CHAPTER 1204. PROCEDURES FOR PAYMENT OF CERTAIN HEALTH AND ACCIDENT INSURANCE POLICY OR PLAN BENEFITS

INSURANCE CODE

TITLE 8. HEALTH INSURANCE AND OTHER HEALTH COVERAGES

SUBTITLE A. HEALTH COVERAGE IN GENERAL

CHAPTER 1204. PROCEDURES FOR PAYMENT OF CERTAIN HEALTH AND

ACCIDENT INSURANCE POLICY OR PLAN BENEFITS

SUBCHAPTER A. PAYMENTS TO CERTAIN PUBLIC HOSPITALS

Sec. 1204.001. NONAPPLICABILITY TO CERTAIN FACILITIES. This

subchapter does not apply to indigent care or chronic disease

care provided in or by an eleemosynary institution, sanitarium,

sanitorium, mental health treatment facility, tuberculosis

treatment facility, or cancer treatment facility that is owned or

controlled by the state or by a unit of local government.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,

2005.

Sec. 1204.002. BENEFITS PAYABLE FOR TREATMENT PROVIDED BY

HOSPITAL OWNED BY STATE OR UNIT OF LOCAL GOVERNMENT. An

insurance policy providing hospital, nursing, medical, or

surgical coverage that is issued or delivered in this state after

August 27, 1973, may not include a provision that prevents the

payment of benefits for expenses of a nonindigent patient

incurred in a hospital facility that:

(1) is owned or controlled by the state or by a unit of local

government; and

(2) regularly and customarily demands and collects from

nonindigent persons payment for those expenses.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,

2005.

SUBCHAPTER B. ASSIGNMENT OF BENEFIT PAYMENTS

Sec. 1204.051. DEFINITIONS. In this subchapter:

(1) "Covered person" means a person who is insured or covered by

a health insurance policy or is a participant in an employee

benefit plan. The term includes:

(A) a person covered by a health insurance policy because the

person is an eligible dependent; and

(B) an eligible dependent of a participant in an employee

benefit plan.

(2) "Employee benefit plan" or "plan" means a plan, fund, or

program established or maintained by an employer, an employee

organization, or both, to the extent that it provides, through

the purchase of insurance or otherwise, health care services to

employees, participants, or the dependents of employees or

participants.

(3) "Health care provider" means a person who provides health

care services under a license, certificate, registration, or

other similar evidence of regulation issued by this or another

state of the United States.

(4) "Health care service" means a service to diagnose, prevent,

alleviate, cure, or heal a human illness or injury that is

provided to a covered person by a physician or other health care

provider.

(5) "Health insurance policy" means an individual, group,

blanket, or franchise insurance policy, or an insurance

agreement, that provides reimbursement or indemnity for health

care expenses incurred as a result of an accident or sickness.

(6) "Insurer" means an insurance company, association, or

organization authorized to engage in business in this state under

Chapter 841, 861, 881, 882, 883, 884, 885, 886, 887, 888, 941,

942, or 982.

(7) "Person" means an individual, association, partnership,

corporation, or other legal entity.

(8) "Physician" means an individual licensed to practice

medicine in this or another state of the United States.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,

2005.

Sec. 1204.052. APPLICABILITY TO CERTAIN PLANS OR PROGRAMS. This

subchapter applies to:

(1) an employee benefit plan, to the extent not preempted by the

Employee Retirement Income Security Act of 1974 (29 U.S.C.

Section 1001 et seq.);

(2) benefit programs under Chapters 1551 and 1601, to the extent

that the benefit programs are self-insuring; and

(3) insurance coverage provided under Chapter 1575.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,

2005.

Sec. 1204.053. ASSIGNMENT OF BENEFITS. (a) An insurer may not

deliver, renew, or issue for delivery in this state a health

insurance policy that prohibits or restricts a covered person

from making a written assignment of benefits to a physician or

other health care provider who provides health care services to

the person.

(b) This section does not:

(1) provide a coverage or benefit that is not otherwise

available under the health insurance policy;

(2) allow assignment of a benefit to:

(A) a person who is not legally entitled to receive such a

direct payment; or

(B) another person if, under the health insurance policy or

plan, the benefit must be provided to the covered person by a

physician or other health care provider who is a contractor or

preferred provider under the policy; or

(3) prohibit an insurer from verifying, through the insurer's

normal process, the health care services the physician or other

health care provider provides to the covered person.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,

2005.

Sec. 1204.054. PAYMENT OF BENEFITS ACCORDING TO ASSIGNMENT. An

insurer shall pay benefits directly to a physician or other

health care provider, and the insurer is relieved of the

obligation to pay, and of any liability for paying, those

benefits to the covered person if:

(1) the covered person makes a written assignment of those

benefits payable to the physician or other health care provider;

and

(2) the assignment is obtained by or delivered to the insurer

with the claim for benefits.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,

2005.

Sec. 1204.055. CONTRACTUAL RESPONSIBILITY FOR DEDUCTIBLES AND

COPAYMENTS. (a) The payment of benefits under an assignment

does not relieve a covered person of a contractual obligation to

pay a deductible or copayment.

(b) A physician or other health care provider may not waive a

deductible or copayment by the acceptance of an assignment.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,

2005.

SUBCHAPTER C. UNIFORM CLAIM BILLING FORMS

Sec. 1204.101. DEFINITIONS. In this subchapter:

(1) "Health benefit plan" means a group, blanket, or franchise

insurance policy, a group hospital service contract, or a group

subscriber contract or evidence of coverage issued by a health

maintenance organization, that provides benefits for health care

services.

(2) "Health benefit plan issuer" means an entity authorized

under this code or another insurance law of this state that

provides health insurance or health benefits in this state,

including:

(A) an insurance company;

(B) a group hospital service corporation operating under Chapter

842;

(C) a health maintenance organization operating under Chapter

843; and

(D) a stipulated premium company operating under Chapter 884.

(3) "Provider" means a person who provides health care under a

license issued by this state. The term includes a health care

practitioner listed in Section 1451.001 and a nurse first

assistant, as defined by Section 1451.101.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,

2005.

Sec. 1204.102. REQUIRED CLAIM BILLING FORMS. A provider who

seeks payment or reimbursement under a health benefit plan and

the health benefit plan issuer that issued the plan shall use

uniform claim billing form UB-82/HCFA or HCFA 1500, or a

successor to one of those forms, as developed by the National

Uniform Billing Committee or its successor.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,

2005.

SUBCHAPTER D. PAYMENTS FOR CERTAIN PUBLICLY PROVIDED SERVICES

Sec. 1204.151. DEFINITION. In this subchapter, "policy" means

an individual or group policy of accident and health insurance,

including a policy issued by a group hospital service corporation

operating under Chapter 842.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,

2005.

Sec. 1204.152. PAYMENT FOR CERTAIN EXPENSES INCURRED BY TEXAS

DEPARTMENT OF HUMAN SERVICES. Each policy delivered or issued

for delivery in this state must provide for the repayment of the

actual costs of medical expenses the Texas Department of Human

Services pays through medical assistance for an insured person

if, under the policy, the insured person is entitled to payment

for the medical expenses.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,

2005.

Sec. 1204.153. PAYMENTS TO TEXAS DEPARTMENT OF HUMAN SERVICES

FOR CERTAIN CHILDREN. (a) This section applies only to a policy

that is delivered, issued for delivery, or renewed in this state

and that provides coverage for a child whose parent:

(1) purchased the policy; or

(2) is a member of the group covered under the policy.

(b) Each policy must include a requirement that, after written

notice to the insurer or group hospital service corporation at

the insurer's or group hospital service corporation's home

office, benefits payable on behalf of a child must be paid to the

Texas Department of Human Services if:

(1) the parent who purchased the policy or who is a group member

is required to pay child support by a court order or

court-approved agreement and:

(A) is a possessory conservator of the child under a court order

issued in this state; or

(B) is not entitled to possession of or access to the child;

(2) the Texas Department of Human Services is paying benefits on

behalf of the child under Chapter 31 or 32, Human Resources Code;

and

(3) the insurer or group hospital service corporation is

notified, through an attachment to the claim for benefits at the

time the claim is first submitted to the insurer or group

hospital service corporation, that the benefits must be paid

directly to the Texas Department of Human Services.

(c) The commissioner and the Texas Department of Human Services

may consult regarding implementation of this section.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,

2005.

Sec. 1204.154. UNIFORM PROVISIONS. (a) The commissioner shall

adopt uniform policy provisions, riders, and endorsements for the

policy requirement of Section 1204.153.

(b) Before the commissioner adopts or makes a change to a

provision, rider, or endorsement under Subsection (a), the

commissioner shall present each provision, rider, or endorsement,

and any amendment to a provision, rider, or endorsement, to the

Texas Department of Human Services for comment.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,

2005.

SUBCHAPTER E. EXCLUSIONARY CLAUSES

Sec. 1204.201. PROHIBITION OF EXCLUSION OF CERTAIN MEDICAL

ASSISTANCE BENEFITS. An individual or group accident and health

insurance policy delivered or issued for delivery in this state,

including a policy issued by a group hospital service corporation

operating under Chapter 842, may not include a provision that

excludes or limits the insurer's or group hospital service

corporation's coverage from paying benefits covered by Chapter

32, Human Resources Code.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,

2005.

SUBCHAPTER F. PAYMENT OF BENEFITS TO CONSERVATOR OF MINOR

Sec. 1204.251. PAYMENT TO CONSERVATOR OTHER THAN GROUP MEMBER.

(a) An insurer or group hospital service corporation operating

under Chapter 842 that delivers, issues for delivery, or renews

in this state a group accident and health insurance policy that

provides coverage for a minor child who qualifies as a dependent

of a group member may pay benefits on the child's behalf to a

person who is not a group member if an order providing for the

appointment of a possessory or managing conservator of the child

has been issued by a court in this or another state.

(b) A person who is not a group member is entitled to be paid

benefits under this section only if the person presents to the

insurer or group hospital service corporation, with the claim

application:

(1) written notice that the person is a possessory or managing

conservator of the child on whose behalf the claim is made; and

(2) a certified copy of a court order designating the person as

possessory or managing conservator of the child or other evidence

designated by rule of the commissioner that the person is

eligible for the benefits as this section provides.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,

2005.

Sec. 1204.252. PRECONDITIONS FOR PAYMENT; EXCEPTIONS. (a) In

accordance with the terms of the policy and this subchapter, an

insurer or group hospital service corporation may be required to

pay benefits under a group accident and health insurance policy

to a person who is not a group member and who complies with:

(1) Section 1204.251;

(2) the insurer's or group hospital service corporation's claim

application procedures; and

(3) department rules.

(b) Any requirement imposed on a possessory or managing

conservator of a child under this subchapter does not apply with

regard to:

(1) an unpaid medical bill for which an assignment of benefits

has been exercised, whether in accordance with policy provisions

or otherwise; or

(2) a claim presented by a group member for which the group

member paid any portion of a medical bill that is covered under

the policy's terms.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,

2005.

Sec. 1204.253. RULES. The commissioner may adopt rules to

ensure the effective implementation of this subchapter.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,

2005.