85R8526 BEE-F     By: Paul H.B. No. 3348       A BILL TO BE ENTITLED   AN ACT   relating to coverage under a preferred provider benefit plan for   certain services provided by out-of-network providers; authorizing   a fee.          BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:          SECTION 1.  Chapter 1301, Insurance Code, is amended by   adding Subchapter F to read as follows:   SUBCHAPTER F. COVERAGE FOR CERTAIN OUT-OF-NETWORK SERVICES           Sec. 1301.251.  DEFINITIONS. In this subchapter:                (1)  "Database provider" means a database provider   certified by the department under Section 1301.254.                (2)  "Designated reimbursement information   organization" means an organization designated by the commissioner   under Section 1301.256.                (3)  "Emergency care" has the meaning assigned by   Section 1301.155.                (4)  "Geozip area" means an area that includes all zip   codes with the identical first three digits. For purposes of this   term, the geozip area is the closest geozip area to the location in   which the health care service was performed if the location does not   have a zip code.                (5)  "Out-of-network provider," with respect to a   preferred provider benefit plan, means a physician or health care   provider that is not a preferred provider of the plan.                (6)  "Purchaser" means an insured under a preferred   provider benefit plan, regardless of whether the insured pays any   part of the insured's premium, and a sponsor of the preferred   provider benefit plan, regardless of whether the sponsor pays any   part of an insured's premium.                (7)  "Usual and customary charge" means an average   charge for a service or procedure, classified by geozip area and   Current Procedural Terminology code that is in the 80th percentile   of the undiscounted billed charges for that service reported to a   database provider.          Sec. 1301.252.  AVAILABILITY OF PREFERRED BENEFIT COVERAGE   LEVELS FOR CERTAIN OUT-OF-NETWORK SERVICES. (a) An insurer shall   offer coverage to the insured that provides reimbursement at the   preferred level of benefits for emergency care provided by an   out-of-network provider at an institutional provider that is a   preferred provider.          (b)  Coverage described by Subsection (a) must provide that   the insured is held harmless for any amount charged by an   out-of-network provider in excess of the amount of copayment,   deductible, or coinsurance that the insured would have paid if the   insured received the services from a preferred provider.          (c)  An insurer may charge an additional premium for the   coverage described by Subsection (a).          Sec. 1301.253.  PAYMENT OF CERTAIN CLAIMS. (a)  On receipt   of a claim for payment by an out-of-network provider for a service   covered under Section 1301.252, an insurer shall obtain from a   database provider a certification:                (1)  of the usual and customary charge for the service;   or                (2)  that there are not sufficient reported charges in   the database provider's database to establish the usual and   customary charge for the service.          (b)  If an out-of-network provider submits to an insurer a   claim for payment described by Subsection (a), the insurer shall   pay, minus any portion of the charge that is the insured's   responsibility under the preferred provider benefit plan, the   lesser of:                (1)  the amount that the provider would have received   if the provider were a preferred provider; or                (2)  the following amount provided by a database   provider selected by the insurer, as applicable:                      (A)  the usual and customary charge for the   service; or                      (B)  if there are not sufficient reported charges   in the database provider's database to establish the usual and   customary charge for the service, 80 percent of the billed charge or   an amount equal to the 90th percentile of the charges for the   service reported by the designated reimbursement information   organization for physicians and health care providers in the same   geozip area.          (c)  An out-of-network provider shall accept as full payment   for a claim described by Subsection (a) the total of:                (1)  the portion of the charge that is the insured's   responsibility under the preferred provider benefit plan; and                (2)  a payment received from the insurer that complies   with Subsection (b).          (d)  An insurer may not pay a provider less than the amount   required under this section solely because the insurer has not   received a portion of the charge that is the insured's   responsibility.          Sec. 1301.254.  CERTIFICATION AND QUALIFICATIONS OF   DATABASE PROVIDER AND DATABASE. (a)  A database provider that is   used to determine usual and customary charges for the purposes of   this subchapter must be certified by the department.  The   department may certify a database provider under this subchapter   only if the department determines that the database provider and   the database used by the provider for the purposes of this   subchapter comply with this section.          (b)  A database provider must be a nonprofit organization   that:                (1)  maintains a database with content that complies   with this section;                (2)  maintains an active Internet website accessible to   the public and to all insurers subscribing to the database; and                (3)  demonstrates an ability to:                      (A)  maintain a compilation of charge data that is   absent any data required to be excluded under Subsection (e)(1);   and                      (B)  distinguish charges that are not related to   one another and eliminate irrelevant or erroneous charges from   reported charge information.          (c)  A database provider must compute usual and customary   charges for services provided by physicians or health care   providers in accordance with this subchapter.          (d)  The data in the database must contain out-of-network   charges, classified by Current Procedural Terminology code, for   physician and health care providers in each geozip area in this   state.          (e)  The data in the database may not:                (1)  include:                      (A)  any data other than out-of-network billed   charges from physicians and health care providers in this state;                      (B)  physician and health care provider charges   that reflect payments discounted under governmental or   nongovernmental health benefit plans; or                      (C)  information that is more than seven years   old; or                (2)  exclude charges accompanied by modifiers that   indicate procedures with complications.          (f)  An entity may not be certified as a database provider   for the purposes of this subchapter if the entity owns or controls,   or is owned or controlled by, or is an affiliate of, any entity with   a pecuniary interest in the application of the database, including   an insurer, a holding company of an insurer, or a trade association   in the field of insurance or health benefits.          (g)  The Internet website required by this section must allow   an individual to determine the usual and customary charge for a   particular service provided by a physician or health care provider.          (h)  The department shall ensure that:                (1)  the data in the database used to compute usual and   customary charges of out-of-network providers is updated regularly   to accurately reflect current physician and health care provider   retail charges;                (2)  charge information that is more than seven years   old is removed from the database; and                (3)  at least one entity is certified as a database   provider.          (i)  The department may charge a fee for certification under   this section in an amount necessary to implement this section.          Sec. 1301.255.  PROVISION OF USUAL AND CUSTOMARY CHARGE BY   DATABASE PROVIDER. For each service for which a billed charge is   submitted by a physician or health care provider to an insurer that   subscribes to the database, the database provider shall provide the   insurer with a certification of the usual and customary charge or a   certification that there are not sufficient reported charges in the   database provider's database to establish the usual and customary   charge for the service, as applicable.          Sec. 1301.256.  DESIGNATED REIMBURSEMENT INFORMATION   ORGANIZATION. (a)  The commissioner by rule shall designate an   organization described by this section to report charges for   services provided by physicians and health care providers for which   coverage is provided under Section 1301.252.          (b)  The organization designated under this section must be   an independent, not-for-profit organization created to:                (1)  establish and maintain a database to help insurers   determine reimbursement rates for out-of-network charges; and                (2)  provide insureds with a clear, unbiased   explanation of the reimbursement process.          Sec. 1301.257.  DISCLOSURES REGARDING PAYMENT OF   OUT-OF-NETWORK PROVIDER. (a)  An insurer must provide a   description of the coverage offered under Section 1301.252 on an   Internet website maintained by the insurer and in a written   disclosure provided to a prospective purchaser of the coverage.     The description must include:                (1)  the definition of "usual and customary charge"   assigned by Section 1301.251 and a description of how payment to an   out-of-network provider will, if applicable, be based on the lesser   of:                      (A)  the amount the provider would have received   if the provider were a preferred provider; or                      (B)  the following amount provided by a database   provider selected by the insurer, as applicable:                            (i)  the usual and customary charge for the   service; or                            (ii)  if there are not sufficient reported   charges in the database provider's database to establish the usual   and customary charge for the service, 80 percent of the billed   charge or an amount equal to the 90th percentile of the charges for   the service reported by the designated reimbursement information   organization for physicians and health care providers in the same   geozip area;                (2)  examples of the anticipated portion of the charge   that will be the insured's responsibility for specific services for   which out-of-network providers frequently bill in situations for   which coverage is offered under Section 1301.252;                (3)  a methodology for determining the anticipated   portion of the charge that will be the insured's responsibility for   a specific service that is based on the amount, not an   approximation, that the insurer pays;                (4)  the Internet website addresses of each database   provider certified under this subchapter at which a purchaser or   prospective purchaser may access the database or a single website   address at which an updated set of links to the website addresses of   those database providers may be accessed; and                (5)  a statement that if the insurer's payment due under   coverage provided under Section 1301.252 is not sufficient to cover   the total billed charge, the physician or health care provider   agrees to accept as payment in full the amount paid by the plan in   accordance with the coverage provisions plus any portion of the   charge that is the insured's responsibility under the plan.          (b)  Disclosures under this section must:                (1)  be made in language easily understood by   purchasers and prospective purchasers of preferred provider   benefit plans;                (2)  be made in a uniform, clearly organized manner;                (3)  be of sufficient detail and comprehensiveness as   to provide for full and fair disclosure; and                (4)  be updated as necessary to ensure that the   disclosures are accurate.          SECTION 2.  Subchapter F, Chapter 1301, Insurance Code, as   added by this Act, applies only to a preferred provider benefit plan   that is delivered, issued for delivery, or renewed on or after   January 1, 2018. A plan delivered, issued for delivery, or renewed   before January 1, 2018, 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 3.  This Act takes effect September 1, 2017.