HBA-JEK H.B. 1347 77(R)    BILL ANALYSIS


Office of House Bill AnalysisH.B. 1347
By: Bailey
Insurance
2/19/2001
Introduced



BACKGROUND AND PURPOSE 

The current reimbursement procedures of some preferred provider
organizations (PPO) and health maintenance organizations (HMO) can cause
difficulties for doctors and patients.  PPOs and HMOs sometimes mistakenly
verify that an insured is covered before a procedure, and then refuse to
pay the doctor after the treatment is provided and the error is discovered.
Also, some PPOs and HMOs require the use of dispute resolution and avoid
the prompt payment requirements of current law.  Some podiatrists
practicing in Texas who routinely provide physical therapy are sometimes
not receiving prompt payment because some PPOs and HMOs refuse to reimburse
podiatrists for services.  These PPOs and HMOs direct patients to another
facility for physical therapy, which may inconvenience the patient and
disrupt timely patient care.  House Bill 1347 sets forth reimbursement
requirements to address these problems. 

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. 

ANALYSIS

House Bill 1347 amends the Insurance Code to require preferred provider
organizations (PPO) and health maintenance organizations (HMO) to inform a
provider as to whether or not an insured is covered for a service or
benefit if the provider requests the information before providing the
service or benefit to the insured.  If the PPO or HMO verifies that an
insured is covered for a service or benefit, the bill prohibits the PPO or
HMO from denying payment for that service or benefit unless a written
notice of an error in the verification is received by the provider before
the service or benefit is provided.  The bill prohibits a PPO or HMO from
requiring the use of a dispute resolution procedure with a provider if the
use of such a procedure violates the provisions requiring full payment of a
clean claim or 85 percent of the contracted rate on a claim the PPO or HMO
intends to audit within 45 days of receiving the claim. 

H.B. 1347 provides that a contract between a PPO or HMO and a licensed
podiatrist must provide that the podiatrist may furnish physical therapy
within the scope of the law regulating podiatry. 

A PPO is an insurer that provides, through its health insurance policy, for
the payment of a level of coverage which is different from the basic level
of coverage provided by the health insurance policy if the insured uses a
preferred provider. 

EFFECTIVE DATE

September 1, 2001.