HBA-NLM, BTC H.B. 610 76(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 610 By: Janek Insurance 2/11/1999 Introduced BACKGROUND AND PURPOSE Currently, Health Maintenance Organizations (HMO) are not required to compensate physicians for services within a specified period of time. H.B. 610 requires prompt payment to physicians and providers for services performed. This bill sets further payment schedules for physicians and provides penalties for late payments. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that this bill does not expressly delegate any additional rulemaking authority to a state officer, department, agency, or institution. SECTION BY SECTION ANALYSIS SECTION 1. Amends The Texas Health Maintenance Organization Act (Chapter 20A, Vernon's Texas Insurance Code), by adding Section 18B, as follows: Sec. 18B. PROMPT PAYMENT OF PHYSICIAN AND PROVIDERS. (a) Requires that, no later than the second day after the date that a health maintenance organization (HMO) receives an invoice from a physician or provider for medical care or health care services under a health care plan, the health maintenance organization acknowledge receipt of the invoice in writing. (b) Requires that, no later than the 15th day after the date that the HMO an invoice from a physician or provider, the HMO request from the physician or provider any information, statement, or form that the HMO reasonably believes will be required to permit payment of the invoice. Authorizes the HMO to request additional information at a later time if necessary to process the invoice. (c) Requires that, no later than the 60th day after the date that the HMO receives an invoice from a physician or provider, the HMO pay the total amount of the invoice, pay a portion of the invoice and notify the physician or provider in writing why the remaining portion of the invoice will not be paid, or notify the physician or provider in writing why the invoice will not be paid. (d) Provides that an HMO that violates Subsection (c) of this section is liable to a physician or provider, in addition to the amount owed by the HMO for the care or services provided, which accrues at the rate of 10 percent a year beginning on the date that the HMO receives an invoice from a physician or provider and ending on the date the invoice is paid. (e) Authorizes a physician or provider to recover reasonable attorney's fees in an action to recover payment of an invoice subject to this section or to recover interest under Subsection (d) of this section. (f) Provides that in addition to any other penalty or remedy authorized by the Insurance Code or another insurance law of this state, an HMO that violates Subsection (c) of this section is subject to an administrative penalty under Article 1.10E, Insurance Code. Prohibits the administrative penalty imposed under that article from exceeding $1,000 for each day the invoice remains unpaid in violation of Subsection (c) of this section. (g) Provides that this section does not apply to a capitation payment required to be made to a physician or provider under an agreement to provide medical care or health care services under a health care plan. SECTION 2. Amends Article 3.70-3C, Insurance Code, as added by Chapter 1024, Acts of the 75th Legislature, Regular Session, 1997, by adding Section 3A, as follows: Sec. 3A. PROMPT PAYMENT OF PREFERRED PROVIDERS. (a) Requires the insurer, not later than the second day after the date that an insurer receives an invoice from a preferred provider for medical care or health care provided to an insured covered by a health insurance policy, to acknowledge receipt of the invoice in writing. (b) Requires the insurer, not later than the 15th day after the date that the insurer receives an invoice from a preferred provider, to request from the preferred provider any information, statement, or form that the insurer reasonably believes will be required to permit payment of the invoice. Authorizes the insurer to request additional information at a later time if necessary to process the invoice. (c) Requires the insurer, not later than the 60th day after the date that the insurer receives an invoice from a preferred provider, to pay the total amount of the invoice, pay a portion of the invoice and notify the preferred provider in writing why the remaining portion of the invoice will not be paid, or notify the preferred provider in writing why the invoice will not be paid. (d) Provides that an insurer who violates Subsection (c) of this section is liable to a preferred provider, in addition to the amount owed by the insurer for the care provided, for interest on that amount which accrues at the rate of 10 percent a year beginning on the date the that the insurer receives an invoice from a preferred provider and ending on the date the invoice is paid. (e) Provides that a preferred provider may recover reasonable attorney's fees in an action to recover payment of an invoice subject to this section or to recover interest under Subsection (d) of this section. (f) Provides that in addition to any other penalty or remedy authorized by this code or another insurance law of this state, an insurer that violates Subsection (c) of this section is subject to an administrative penalty under Article 1.10E of this code. Provides that the administrative penalty imposed under that article may not exceed $1,000 for each day the invoice remains unpaid in violation of Subsection (c) of this section. SECTION 3. Amends Section 5(c), Article 21.55, Insurance Code, by adding language that this article does not apply to an invoice governed by Section 3A, Article 3.70-3C. of this code. SECTION 4. Effective date: September 1, 1999. SECTION 5. Emergency clause.