Prompt Payment (Texas)
SB 418 was enacted to enhance the current statutory scheme governing prompt payment of medical and health care services in several respects. It specifies the formats which physicians and providers must use in order to file a clean claim and allows the commissioner of insurance to specify by rule the information that the forms must contain for both electronic claims and non-electronic claims. It deletes the previous definition of clean claim as a completed claim as determined under department rules, as well as the provision that allows a change in clean claim elements upon 60 days notice. It imposes a deadline by which physicians and providers must submit claims, adds a 30-day claims processing deadline for electronic claims and a 180-day deadline for completion of audits, and requires audit payments to be 100% of the applicable contracted rate. It streamlines and standardizes the claims payment process by more strictly limiting the procedure by which a carrier may request additional information, and prescribes the procedures a carrier must follow in order to recover an overpayment. It imposes greater limitations on provisions that are negotiable by contract between physicians or providers and carriers. It establishes a new system of graduated penalties for late-paid clean claims, and allows carriers an opportunity, under certain circumstances, to rectify an underpayment, without penalty, absent timely notice by the physician or provider. In addition to all other penalties or remedies authorized by the Insurance Code, it also allows for administrative penalties against carriers that are noncompliant in processing more than two percent of clean claims. It specifies that the provisions of SB 418 relating to prompt payment and verification apply to a non-network physician or provider who provides emergency care or specialty or other care upon referral because the services are not reasonably available from a network provider.
SB 418 also contains new provisions regarding verification and preauthorization of medical or health care services and availability of coding guidelines through contracts with preferred provider carriers and HMOs. "Preauthorization" means a determination by an insurer that medical care or health care services proposed to be provided to a patient are medically necessary and appropriate. "Verification" means a reliable representation by an insurer to a physician or health care provider that the insurer will pay the physician or provider for proposed medical care or health care services if the physician or provider renders those services to the patient for whom the services are proposed. The term includes precertification, certification, recertification, and any other term that would be a reliable representation by an insurer to a physician or provider.
Highlights of SB 418:
- Revises state laws requiring prompt payment of clean claims submitted by physicians and providers under contract with HMOs and preferred provider plans.
- Repeals the law allowing insurers and HMOs to add clean claim elements by contract.
- Authorizes contractual provisions that reduce the number of clean claim elements.
- Requires 100 percent payment (instead of 85 percent payment) of claims pending audit.
- Reduces the payment deadline from 45 days to 30 days when a clean claim is filed electronically.
- HMOs and insurers have a time limit of 180 days to request refunds when claims are overpaid.
- The bill establishes ground rules for cases involving preauthorization or verification. If an insurer has preauthorized medical care or health care services, it may not deny or reduce payment based on medical necessity or appropriateness of care. The bill allows a physician or provider to request verification of proposed services.
- If an insurer has verified the proposed medical care or health care service, it has guaranteed that it will pay the resulting claim.
- The bill provides an exception to preauthorization or verification if a physician or provider materially misrepresents the services to be provided or substantially fails to perform them.
- Provides for graduated penalties when claims are not paid within the applicable statutory claims payment period.
- Requires physicians and providers to submit their claims within 95 days after providing the services for which the claims are made.
The text of SB 418 can be found on the TDI Website.
Subchapter T - Submission of Clean Claims
The purpose of these rules is to implement the provisions and the intent of SB 418 by ensuring that the clean claims filing and payment processes are streamlined, standardized, and efficient.
The text of Subchapter T can be found on the TDI Website.
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