easily searchable and

accessible;

[ (2) except for the screening criteria under

Subdivision (4)(C), be ] written in plain language that is easily

understandable by enrollees, physicians, providers, and the

general public;

(2) may not require an individual to:

(A) establish a user account or password;

(B) submit personal identifying information; or

(C) overcome any other impediment to accessing

the requirements and information, including a requirement that the

individual enter a code to access the requirements and information;

(3) must include a detailed description of the

preauthorization process and procedure; and

(4) must include an accurate and current list of the

health care services for which the health maintenance organization

requires preauthorization that includes the following information

specific to each service:

(A) the effective date of the preauthorization

requirement;

(B) a list or description of any supporting

documentation that the health maintenance organization requires

from the physician or provider ordering or requesting the service

to approve a request for that service;

(C) the applicable screening criteria, which may

include Current Procedural Terminology codes and International

Classification of Diseases codes; and

(D) statistics regarding preauthorization

approval and denial rates for the service in the preceding calendar

year, including statistics in the following categories:

(i) physician or provider type and

specialty, if any;

(ii) indication offered;

(iii) reasons for request denial , which may

not be in the form of alphanumeric codes ;

(iv) initial denials;

(v) denials overturned on internal appeal;

(vi) [ (v) ] denials overturned by an

independent review organization;

(vii) approvals and denials of expedited

preauthorization requests;

(viii) [ and

[ (vi) ] total annual preauthorization

requests, approvals, and denials for the service ; and

(ix) average and median times that elapsed

between the submission of a preauthorization request and a decision

by the health maintenance organization, sorted by standard

preauthorization requests and expedited preauthorization requests .

(e) The provisions of this section may not be waived by

contract.

SECTION 3. Section 843.3482, Insurance Code, is amended to

read as follows:

Sec. 843.3482. CHANGES TO PREAUTHORIZATION REQUIREMENTS.

(a) Except as provided by Subsection (b), not later than the 60th

business day before the date a new or amended preauthorization

requirement takes effect, a health maintenance organization that

uses a preauthorization process for health care services shall , in

accordance with Section 843.3481:

(1) provide written notice of the new or amended

preauthorization requirement and the date and time the requirement

goes into effect to each enrollee and each participating physician

and provider in the health maintenance organization's network who

provides a health care service subject to the requirement; and

(2) disclose the new or amended requirement and the

date and time the requirement goes into effect in the health

maintenance organization's newsletter or network bulletin, if any,

and on the health maintenance organization's Internet website.

(b) For a change in a preauthorization requirement or

process that removes a service from the list of health care services

requiring preauthorization or amends a preauthorization

requirement in a way that is less burdensome to enrollees or

participating physicians or providers, a health maintenance

organization shall , in accordance with Section 843.3481:

(1) provide written notice of the change in the

preauthorization requirement and the date and time the change goes

into effect to each enrollee and each participating physician and

provider in the health maintenance organization's network who

provides the health care service; and

(2) disclose the change and the date and time the

change goes into effect in the health maintenance organization's

newsletter or network bulletin, if any, and on the health

maintenance organization's Internet website [ not later than the

fifth day before the date the change takes effect ].

(c) Not later than the fifth day before the date a new or

amended preauthorization requirement takes effect, a health

maintenance organization shall update its Internet website to

disclose the change to the health maintenance organization's

preauthorization requirements or process and the date and time the

change is effective in accordance with Section 843.3481 .

(d) A new or amended preauthorization requirement imposed

by a health maintenance organization must take effect on a business

day.

(e) The provisions of this section may not be waived by

contract.

SECTION 4. Subchapter J, Chapter 843, Insurance Code, is

amended by adding Section 843.3484 to read as follows:

Sec. 843.3484. ADDITIONAL ENFORCEMENT FOR PREAUTHORIZATION

VIOLATION. (a) In addition to any other penalty or remedy provided

by law and if the commissioner determines that a health maintenance

organization has violated Section 843.348, 843.3481, or 843.3482,

the commissioner shall issue a notice of the violation to the health

maintenance organization and order the health maintenance

organization to submit a corrective action plan to the department.

The notice must:

(1) indicate the form and manner in which the

corrective action plan must be submitted to the department; and

(2) clearly state the date by which the health

maintenance organization must submit the plan.

(b) A health maintenance organization that receives a

notice under Subsection (a) shall, on or before the date described

by Subsection (a)(2):

(1) submit a corrective action plan in the form and

manner prescribed by the notice; and

(2) as soon as practicable after submission of a

corrective action plan under Subdivision (1), act to comply with

the plan.

(c) A corrective action plan submitted to the department

must provide:

(1) a detailed description of the corrective action

the health maintenance organization will take to address each

violation identified by the commissioner and included in the notice

provided under Subsection (a); and

(2) a date by which the health maintenance

organization will complete the corrective action described by

Subdivision (1).

(d) In addition to any other penalty or remedy provided by

law, the commissioner shall impose an administrative penalty under

Chapter 84 on a health maintenance organization for each violation

of this section or Section 843.348, 843.3481, or 843.3482 by the

health maintenance organization. For purposes of determining a

penalty under Subsection (e), each day a violation continues is

considered a separate violation.

(e) The commissioner shall set the amount of the

administrative penalty described by Subsection (d) in an amount not

to exceed:

(1) for a health maintenance organization with a total

gross revenue of less than $10 million during the preceding

calendar year, $10 for each violation;

(2) for a health maintenance organization with a total

gross revenue of $10 million or more but less than $100 million

during the preceding calendar year, $100 for each violation; or

(3) for a health maintenance organization with a total

gross revenue of $100 million or more during the preceding calendar

year, $1,000 for each violation.

SECTION 5. Subchapter A, Chapter 1301, Insurance Code, is

amended by adding Section 1301.011 to read as follows:

Sec. 1301.011. EXPLANATION OF BENEFITS. An insurer shall

provide a written explanation of benefits to an insured for a health

care service or supply submitted by a physician or health care

provider to the insurer for payment. The explanation must include:

(1) a plain-language description of the health care

service or supply that adequately identifies for the insured the

health care service or supply received by the insured from the

physician or provider; and

(2) a plain-language description of each identifying

code, including a denial code, provided in the explanation of

benefits that adequately informs and defines the identifying code

for the insured.

SECTION 6. Sections 1301.1351(a) and (b), Insurance Code,

are amended to read as follows:

(a) An insurer that uses a preauthorization process for

medical care or health care services shall display in a prominent

location on or through a dedicated link that is prominently

displayed on the home page of the insurer's Internet website all

[ make the ] requirements and information about the preauthorization

process [ readily accessible to insureds, physicians, health care

providers, and the general public by posting the requirements and

information on the insurer's Internet website ].

(b) The preauthorization requirements and information

described by Subsection (a) [ must ]:

(1) must be [ posted ]:

(A) available free of charge;

(B) formatted in a manner that is digitally

searchable and prescribed by the commissioner;

(C) accessible to a common commercial operator of

an Internet search engine as reasonably necessary for the search

engine to:

(i) index the requirements and information;

and

(ii) display the requirements and

information as a result in response to a search query initiated by a

user of the search engine; and

(D) [ (A) except as provided by Subsection (c) or

(d), conspicuously in a location on the Internet website that does

not require the use of a log-in or other input of personal

information to view the information; and

[ (B) in a format that is easily searchable and

accessible;

[ (2) except for the screening criteria under

Subdivision (4)(C), be ] written in plain language that is easily

understandable by insureds, physicians, health care providers, and

the general public;

(2) may not require an individual to:

(A) establish a user account or password;

(B) submit personal identifying information; or

(C) overcome any other impediment to accessing

the requirements and information, including a requirement that the

individual enter a code to access the requirements and information;

(3) must include a detailed description of the

preauthorization process and procedure; and

(4) must include an accurate and current list of

medical care and health care services for which the insurer

requires preauthorization that includes the following information

specific to each service:

(A) the effective date of the preauthorization

requirement;

(B) a list or description of any supporting

documentation that the insurer requires from the physician or

health care provider ordering or requesting the service to approve

a request for the service;

(C) the applicable screening criteria, which may

include Current Procedural Terminology codes and International

Classification of Diseases codes; and

(D) statistics regarding the insurer's

preauthorization approval and denial rates for the medical care or

health care service in the preceding calendar year, including

statistics in the following categories:

(i) physician or health care provider type

and specialty, if any;

(ii) indication offered;

(iii) reasons for request denial , which may

not be in the form of alphanumeric codes ;

(iv) initial denials;

(v) denials overturned on internal appeal;

(vi) [ (v) ] denials overturned by an

independent review organization;

(vii) approvals and denials of expedited

preauthorization requests;

(viii) [ and

[ (vi) ] total annual preauthorization

requests, approvals, and denials for the service ; and

(ix) average and median times that elapsed

between the submission of a preauthorization request and a decision

by the insurer, sorted by standard preauthorization requests and

expedited preauthorization requests .

SECTION 7. Section 1301.1352, Insurance Code, is amended by

amending Subsections (a), (b), and (c) and adding Subsection (c-1)

to read as follows:

(a) Except as provided by Subsection (b), not later than the

60th business day before the date a new or amended preauthorization

requirement takes effect, an insurer that uses a preauthorization

process for medical care or health care services shall , in

accordance with Section 1301.1351:

(1) provide written notice of the new or amended

preauthorization requirement and the date and time the requirement

goes into effect to each insured and each participating provider in

the insurer's network who provides the medical care or health care

service subject to the requirement; and

(2) disclose the new or amended requirement and the

date and time the requirement goes into effect in the insurer's

newsletter or network bulletin, if any, and on the insurer's

Internet website.

(b) For a change in a preauthorization requirement or

process that removes a service from the list of medical care or

health care services requiring preauthorization or amends a

preauthorization requirement in a way that is less burdensome to

insureds, physicians, or health care providers, an insurer shall ,

in accordance with Section 1301.1351:

(1) provide written notice of the change in the

preauthorization requirement and the date and time the change goes

into effect to each insured, participating physician, and health

care provider in the insurer's network who provides the medical

care or health care service; and

(2) disclose the change and the date and time the

change goes into effect in the insurer's newsletter or network

bulletin, if any, and on the insurer's Internet website [ not later

than the fifth day before the date the change takes effect ].

(c) Not later than the fifth day before the date a new or

amended preauthorization requirement takes effect, an insurer

shall update its Internet website to disclose the change to the

insurer's preauthorization requirements or process and the date and

time the change is effective in accordance with Section 1301.1351 .

(c-1) A new or amended preauthorization requirement imposed

by an insurer must take effect on a business day.

SECTION 8. Subchapter C-1, Chapter 1301, Insurance Code, is

amended by adding Section 1301.1354 to read as follows:

Sec. 1301.1354. ADDITIONAL ENFORCEMENT FOR

PREAUTHORIZATION VIOLATION. (a) In addition to any other penalty

or remedy provided by law and if the commissioner determines that an

insurer has violated Section 1301.135, 1301.1351, or 1301.1352, the

commissioner shall issue a notice of the violation to the insurer

and order the insurer to submit a corrective action plan to the

department. The notice must:

(1) indicate the form and manner in which the

corrective action plan must be submitted to the department; and

(2) clearly state the date by which the insurer must

submit the plan.

(b) An insurer that receives a notice under Subsection (a)

shall, on or before the date described by Subsection (a)(2):

(1) submit a corrective action plan in the form and

manner prescribed by the notice; and

(2) as soon as practicable after submission of a

corrective action plan under Subdivision (1), act to comply with

the plan.

(c) A corrective action plan submitted to the department

must provide:

(1) a detailed description of the corrective action

the insurer will take to address each violation identified by the

commissioner and included in the notice provided under Subsection

(a); and

(2) a date by which the insurer will complete the

corrective action described by Subdivision (1).

(d) In addition to any other penalty or remedy provided by

law, the commissioner shall impose an administrative penalty under

Chapter 84 on an insurer for each violation of this section or

Section 1301.135, 1301.1351, or 1301.1352. For purposes of

determining a penalty under Subsection (e), each day a violation

continues is considered a separate violation.

(e) The commissioner shall set the amount of an

administrative penalty described by Subsection (d) in an amount not

to exceed:

(1) for an insurer with a total gross revenue of less

than $10 million during the preceding calendar year, $10 for each

violation;

(2) for an insurer with a total gross revenue of $10

million or more but less than $100 million during the preceding

calendar year, $100 for each violation; or

(3) for an insurer with a total gross revenue of $100

million or more during the preceding calendar year, $1,000 for each

violation.

SECTION 9. The following provisions of the Insurance Code

are repealed:

(1) Sections 843.3481(c) and (d);

(2) Section 843.3483;

(3) Sections 1301.1351(c) and (d); and

(4) Section 1301.1353.

SECTION 10. Sections 843.114 and 1301.011, Insurance Code,

as added by this Act, apply only to a health benefit plan delivered,

issued for delivery, or renewed on or after January 1, 2026.

SECTION 11. A health maintenance organization and insurer

shall update the health maintenance organization's or insurer's

Internet website to conform with Section 843.3481 or 1301.1351,

Insurance Code, as amended by this Act, as applicable, not later

than January 1, 2026.

SECTION 12. Sections 843.3481, 843.3482, 1301.1351, and

1301.1352, Insurance Code, as amended by this Act, and Sections

843.3484 and 1301.1354, Insurance Code, as added by this Act, apply

only to a request for preauthorization of medical care or health

care services made on or after January 1, 2026, under a health

benefit plan delivered, issued for delivery, or renewed on or after

that date. A request for preauthorization of medical care or health

care services made before January 1, 2026, or on or after January 1,

2026, under a health benefit plan delivered, issued for delivery,

or renewed before that date is governed by the law as it existed

immediately before the effective date of this Act, and that law is

continued in effect for that purpose.

SECTION 13. This Act takes effect September 1, 2025.