2005 Legislative Compendium: Managed Care/Insurance Reform

Batch Rejection of Clean Claims  |  Employer Payment of Health Plan Premiums  |  Electronic Transmission of Health Benefit Information  |  Floor for PPO Out-of-Network Benefits  |  Mandatory Insurance Fraud Reporting  |  Managed Care Near Misses  |   Managed Care Close Calls 

 

Batch Rejection of Clean Claims

SB 50 by Sen. Jane Nelson (R-Lewisville) and Rep. John Smithee (R-Amarillo) requires health plans to include a contract provision, upon a physician's request, requiring  them to pay a clean electronic claim consistent with Texas Prompt Pay even if the clean claim is contained in an electronic batch of claims that is rejected in its entirety. However, since the end of the regular legislative session, the Texas Department of Insurance (TDI) has clarified that the requirement to process an electronic clean claim exists when the carrier receives it, and that the health plan's duty to process a clean claim does not depend on a provision in its contract with a physician. TMA supported this bill.

Employer Payment of Health Plan Premiums

SB 51 by Senator Nelson and Representative Smithee effectively removes the 30-day grace period that employers have for paying health insurance premiums for their employees. TMA supported the bill, which requires employers to be responsible for a health insurance premium until the end of the month in which an employee is removed from coverage under a group health plan. The bill states that the insurer isto be notified of such removal to prevent retroactive recovery of payments made to physicians for medical services provided in good faith prior to retroactive termination of the employee's health plan coverage. SB 51 also changes verification and preauthorization call center requirements for dental and vision HMOs.

Electronic Transmission of Health Benefit Information

SB 1149 by Sen. Chris Harris (R-Arlington) and Rep. Craig Eiland (D-Galveston) requires health plans to make available to a physician or other provider at the time of the patient's visit, either telephonically or electronically, certain patient-specific information including enrollment and eligibility status, benefits, and financial responsibility. TMA strongly supported this bill. It is the first in a series of steps to move health plans toward the use of smart card technology. The Texas Association of Health Plans (TAHP) testified in favor of this bill when the Senate State Affairs Committee heard it. However, by the time the bill was heard by the House Insurance Committee, TAHP had changed its mind and testified in opposition to the bill. 

Floor for PPO Out-of-Network Benefits

HB 1030 by Rep. Larry Taylor (R-Friendswood) and Sen. Mike Jackson (R-La Porte) amends existing statute to set a floor for PPO out-of-network benefits at no less than 50 percent. Previously, informal guidelines used by TDI limited the spread for enrollee cost-sharing between in-network and out-of-network benefits to 30 percent. This bill allows for a possible difference greater than 30 percent, but enrollees' coinsurance for services provided by out-of-network physicians may not exceed 50 percent of the amount covered. TMA testified in the House Insurance Committee opposing this bill as filed but worked with Representative Taylor to address concerns. The association subsequently supported the provision establishing the 50 percent floor.

Mandatory Insurance Fraud Reporting

HB 2388 by Rep. Senfronia Thompson (D-Houston) and Sen. Troy Fraser (R-Horseshoe Bay) mandates health plan reporting to the TDI fraud unit within 30 days of determining or suspecting that a fraudulent act has occurred. TMA supported this bill as a response to health plan claims that the Texas Prompt Pay requirements restrict their ability to investigate possible fraudulent health care claims. This bill will allow TDI to track and report to the legislature the level of reported fraudulent activity so an analysis can be made to determine what, if any, adverse impact Texas Prompt Pay is having on health plan fraud investigations.

Managed Care Near Misses

House Bill 1776 by Representative Debbie Riddle (R-Tomball) would have explicitly prohibited HMOs and PPOs from discriminating, limiting, or directing patients within its network through increasing enrollee cost-shares. TMA strongly supported this bill as a way to stop health plans' use of tiered networks to limit patient access to "approved" network physicians as well as reducing physician reimbursement. The bill died in the House Insurance Committee.

Managed Care Close Calls

Several bad managed care bills were defeated early in the fight over inadequate health plan networks. These bills could very easily reappear in 2007. Below is a brief summary.

Mandatory Electronic Claims Filing

SB 49 by Senator Nelson and Representative Smithee would have mandated health plan contracts to require physicians and other providers to submit claims electronically. TMA was successful in getting this language removed from 2003's prompt pay bill, SB 418. The bill died in the House Local and Consent Committee.

HMO in Name Only

HB 1570 by Representative Taylor and Sen. Kip Averitt (R-McGregor) would have allowed standard benefit plans (as passed by SB 541 in 2003) to use exclusive provider organization networks. The bill also would have allowed HMO and point-of-service plans to remove or change time and cost limitations for health care services, and would have tiered cost shares comparable to PPOs. TMA viewed this as the worst possible scenario for patients and physicians by allowing HMOs to become, in essence, closed- network PPOs with no out-of-network benefits. The association strongly opposed HB 1570, which died in the Senate State Affairs Committee.

Prompt Pay Extension

House Bill 3371 by Representative Taylor would have allowed health plans to apply for an extension of the Texas Prompt Pay deadlines upon suspicion of provider fraud. The health plan was required to notify both TDI and the physician or provider. HB 3371 died in the House Insurance Committee.

Managed Care/Insurance TMA Staff Contacts:  

  • Hilary Dennis, Legislative Affairs, (512) 370-1370
  • Teresa Devine, Health Care Financing, (512) 370-1415
  • Lee Spangler, JD, Office of the General Counsel, (512) 370-1337 

Overview  | Tax Reform | Scope of Practice | Physician Ownership | Inadequate Health Plan Networks (Balanced Billing) | Texas State Board of Medical Examiners Sunset and Physician Licensure | Agency Sunset Review  | Corporate Practice of Medicine | Health Care Funding | Medicaid and CHIP | Indigent Care and the Uninsured | Workers' Compensation | Professional Liability Reform | Medical Education/Workforce | Child Health, Safety, and Nutrition/Fitness | Public Health | Border Health | Rural Health | Mental Health | Trauma/EMS | Prescription Drugs | Medical Science | Long-Term Care | Abortion | Transplantation/Organ Donation | Table of Contents  


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