bill defines bad faith in surprise billing mediation

The text as introduced · 360 words

89R727 CJD-F

By: Hughes
S.B. No. 701

A BILL TO BE ENTITLED

AN ACT

relating to mediation or arbitration of certain billing disputes

between health benefit plan issuers or administrators and

out-of-network facilities.

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

SECTION 1. Section 1467.081, Insurance Code, is amended to

read as follows:

Sec. 1467.081. APPLICABILITY OF SUBCHAPTER. Except as

provided by Section 1467.103, this [ This ] subchapter applies only

with respect to a health benefit claim submitted by an

out-of-network provider who is not a facility.

SECTION 2. Section 1467.101, Insurance Code, is amended by

adding Subsection (c) to read as follows:

(c) The following conduct constitutes bad faith

participation with respect to mediation under Subchapter B:

(1) failing to provide the material facts necessary to

conduct a meaningful mediation process; or

(2) failing to send to mediation a representative who

is authorized to negotiate on the party's behalf.

SECTION 3. Subchapter C, Chapter 1467, Insurance Code, is

amended by adding Section 1467.103 to read as follows:

Sec. 1467.103. REQUEST FOR ARBITRATION. (a) Bad faith

participation with respect to mediation under Subchapter B by a

party to the mediation is grounds for the opposing party to request

arbitration under Subchapter B-1.

(b) On a request for arbitration under Subsection (a):

(1) the out-of-network facility that is a party to the

mediation is considered an out-of-network provider for purposes of

the arbitration under Subchapter B-1; and

(2) the department shall:

(A) select an arbitrator; and

(B) require the arbitrator to make a

determination not later than the 30th day after the date the

arbitrator receives the information necessary to make the

determination under Section 1467.083.

(c) Not later than the 30th day after the date an

arbitrator's written decision is provided to the parties under

Section 1467.088, the health benefit plan issuer or administrator

shall pay the out-of-network facility any additional amount

necessary to satisfy the award.

SECTION 4. The changes in law made by this Act apply only to

a claim for health care or medical services or supplies provided on

or after January 1, 2026.

SECTION 5. This Act takes effect September 1, 2025.