The Texas Department of Insurance (TDI) adopted rules giving "preferred" or contracted physicians the right to specific information about how HMOs and insurance companies calculate allowed amounts, including bundling and downcoding policies.
The information must include "a level of detail sufficient to enable a reasonable person with sufficient training, experience, and competence in claims processing to determine the payment to be made according to the terms of the contract." Insurers may provide the information in a variety of methods, including e-mail, disk, paper, or access to an electronic database.
The rules took effect Oct. 9, 2002, and apply to all contracts entered into or renewed on or after that date. Insurers were required to provide fee schedules and other information by the latter of:
- 90 days after Oct. 9 (or after the date the contract becomes effective) or
- 30 days after a request is received.
Minimum Disclosure Requirements
A contract between physician and insurer must include provisions that entitle physicians, on request by "any reasonable and verifiable means," to all information needed to determine compensation under the contract. At minimum, the information must include:
- A fee schedule with applicable CPT, HCPCS, and ICD-9-CM codes and modifiers by which the physician's claims will be paid or that pertain to the services expected to be delivered routinely under the contract by the physician, along with an explanation of how to obtain information on additional services;
- Applicable coding methods, bundling processes, and downcoding policies;
- A description of any other policies or procedures that affect payment of specific claims submitted by the physician, including recoupment; and
- Any addenda, schedules, exhibits, or policies needed to provide a "reasonable understanding" of the information provided.
- The information must include a physician-specific summary and explanation of all payment and reimbursement methodologies that will be used to pay physician claims. For example, if a fee schedule indicates "usual and customary" reimbursement, the insurer must explain how it determines that rate.
- If contracts reference external sources used for fee computation, such as Medicaid or Medicare, the information must clearly identify the source and explain how the physician can access it.
- Insurers need not provide information that would violate copyright law or licensing agreements. However, they must supply a summary that allows a "reasonable person with sufficient training, experience, and competence in claims processing" to determine contracted payment. A summary is defined as "simply a presentation or collection of less than the entire material included in a particular category."
- Regarding edits, TDI's published rationale of the rules notes, "A carrier can reveal the function any computer program is intended to perform without violating a licensing agreement. Any other conclusion suggests that the carrier is ceding control of the claims payment process to its software vendor, which is neither likely nor acceptable."
- The TDI discussion excludes some medical necessity-type edits from disclosure (for example, diagnosis-to-procedure edits like Medicare local medical review policies), stating that medical necessity is outside the scope of the rules and statute.
- The TDI discussion requires insurers to disclose changes to edits (for example, turning an edit "on") to the extent that they affect the amount of payment to be made to the physician.
Physician Use of Information
A physician may use or disclose the information only for practice management and billing activities. Disclosure for litigation or advocacy is not permitted except as allowed by nondisclosure agreements.
When Procedures Change
No amendment, revision, or substitution of claims payment procedures or any of the required information will be effective unless the insurer provides at least 60 calendar days written notice, with specificity to the amendment, revision, or substitution.
- Where a contract specifies mutual agreement as the only mechanism for requiring amendment, revision, or substitution of the required information, written notice does not supersede the requirement for mutual agreement.
- TDI discussion states that, although changes in an external source (for example, an annual RBRVS update) do not require notice, a change to a claim processing or payment procedure (such as changing the fee payment from 120 percent of Medicare to 110 percent) would require 60-day notice to be effective.
Which Payers Are Affected?
TDI-regulated preferred provider organizations (PPOs) and HMOs and their delegated entities (such as networks) are subject to these provisions. TDI says: "Since the rules apply to HMOs and PPOs, the rules also apply to any entity with which the HMO or PPO has contracted… . The carrier remains ultimately responsible for ensuring that the preferred physician receives the information."
Several categories of payer are not subject to these rules or other TDI-administered clean claims or prompt pay provisions. These include:
- Self-funded ERISA plans;
- Federal employee plans;
- TRICARE Standard,
- Teacher Retirement System;
- The University of Texas and state of Texas employee plans (except complaints about fully insured HMOs);
- Texas Association of School Boards coverage;
- Government, school, and church health plans;
- Out-of-state insureds; and
- Workers' compensation. (The Texas Workers' Compensation Commission has authority to determine the applicability of these rules to workers' compensation carrier networks.)
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