CHAPTER 1301. PREFERRED PROVIDER BENEFIT PLANS
INSURANCE CODE
TITLE 8. HEALTH INSURANCE AND OTHER HEALTH COVERAGES
SUBTITLE D. PROVIDER PLANS
CHAPTER 1301. PREFERRED PROVIDER BENEFIT PLANS
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 1301.001. DEFINITIONS. In this chapter:
(1) "Health care provider" means a practitioner, institutional
provider, or other person or organization that furnishes health
care services and that is licensed or otherwise authorized to
practice in this state. The term does not include a physician.
(2) "Health insurance policy" means a group or individual
insurance policy, certificate, or contract providing benefits for
medical or surgical expenses incurred as a result of an accident
or sickness.
(3) "Hospital" means a licensed public or private institution as
defined by Chapter 241, Health and Safety Code, or Subtitle C,
Title 7, Health and Safety Code.
(4) "Institutional provider" means a hospital, nursing home, or
other medical or health-related service facility that provides
care for the sick or injured or other care that may be covered in
a health insurance policy.
(5) "Insurer" means a life, health, and accident insurance
company, health and accident insurance company, health insurance
company, or other company operating under Chapter 841, 842, 884,
885, 982, or 1501, that is authorized to issue, deliver, or issue
for delivery in this state health insurance policies.
(6) "Physician" means a person licensed to practice medicine in
this state.
(7) "Practitioner" means a person who practices a healing art
and is a practitioner described by Section 1451.001 or 1451.101.
(7-a) "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.
(8) "Preferred provider" means a physician or health care
provider, or an organization of physicians or health care
providers, who contracts with an insurer to provide medical care
or health care to insureds covered by a health insurance policy.
(9) "Preferred provider benefit plan" means a benefit plan in
which an insurer provides, through its health insurance policy,
for the payment of a level of coverage that is different from the
basic level of coverage provided by the health insurance policy
if the insured person uses a preferred provider.
(10) "Service area" means a geographic area or areas specified
in a health insurance policy or preferred provider contract in
which a network of preferred providers is offered and available.
(11) "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.
(12) "Freestanding emergency medical care facility" means a
facility licensed under Chapter 254, Health and Safety Code.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Amended by:
Acts 2005, 79th Leg., Ch.
728, Sec. 11.033(a), eff. September 1, 2005.
Acts 2009, 81st Leg., R.S., Ch.
1273, Sec. 4, eff. March 1, 2010.
Sec. 1301.002. NONAPPLICABILITY TO DENTAL CARE BENEFITS. This
chapter does not apply to a provision for dental care benefits in
a health insurance policy.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Sec. 1301.003. PREFERRED PROVIDER BENEFIT PLANS PERMITTED. A
health insurance policy that provides different benefits from the
basic level of coverage for the use of preferred providers and
that meets the requirements of this chapter is not:
(1) unjust under Chapter 1701;
(2) unfair discrimination under Subchapter A or B, Chapter 544;
or
(3) a violation of Subchapter B or C, Chapter 1451.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Sec. 1301.0041. APPLICABILITY. This chapter applies to any
preferred provider benefit plan in which an insurer provides,
through the insurer's health insurance policy, for the payment of
a level of coverage that is different from the basic level of
coverage provided by the health insurance policy if the insured
uses a preferred provider.
Added by Acts 2007, 80th Leg., R.S., Ch.
730, Sec. 3B.0271(b), eff. September 1, 2007.
Added by Acts 2007, 80th Leg., R.S., Ch.
921, Sec. 9.0271(b), eff. September 1, 2007.
Sec. 1301.0045. CONSTRUCTION OF CHAPTER. Except as provided by
Section 1301.0046, this chapter may not be construed to limit the
level of reimbursement or the level of coverage, including
deductibles, copayments, coinsurance, or other cost-sharing
provisions, that are applicable to preferred providers or
nonpreferred providers.
Added by Acts 2005, 79th Leg., Ch.
1221, Sec. 1, eff. September 1, 2005.
Sec. 1301.0046. COINSURANCE REQUIREMENTS FOR SERVICES OF
NONPREFERRED PROVIDERS. The insured's coinsurance applicable to
payment to nonpreferred providers may not exceed 50 percent of
the total covered amount applicable to the medical or health care
services.
Added by Acts 2005, 79th Leg., Ch.
1221, Sec. 1, eff. September 1, 2005.
Sec. 1301.005. AVAILABILITY OF PREFERRED PROVIDERS. (a) An
insurer offering a preferred provider benefit plan shall ensure
that both preferred provider benefits and basic level benefits
are reasonably available to all insureds within a designated
service area.
(b) If services are not available through a preferred provider
within the service area, an insurer shall reimburse a physician
or health care provider who is not a preferred provider at the
same percentage level of reimbursement as a preferred provider
would have been reimbursed had the insured been treated by a
preferred provider.
(c) Subsection (b) does not require reimbursement at a preferred
level of coverage solely because an insured resides out of the
service area and chooses to receive services from a provider
other than a preferred provider for the insured's own
convenience.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Sec. 1301.0055. NETWORK ADEQUACY STANDARDS. The commissioner
shall by rule adopt network adequacy standards that:
(1) are adapted to local markets in which an insurer offering a
preferred provider benefit plan operates;
(2) ensure availability of, and accessibility to, a full range
of contracted physicians and health care providers to provide
health care services to insureds; and
(3) on good cause shown, may allow departure from local market
network adequacy standards if the commissioner posts on the
department's Internet website the name of the preferred provider
plan, the insurer offering the plan, and the affected local
market.
Added by Acts 2009, 81st Leg., R.S., Ch.
1290, Sec. 2, eff. June 19, 2009.
Sec. 1301.006. AVAILABILITY OF AND ACCESSIBILITY TO HEALTH CARE
SERVICES. An insurer that markets a preferred provider benefit
plan shall contract with physicians and health care providers to
ensure that all medical and health care services and items
contained in the package of benefits for which coverage is
provided, including treatment of illnesses and injuries, will be
provided under the health insurance policy in a manner ensuring
availability of and accessibility to adequate personnel,
specialty care, and facilities.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Sec. 1301.0061. TERMS OF ENROLLEE ELIGIBILITY. (a) A contract
between an insurer and a group policyholder under a preferred
provider benefit plan must provide that:
(1) in addition to any other premiums for which the group
policyholder is liable, the group policyholder is liable for an
individual insured's premiums from the time the individual is no
longer part of the group eligible for coverage under the policy
until the end of the month in which the policyholder notifies the
insurer that the individual is no longer part of the group
eligible for coverage under the policy; and
(2) the individual remains covered under the policy until the
end of that period.
(b) Each insurer that enters into a contract described by
Subsection (a) shall notify the group policyholder periodically
as provided by this section that the policyholder is liable for
premiums on an individual who is no longer part of the group
eligible for coverage until the insurer receives notification of
termination of the individual's eligibility for coverage.
(c) If the insurer charges the group policyholder on a monthly
basis for the premiums, the insurer shall include the notice
required by Subsection (b) in each monthly statement sent to the
group policyholder. If the insurer charges the group
policyholder on other than a monthly basis for the premiums, the
insurer shall notify the group policyholder periodically in the
manner prescribed by the commissioner by rule.
(d) The notice required by Subsection (b) must include a
description of methods preferred by the insurer for notification
by a group policyholder of an individual's termination from
coverage eligibility.
Added by Acts 2005, 79th Leg., Ch.
669, Sec. 1, eff. September 1, 2005.
Amended by:
Acts 2009, 81st Leg., R.S., Ch.
1217, Sec. 2, eff. September 1, 2009.
Sec. 1301.007. RULES. The commissioner shall adopt rules as
necessary to:
(1) implement this chapter; and
(2) ensure reasonable accessibility and availability of
preferred provider services to residents of this state.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Amended by:
Acts 2005, 79th Leg., Ch.
1221, Sec. 2, eff. September 1, 2005.
Sec. 1301.008. CONFLICT WITH OTHER LAW. To the extent of any
conflict between this chapter and Subchapter C, Chapter 1204,
this chapter controls.
Added by Acts 2005, 79th Leg., Ch.
728, Sec. 11.037(c), eff. September 1, 2005.
Sec. 1301.009. ANNUAL REPORT. (a) Not later than March 1 of
each year, an insurer shall file with the commissioner a report
relating to the preferred provider benefit plan offered under
this chapter and covering the preceding calendar year.
(b) The report shall:
(1) be verified by at least two principal officers;
(2) be in a form prescribed by the commissioner; and
(3) include:
(A) a financial statement of the insurer, including its balance
sheet and receipts and disbursements for the preceding calendar
year, certified by an independent public accountant;
(B) the number of individuals enrolled during the preceding
calendar year, the number of enrollees as of the end of that
year, and the number of enrollments terminated during that year;
and
(C) a statement of:
(i) an evaluation of enrollee satisfaction;
(ii) an evaluation of quality of care;
(iii) coverage areas;
(iv) accreditation status;
(v) premium costs;
(vi) plan costs;
(vii) premium increases;
(viii) the range of benefits provided;
(ix) copayments and deductibles;
(x) the accuracy and speed of claims payment by the insurer for
the plan;
(xi) the credentials of physicians who are preferred providers;
and
(xii) the number of preferred providers.
(c) The annual report filed by the insurer shall be made
publicly available on the department's website in a user-friendly
format that allows consumers to make direct comparisons of the
financial and other data reported by insurers under this section.
(d) An insurer providing group coverage of $10 million or less
in premiums or individual coverage of $2 million or less in
premiums is not required to report the data required under
Subsection (b)(3)(C).
Added by Acts 2007, 80th Leg., R.S., Ch.
997, Sec. 10, eff. September 1, 2007.
SUBCHAPTER B. RELATIONS WITH PHYSICIANS OR HEALTH CARE PROVIDERS
Sec. 1301.051. DESIGNATION AS PREFERRED PROVIDER. (a) An
insurer shall afford a fair, reasonable, and equivalent
opportunity to apply to be and to be designated as a preferred
provider to practitioners and institutional providers and to
health care providers other than practitioners and institutional
providers, if those other health care providers are included by
the insurer as preferred providers, provided that the
practitioners, institutional providers, or health care providers:
(1) are licensed to treat injuries or illnesses or to provide
services covered by a health insurance policy; and
(2) comply with the terms established by the insurer for
designation as preferred providers.
(b) An insurer may not unreasonably withhold a designation as a
preferred provider.
(c) An insurer shall give a physician or health care provider
who, on the person's initial application, is not designated as a
preferred provider written reasons for denial of the designation.
(d) Unless otherwise limited by this code, this section does not
prohibit an insurer from rejecting a physician's or health care
provider's application for designation based on a determination
that the preferred provider benefit plan has sufficient qualified
providers.
(e) An insurer may not withhold a designation to a podiatrist
described by Section 1301.0521.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Amended by:
Acts 2005, 79th Leg., Ch.
728, Sec. 11.034(a), eff. September 1, 2005.
Sec. 1301.0515. ACUPUNCTURIST SERVICES. (a) An insurer
offering a preferred provider benefit plan that includes
acupuncture in the services covered by the plan may not refuse to
provide reimbursement for the performance of a covered
acupuncture service solely because the service is provided by an
acupuncturist.
(b) This section does not require an insurer to offer
acupuncture as a covered service.
Added by Acts 2005, 79th Leg., Ch.
622, Sec. 2, eff. September 1, 2005.
Sec. 1301.052. DESIGNATION OF ADVANCED PRACTICE NURSE OR
PHYSICIAN ASSISTANT AS PREFERRED PROVIDER. An insurer offering a
preferred provider benefit plan may not refuse a request made by
a physician participating as a preferred provider under the plan
and an advanced practice nurse or physician assistant to have the
advanced practice nurse or physician assistant included as a
preferred provider under the plan if:
(1) the advanced practice nurse or physician assistant is
authorized by the physician to provide care under Subchapter B,
Chapter 157, Occupations Code; and
(2) the advanced practice nurse or physician assistant meets the
quality of care standards previously established by the insurer
for participation in the plan by advanced practice nurses and
physician assistants.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Sec. 1301.0521. DESIGNATION OF CERTAIN PODIATRISTS AS PREFERRED
PROVIDERS. (a) Notwithstanding Section 1301.051, an insurer may
not withhold the designation of preferred provider to a
podiatrist licensed by the Texas State Board of Podiatric Medical
Examiners who:
(1) joins the professional practice of a contracted preferred
provider;
(2) applies to the insurer for designation as a preferred
provider; and
(3) complies with the terms and conditions of eligibility to be
a preferred provider.
(b) A podiatrist designated as a preferred provider under this
section must comply with the terms of the preferred provider
contract used by the insurer or the insurer's network provider.
Added by Acts 2005, 79th Leg., Ch.
728, Sec. 11.035(a), eff. September 1, 2005.
Sec. 1301.053. APPEAL RELATING TO DESIGNATION AS PREFERRED
PROVIDER. (a) An insurer that does not designate a practitioner
as a preferred provider shall provide a reasonable mechanism for
reviewing that action. The review mechanism must incorporate, in
an advisory role only, a review panel.
(b) A review panel must be composed of at least three
individuals selected by the insurer from a list of participating
practitioners and must include one member who is a practitioner
in the same or similar specialty as the affected practitioner, if
available. The practitioners contracting with the insurer in the
applicable service area shall provide the list of practitioners
to the insurer.
(c) On request, the insurer shall provide to the affected
practitioner:
(1) the panel's recommendation, if any; and
(2) a written explanation of the insurer's determination, if
that determination is contrary to the panel's recommendation.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Sec. 1301.054. NOTICE TO PRACTITIONERS OF PREFERRED PROVIDER
BENEFIT PLAN. (a) When sponsoring a preferred provider benefit
plan, an insurer shall immediately notify each practitioner in
the plan's service area of the insurer's intent to offer the plan
and of the opportunity to participate. The notification must be
made by publication or in writing to each practitioner.
(b) After establishing a preferred provider benefit plan, an
insurer shall annually provide notice of and an opportunity to
participate in the plan to practitioners in the plan's service
area who do not participate in the plan.
(c) On request, an insurer shall provide to any physician or
health care provider information concerning the application
process and qualification requirements for participation as a
preferred provider in the plan.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Sec. 1301.055. COMPLAINT RESOLUTION. (a) Each contract under a
preferred provider benefit plan between an insurer and a
physician or other practitioner or a physicians' group must have
a mechanism for resolving complaints initiated by an insured, a
physician or other practitioner, or a physicians' group.
(b) A complaint resolution mechanism must provide for reasonable
due process that includes, in an advisory role only, a review
panel selected in the manner described by Section 1301.053(b).
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Sec. 1301.056. RESTRICTIONS ON PAYMENT AND REIMBURSEMENT. (a)
An insurer or third-party administrator may not reimburse a
physician or other practitioner, institutional provider, or
organization of physicians and health care providers on a
discounted fee basis for covered services that are provided to an
insured unless:
(1) the insurer or third-party administrator has contracted with
either:
(A) the physician or other practitioner, institutional provider,
or organization of physicians and health care providers; or
(B) a preferred provider organization that has a network of
preferred providers and that has contracted with the physician or
other practitioner, institutional provider, or organization of
physicians and health care providers;
(2) the physician or other practitioner, institutional provider,
or organization of physicians and health care providers has
agreed to the contract and has agreed to provide health care
services under the terms of the contract; and
(3) the insurer or third-party administrator has agreed to
provide coverage for those health care services under the health
insurance policy.
(b) A party to a preferred provider contract, including a
contract with a preferred provider organization, may not sell,
lease, or otherwise transfer information regarding the payment or
reimbursement terms of the contract without the express authority
of and prior adequate notification to the other contracting
parties. This subsection does not affect the authority of the
commissioner of insurance or the commissioner of workers'
compensation under this code or Title 5, Labor Code, to request
and obtain information.
(c) An insurer or third-party administrator who violates this
section:
(1) commits an unfair claim settlement practice in violation of
Subchapter A, Chapter 542; and
(2) is subject to administrative penalties under Chapters 82 and
84.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Amended by:
Acts 2005, 79th Leg., Ch.
265, Sec. 6.061, eff. September 1, 2005.
Sec. 1301.057. TERMINATION OF PARTICIPATION; EXPEDITED REVIEW
PROCESS. (a) Before terminating a contract with a preferred
provider, an insurer shall:
(1) provide written reasons for the termination; and
(2) if the affected provider is a practitioner, provide, on
request, a reasonable review mechanism, except in a case
involving:
(A) imminent harm to a patient's health;
(B) an action by a state medical or other physician licensing
board or other government agency that effectively impairs the
practitioner's ability to practice medicine; or
(C) fraud or malfeasance.
(b) The review mechanism described by Subsection (a)(2) must
incorporate, in an advisory role only, a review panel selected in
the manner described by Section 1301.053(b) and must be completed
within a period not to exceed 60 days.
(c) The insurer shall provide to the affected practitioner:
(1) the panel's recommendation, if any; and
(2) on request, a written explanation of the insurer's
determination, if that determination is contrary to the panel's
recommendation.
(d) On request, an insurer shall make an expedited review
available to a practitioner whose participation in a preferred
provider benefit plan is being terminated. The expedited review
process must comply with rules established by the commissioner.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Sec. 1301.058. ECONOMIC PROFILING. An insurer that conducts,
uses, or relies on economic profiling to admit or terminate the
participation of physicians or health care providers in a
preferred provider benefit plan shall make available to a
physician or health care provider on request the economic profile
of that physician or health care provider, including the written
criteria by which the physician or health care provider's
performance is to be measured. An economic profile must be
adjusted to recognize the characteristics of a physician's or
health care provider's practice that may account for variations
from expected costs.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Sec. 1301.059. QUALITY ASSESSMENT. (a) In this section,
"quality assessment" means a mechanism used by an insurer to
evaluate, monitor, or improve the quality and effectiveness of
the medical care delivered by physicians or health care providers
to persons covered by a health insurance policy to ensure that
the care delivered is consistent with the care delivered by an
ordinary, reasonable, and prudent physician or health care
provider under the same or similar circumstances.
(b) An insurer may not engage in quality assessment except
through a panel of at least three physicians selected by the
insurer from among a list of physicians contracting with the
insurer. The physicians contracting with the insurer in the
applicable service area shall provide the list of physicians to
the insurer.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Sec. 1301.060. COMPENSATION ON DISCOUNTED FEE BASIS. A
preferred provider contract must include a provision by which the
physician or health care provider agrees that if the preferred
provider is compensated on a discounted fee basis, the insured
may be billed only on the discounted fee and not the full charge.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Sec. 1301.061. PREFERRED PROVIDER NETWORKS. (a) An insurer may
enter into an agreement with a preferred provider organization
for the purposes of offering a network of preferred providers.
The agreement may provide that either the insurer or the
preferred provider organization on the insurer's behalf will
comply with the notice requirements and other requirements
imposed on the insurer by this subchapter.
(b) An insurer that enters into an agreement with a preferred
provider organization under this section shall meet the
requirements of this chapter or ensure that those requirements
are met.
(c) Each preferred provider benefit plan offered in this state
must comply with this chapter.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Amended by:
Acts 2007, 80th Leg., R.S., Ch.
730, Sec. 3B.0271(a), eff. September 1, 2007.
Sec. 1301.062. PREFERRED PROVIDER CONTRACTS BETWEEN INSURERS AND
PODIATRISTS. A preferred provider contract between an insurer
and a podiatrist licensed by the Texas State Board of Podiatric
Medical Examiners must provide that:
(1) the podiatrist may request a copy of the coding guidelines
and payment schedules applicable to the compensation that the
podiatrist will receive under the contract for services;
(2) the insurer shall provide a copy of the coding guidelines
and payment schedules not later than the 30th day after the date
of the podiatrist's request;
(3) the insurer may not unilaterally make material retroactive
revisions to the coding guidelines and payment schedules; and
(4) the podiatrist may, practicing within the scope of the law
regulating podiatry, furnish x-rays and nonprefabricated
orthotics covered by the health insurance policy.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Sec. 1301.063. CONTRACT PROVISIONS RELATING TO USE OF
HOSPITALIST. (a) In this section, "hospitalist" means a
physician who:
(1) serves as physician of record at a hospital for a
hospitalized patient of another physician; and
(2) returns the care of the patient to that other physician at
the end of the patient's hospitalization.
(b) A preferred provider contract between an insurer and a
physician may not require the physician to use a hospitalist for
a hospitalized patient.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Sec. 1301.064. CONTRACT PROVISIONS RELATING TO PAYMENT OF
CLAIMS. Subject to Subchapter C, a preferred provider contract
must provide for payment to a physician or health care provider
for health care services and benefits provided to an insured
under the contract and to which the insured is entitled under the
terms of the contract not later than:
(1) the 45th day after the date on which a claim for payment is
received with the documentation reasonably necessary to process
the claim; or
(2) if applicable, within the number of calendar days specified
by written agreement between the physician or health care
provider and the insurer.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Sec. 1301.0641. CONTRACT PROVISIONS PROHIBITING REJECTION OF
BATCHED CLAIMS. (a) If requested by a preferred provider, an
insurer shall include a provision in the preferred provider's
contract providing that the insurer or the insurer's
clearinghouse may not refuse to process or pay an electronically
submitted clean claim, as defined by Subchapter C, because the
claim is submitted together with or in a batch submission with a
claim that is not a clean claim.
(b) In accordance with Chapters 82 and 84, the commissioner may
issue a cease and desist order against or impose sanctions on an
insurer that violates this section or a contract provision
adopted under this section.
Added by Acts 2005, 79th Leg., Ch.
668, Sec. 2, eff. September 1, 2005.
Sec. 1301.065. SHIFTING OF INSURER'S TORT LIABILITY PROHIBITED.
A preferred provider contract may not require any physician,
health care provider, or physicians' group to execute a hold
harmless clause to shift the insurer's tort liability resulting
from the insurer's acts or omissions to the preferred provider.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Sec. 1301.066. RETALIATION AGAINST PREFERRED PROVIDER
PROHIBITED. An insurer may not engage in any retaliatory action
against a physician or health care provider, including
terminating the physician's or provider's participation in the
preferred provider benefit plan or refusing to renew the
physician's or provider's contract, because the physician or
provider has:
(1) on behalf of an insured, reasonably filed a complaint
against the insurer; or
(2) appealed a decision of the insurer.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Sec. 1301.067. INTERFERENCE WITH RELATIONSHIP BETWEEN PATIENT
AND PHYSICIAN OR HEALTH CARE PROVIDER PROHIBITED. (a) An
insurer may not, as a condition of a preferred provider contract
with a physician or health care provider or in any other manner,
prohibit, attempt to prohibit, or discourage a physician or
provider from discussing with or communicating to a current,
prospective, or former patient, or a person designated by a
patient, information or an opinion:
(1) regarding the patient's health care, including the patient's
medical condition or treatment options; or
(2) in good faith regarding the provisions, terms, requirements,
or services of the health insurance policy as they relate to the
patient's medical needs.
(b) An insurer may not in any way penalize, terminate the
participation of, or refuse to compensate for covered services a
physician or health care provider for discussing or communicating
with a current, prospective, or former patient, or a person
designated by a patient, pursuant to this section.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Sec. 1301.068. INDUCEMENT TO LIMIT MEDICALLY NECESSARY SERVICES
PROHIBITED. (a) An insurer may not use any financial incentive
or make payment to a physician or health care provider that acts
directly or indirectly as an inducement to limit medically
necessary services.
(b) This section does not prohibit the use of capitation as a
method of payment.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Sec. 1301.069. SERVICES PROVIDED BY CERTAIN PHYSICIANS AND
HEALTH CARE PROVIDERS. The provisions of this chapter relating
to prompt payment by an insurer of a physician or health care
provider and to verification of medical care or health care
services apply to a physician or provider who:
(1) is not a preferred provider included in the preferred
provider network; and
(2) provides to an insured:
(A) care related to an emergency or its attendant episode of
care as required by state or federal law; or
(B) specialty or other medical care or health care services at
the request of the insurer or a preferred provider because the
services are not reasonably available from a preferred provider
who is included in the preferred delivery network.
Added by Acts 2005, 79th Leg., Ch.
728, Sec. 11.037(d), eff. September 1, 2005.
SUBCHAPTER C. PROMPT PAYMENT OF CLAIMS
Sec. 1301.101. DEFINITION. In this subchapter, "clean claim"
means a claim that complies with Section 1301.131.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Amended by:
Acts 2005, 79th Leg., Ch.
728, Sec. 11.037(a), eff. September 1, 2005.
Sec. 1301.102. SUBMISSION OF CLAIM. (a) A physician or health
care provider must submit a claim to an insurer not later than
the 95th day after the date the physician or provider provides
the medical care or health care services for which the claim is
made.
(b) Except as provided by Chapter 1213, a physician or health
care provider may, as appropriate:
(1) mail a claim by United States mail, first class, or by
overnight delivery service;
(2) submit the claim electronically;
(3) fax the claim; or
(4) hand deliver the claim.
(c) An insurer shall accept as proof of timely filing a claim
filed in compliance with Subsection (b) or information from
another insurer or health maintenance organization showing that
the physician or health care provider submitted the claim to the
insurer or health maintenance organization in compliance with
Subsection (b).
(d) If a physician or health care provider fails to submit a
claim in compliance with this section, the physician or provider
forfeits the right to payment unless the failure to submit the
claim in compliance with this section is a result of a
catastrophic event that substantially interferes with the normal
business operations of the physician or provider.
(e) The period for submitting a claim under this section may be
extended by contract.
(f) A physician or health care provider may not submit a
duplicate claim for payment before the 46th day after the date
the original claim was submitted. The commissioner shall adopt
rules under which an insurer may determine whether a claim is a
duplicate claim.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Amended by:
Acts 2005, 79th Leg., Ch.
728, Sec. 11.037(a), eff. September 1, 2005.
Sec. 1301.1021. RECEIPT OF CLAIM. (a) If a claim for medical
care or health care services provided to a patient is mailed, the
claim is presumed to have been received by the insurer on the
fifth day after the date the claim is mailed or, if the claim is
mailed using overnight service or return receipt requested, on
the date the delivery receipt is signed.
(b) If the claim is submitted electronically, the claim is
presumed to have been received on the date of the electronic
verification of receipt by the insurer or the insurer's
clearinghouse. If the insurer or the insurer's clearinghouse
does not provide a confirmation within 24 hours of submission by
the physician or health care provider, the physician's or
provider's clearinghouse shall provide the confirmation. The
physician's or provider's clearinghouse must be able to verify
that the filing contained the correct payor identification of the
entity to receive the filing.
(c) If the claim is faxed, the claim is presumed to have been
received on the date of the transmission acknowledgment.
(d) If the claim is hand delivered, the claim is presumed to
have been received on the date the delivery receipt is signed.
Amended by:
Acts 2005, 79th Leg., Ch.
728, Sec. 11.037(a), eff. September 1, 2005.
Sec. 1301.103. DEADLINE FOR ACTION ON CLEAN CLAIMS. Except as
provided by Section 1301.1054, not later than the 45th day after
the date an insurer receives a clean claim from a preferred
provider in a nonelectronic format or the 30th day after the date
an insurer receives a clean claim from a preferred provider that
is electronically submitted, the insurer shall make a
determination of whether the claim is payable and:
(1) if the insurer determines the entire claim is payable, pay
the total amount of the claim in accordance with the contract
between the preferred provider and the insurer;
(2) if the insurer determines a portion of the claim is payable,
pay the portion of the claim that is not in dispute and notify
the preferred provider in writing why the remaining portion of
the claim will not be paid; or
(3) if the insurer determines that the claim is not payable,
notify the preferred provider in writing why the claim will not
be paid.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Amended by:
Acts 2005, 79th Leg., Ch.
728, Sec. 11.037(a), eff. September 1, 2005.
Sec. 1301.104. DEADLINE FOR ACTION ON CERTAIN PHARMACY CLAIMS.
Not later than the 21st day after the date an insurer
affirmatively adjudicates a pharmacy claim that is electronically
submitted, the insurer shall pay the total amount of the claim.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Amended by:
Acts 2005, 79th Leg., Ch.
728, Sec. 11.037(a), eff. September 1, 2005.
Sec. 1301.105. AUDITED CLAIMS. (a) Except as provided by
Section 1301.1054, an insurer that intends to audit a claim
submitted by a preferred provider shall pay the charges submitted
at 100 percent of the contracted rate on the claim not later
than:
(1) the 30th day after the date the insurer receives the clean
claim from the preferred provider if the claim is submitted
electronically; or
(2) the 45th day after the date the insurer receives the clean
claim from the preferred provider if the claim is submitted
nonelectronically.
(b) The insurer shall clearly indicate on the explanation of
payment statement in the manner prescribed by the commissioner by
rule that the clean claim is being paid at 100 percent of the
contracted rate, subject to completion of the audit.
(c) If the insurer requests additional information to complete
the audit, the request must describe with specificity the
clinical information requested and relate only to information the
insurer in good faith can demonstrate is specific to the claim or
episode of care. The insurer may not request as a part of the
audit information that is not contained in, or is not in the
process of being incorporated into, the patient's medical or
billing record maintained by a preferred provider.
(d) If the preferred provider does not supply information
reasonably requested by the insurer in connection with the audit,
the insurer may:
(1) notify the provider in writing that the provider must
provide the information not later than the 45th day after the
date of the notice or forfeit the amount of the claim; and
(2) if the provider does not provide the information required by
this section, recover the amount of the claim.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Amended by:
Acts 2005, 79th Leg., Ch.
728, Sec. 11.037(a), eff. September 1, 2005.
Sec. 1301.1051. COMPLETION OF AUDIT. The insurer must complete
an audit under Section 1301.105 on or before the 180th day after
the date the clean claim is received by the insurer, and any
additional payment due a preferred provider or any refund due the
insurer shall be made not later than the 30th day after the
completion of the audit.
Amended by:
Acts 2005, 79th Leg., Ch.
728, Sec. 11.037(a), eff. September 1, 2005.
Sec. 1301.1052. PREFERRED PROVIDER APPEAL AFTER AUDIT. If a
preferred provider disagrees with a refund request made by an
insurer based on an audit under Section 1301.105, the insurer
shall provide the provider with an opportunity to appeal, and the
insurer may not attempt to recover the payment until all appeal
rights are exhausted.
Amended by:
Acts 2005, 79th Leg., Ch.
728, Sec. 11.037(a), eff. September 1, 2005.
Sec. 1301.1053. DEADLINES NOT EXTENDED. The investigation and
determination of payment, including any coordination of other
payments, does not extend the period for determining whether a
claim is payable under Section 1301.103 or 1301.104 or for
auditing a claim under Section 1301.105.
Amended by:
Acts 2005, 79th Leg., Ch.
728, Sec. 11.037(a), eff. September 1, 2005.
Sec. 1301.1054. REQUESTS FOR ADDITIONAL INFORMATION. (a) If an
insurer needs additional information from a treating preferred
provider to determine payment, the insurer, not later than the
30th calendar day after the date the insurer receives a clean
claim, shall request in writing that the preferred provider
provide an attachment to the claim that is relevant and necessary
for clarification of the claim. The request must describe with
specificity the clinical information requested and relate only to
information the insurer can demonstrate is specific to the claim
or the claim's related episode of care. The preferred provider
is not required to provide an attachment that is not contained
in, or is not in the process of being incorporated into, the
patient's medical or billing record maintained by a preferred
provider.
(b) An insurer that requests an attachment under Subsection (a)
shall determine whether the claim is payable on or before the
later of the 15th day after the date the insurer receives the
requested attachment or the latest date for determining whether
the claim is payable under Section 1301.103 or 1301.104.
(c) An insurer may not make more than one request under
Subsection (a) in connection with a claim. Sections 1301.102(b)
and 1301.1021 apply to a request for and submission of an
attachment under Subsection (a).
(d) If an insurer requests an attachment or other information
from a person other than the preferred provider who submitted the
claim, the insurer shall provide notice containing the name of
the physician or health care provider from whom the insurer is
requesting information to the preferred provider who submitted
the claim. The insurer may not withhold payment pending receipt
of an attachment or information requested under this subsection.
If on receiving an attachment or information requested under this
subsection the insurer determines that there was an error in
payment of the claim, the insurer may recover any overpayment
under Section 1301.132.
(e) The commissioner shall adopt rules under which an insurer
can easily identify attachments or other information submitted by
a physician or health care provider under this section.
Amended by:
Acts 2005, 79th Leg., Ch.
728, Sec. 11.037(a), eff. September 1, 2005.
Sec. 1301.106. CLAIMS PROCESSING PROCEDURES AND CLAIMS PAYMENT
PROCESSES. (a) An insurer shall provide a preferred provider
with copies of all applicable utilization review policies and
claim processing policies or procedures.
(b) An insurer's claims payment processes shall:
(1) use nationally recognized, generally accepted Current
Procedural Terminology codes, notes, and guidelines, including
all relevant modifiers; and
(2) be consistent with nationally recognized, generally accepted
bundling edits and logic.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Amended by:
Acts 2005, 79th Leg., Ch.
728, Sec. 11.037(a), eff. September 1, 2005.
Sec. 1301.107. CONTRACTUAL WAIVER AND OTHER ACTIONS PROHIBITED.
Except as provided by Section 1301.102(e), the provisions of this
subchapter may not be waived, voided, or nullified by contract.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Amended by:
Acts 2005, 79th Leg., Ch.
728, Sec. 11.037(a), eff. September 1, 2005.
Sec. 1301.108. ATTORNEY'S FEES. A preferred provider may
recover reasonable attorney's fees and court costs in an action
to recover payment under this subchapter.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Amended by:
Acts 2005, 79th Leg., Ch.
728, Sec. 11.037(a), eff. September 1, 2005.
Sec. 1301.109. APPLICABILITY TO ENTITIES CONTRACTING WITH
INSURER. This subchapter applies to a person with whom an
insurer contracts to:
(1) process or pay claims;
(2) obtain the services of physicians and health care providers
to provide health care services to insureds; or
(3) issue verifications or preauthorizations.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,
2005.
Amended by:
Acts 2005, 79th Leg., Ch.
728, Sec. 11.037(a), eff. September 1, 2005.
SUBCHAPTER C-1. OTHER PROVISIONS RELATING TO PAYMENT OF CLAIMS
Sec. 1301.131. ELEMENTS OF CLEAN CLAIM. (a) A nonelectronic
claim by a physician or health care provider, other than an
institutional provider, is a "clean claim" if the claim is
submitted using the Centers for Medicare and Medicaid Services
Form 1500 or, if adopted by the commissioner by rule, a successor
to that form developed by the National Uniform Claim Committee or
the committee's successor. An electronic claim by a physician or
provider, other than an institutional provider, is a "clean
claim" if the claim is submitted using the Professional 837 (ASC
X12N 837) format or, if adopted by the commissioner by rule, a
successor to that format adopted by the Centers for Medicare and
Medicaid Services or the center's successor.
(b) A nonelectronic claim by an institutional provider is a
"clean claim" if the claim is submitted using the Centers for
Medicare and Medicaid Services Form UB-92 or, if adopted by the
commissioner by rule, a successor to that form developed by the
National Uniform Billing Committee or the committee's successor.
An electronic claim by an institutional provider is a "clean
claim" if the claim is submitted using the Institutional 837 (ASC
X12N 837) format or, if adopted by the commissioner by rule, a
successor to that format adopted by the Centers for Medicare and
Medicaid Services or the centers' successor.
(c) The commissioner may adopt rules that specify the
information that must be entered into the appropriate fields on
the applicable claim form for a claim to be a clean claim.
(d) The commissioner may not require any data element for an
electronic claim that is not required in an electronic
transaction set needed to comply with federal law.
(e) An insurer and a preferred provider may agree by contract to
use fewer data elements than are required in an electronic
transaction set needed to comply with federal law.
(f) An otherwise clean claim submitted by a physician or health
care provider that includes additional fields, data elements,
attachments, or other information not required under this section
is considered to be a clean claim for the purposes of this
chapter.
(g) Except as provided by Subsection (e), the provisions of this
section may not be waived, voided, or nullified by contract.
Added by Acts 2005, 79th Leg., Ch.
728, Sec. 11.037(b), eff. September 1, 2005.
Sec. 1301.132. OVERPAYMENT. (a) An insurer may recover an
overpayment to a physician or health care provider if:
(1) not later than the 180th day after the date the physician or
provider receives the payment, the insurer provides written
notice of the overpayment to the physician or provider that
includes the basis and specific reasons for the request for
recovery of funds; and
(2) the physician or provider does not make arrangements for
repayment of the requested funds on or before the 45th day after
the date the physician or provider receives the notice.
(b) If a physician or health care provider disagrees with a
request for recovery of an overpayment, the insurer shall provide
the physician or provider with an opportunity to appeal, and the
insurer may not attempt to recover the overpayment until all
appeal rights are exhausted.
Added by Acts 2005, 79th Leg., Ch.
728, Sec. 11.037(b), eff. September 1, 2005.
Sec. 1301.133. VERIFICATION. (a) In this section,
"verification" includes preauthorization only when
preauthorization is a condition for the verification.
(b) On the request of a preferred provider for verification of a
particular medical care or health care service the preferred
provider proposes to provide to a particular patient, the insurer
shall inform the preferred provider without delay whether the
service, if provided to that patient, will be paid by the insurer
and shall specify any deductibles, copayments, or coinsurance for
which the insured is responsible.
(c) An insurer shall have appropriate personnel reasonably
available at a toll-free telephone number to provide a
verification under this section between 6 a.m. and 6 p.m. central
time Monday through Friday on each day that is not a legal
holiday and between 9 a.m. and noon central time on Saturday,
Sunday, and legal holidays. An insurer must have a telephone
system capable of accepting or recording incoming phone calls for
verifications after 6 p.m. central time Monday through Friday and
after noon central time on Saturday, Sunday, and legal holidays
and responding to each of those calls on or before the second
calendar day after the date the call is received.
(d) An insurer may decline to determine eligibility for payment
if the insurer notifies the physician or preferred provider who
requested the verification of the specific reason the
determination was not made.
(e) An insurer may establish a specific period during which the
verification is valid of not less than 30 days.
(f) An insurer that declines to provide a verification shall
notify the physician or provider who requested the verification
of the specific reason the verification was not provided.
(g) If an insurer has provided a verification for proposed
medical care or health care services, the insurer may not deny or
reduce payment to the physician or provider for those medical
care or health care services if provided to the insured on or
before the 30th day after the date the verification was provided
unless the physician or provider has materially misrepresented
the proposed medical care or health care services or has
substantially failed to perform the proposed medical care or
health care services.
(h) The provisions of this section may not be waived, voided, or
nullified by contract.
Added by Acts 2005, 79th Leg., Ch.
728, Sec. 11.037(b), eff. September 1, 2005.
Sec. 1301.134. COORDINATION OF PAYMENT. (a) An insurer may
require a physician or health care provider to retain in the
physician's or provider's records updated information concerning
other health benefit plan coverage and to provide the information
to the insurer on the applicable form described by Section
1301.131. Except as provided by this subsection, an insurer may
not require a physician or provider to investigate coordination
of other health benefit plan coverage.
(b) Coordination of payment under this section does not extend
the period for determining whether a service is eligible for
payment under Section 1301.103 or 1301.104 or for auditing a
claim under Section 1301.105.
(c) A physician or health care provider who submits a claim for
particular medical care or health care services to more than one
health maintenance organization or insurer shall provide written
notice on the claim submitted to each health maintenance
organization or insurer of the identity of each other health
maintenance organization or insurer with which the same claim is
being filed.
(d) On receipt of notice under Subsection (c), an insurer shall
coordinate and determine the appropriate payment for each health
maintenance organization or insurer to make to the physician or
health care provider.
(e) Except as provided by Subsection (f), if an insurer is a
secondary payor and pays a portion of a claim that should have
been paid by the insurer or health maintenance organization that
is the primary payor, the overpayment may only be recovered from
the health maintenance organization or insurer that is primarily
responsible for that amount.
(f) If the portion of the claim overpaid by the secondary
insurer was also paid by the primary health maintenance
organization or insurer, the secondary insurer may recover the
amount of overpayment under Section 1301.132 from the physician
or health care provider who received the payment. An insurer
processing an electronic claim as a secondary payor shall rely on
the primary payor information submitted on the claim by the
physician or provider. Primary payor information may be
submitted electronically by the primary payor to the secondary
payor.
(g) An insurer may share information with a health maintenance
organization or another insurer to the extent necessary to
coordinate appropriate payment obligations on a specific claim.
(h) The provisions of this section may not be waived, voided, or
nullified by contract.
Added by Acts 2005, 79th Leg., Ch.
728, Sec. 11.037(b), eff. September 1, 2005.
Sec. 1301.135. PREAUTHORIZATION OF MEDICAL AND HEALTH CARE
SERVICES. (a) An insurer that uses a preauthorization process
for medical care and health care services shall provide to each
preferred provider, not later than the 10th business day after
the date a request is made, a list of medical care and health
care services that require preauthorization and information
concerning the preauthorization process.
(b) If proposed medical care or health care services require
preauthorization as a condition of the insurer's payment to a
preferred provider under a health insurance policy, the insurer
shall determine whether the medical care or health care services
proposed to be provided to the insured are medically necessary
and appropriate.
(c) On receipt of a request from a preferred provider for
preauthorization, the insurer shall review and issue a
determination indicating whether the proposed medical care or
health care services are preauthorized. The determination must
be issued and transmitted not later than the third calendar day
after the date the request is received by the insurer.
(d) If the proposed medical care or health care services involve
inpatient care and the insurer requires preauthorization as a
condition of payment, the insurer shall review the request and
issue a length of stay for the admission into a health care
facility based on the recommendation of the patient's physician
or health care provider and the insurer's written medically
accepted screening criteria and review procedures. If the
proposed medical or health care services are to be provided to a
patient who is an inpatient in a health care facility at the time
the services are proposed, the insurer shall review the request
and issue a determination indicating whether proposed services
are preauthorized within 24 hours of the request by the physician
or provider.
(e) An insurer shall have appropriate personnel reasonably
available at a toll-free telephone number to respond to requests
for a preauthorization between 6 a.m. and 6 p.m. central time
Monday through Friday on each day that is not a legal holiday and
between 9 a.m. and noon central time on Saturday, Sunday, and
legal holidays. An insurer must have a telephone system capable
of accepting or recording incoming phone calls for
preauthorizations after 6 p.m. central time Monday through Friday
and after noon central time on Saturday, Sunday, and legal
holidays and responding to each of those calls not later than 24
hours after the call is received.
(f) If an insurer has preauthorized medical care or health care
services, the insurer may not deny or reduce payment to the
physician or health care provider for those services based on
medical necessity or appropriateness of care unless the physician
or provider has materially misrepresented the proposed medical or
health care services or has substantially failed to perform the
proposed medical or health care services.
(g) This section applies to an agent or other person with whom
an insurer contracts to perform, or to whom the insurer delegates
the performance of, preauthorization of proposed medical or
health care services.
(h) The provisions of this section may not be waived, voided, or
nullified by contract.
Added by Acts 2005, 79th Leg., Ch.
728, Sec. 11.037(b), eff. September 1, 2005.
Sec. 1301.136. AVAILABILITY OF CODING GUIDELINES. (a) A
contract between an insurer and a preferred provider must provide
that:
(1) the preferred provider may request a description and copy of
the coding guidelines, including any underlying bundling,
recoding, or other payment process and fee schedules applicable
to specific procedures that the preferred provider will receive
under the contract;
(2) the insurer or the insurer's agent will provide the coding
guidelines and fee schedules not later than the 30th day after
the date the insurer receives the request;
(3) the insurer or the insurer's agent will provide notice of
changes to the coding guidelines and fee schedules that will
result in a change of payment to the preferred provider not later
than the 90th day before the date the changes take effect and
will not make retroactive revisions to the coding guidelines and
fee schedules; and
(4) the contract may be terminated by the preferred provider on
or before the 30th day after the date the preferred provider
receives information requested under this subsection without
penalty or discrimination in participation in other health care
products or plans.
(b) A preferred provider who receives information under
Subsection (a) may only:
(1) use or disclose the information for the purpose of practice
management, billing activities, and other business operations;
and
(2) disclose the information to a governmental agency involved
in the regulation of health care or insurance.
(c) The insurer shall, on request of the preferred provider,
provide the name, edition, and model version of the software that
the insurer uses to determine bundling and unbundling of claims.
(d) The provisions of this section may not be waived, voided, or
nullified by contract.
Added by Acts 2005, 79th Leg., Ch.
728, Sec. 11.037(b), eff. September 1, 2005.
Sec. 1301.137. VIOLATION OF CLAIMS PAYMENT REQUIREMENTS;
PENALTY. (a) Except as provided by this section, if a clean
claim submitted to an insurer is payable and the insurer does not
determine under Subchapter C that the claim is payable and pay
the claim on or before the date the insurer is required to make a
determination or adjudication of the claim, the insurer shall pay
the preferred provider making the claim the contracted rate owed
on the claim plus a penalty in the amount of the lesser of:
(1) 50 percent of the difference between the billed charges, as
submitted on the claim, and the contracted rate; or
(2) $100,000.
(b) If the claim is paid on or after the 46th day and before the
91st day after the date the insurer is required to make a
determination or adjudication of the claim, the insurer shall pay
a penalty in the amount of the lesser of:
(1) 100 percent of the difference between the billed charges, as
submitted on the claim, and the contracted rate; or
(2) $200,000.
(c) If the claim is paid on or after the 91st day after the date
the insurer is required to make a determination or adjudication
of the claim, the insurer shall pay a penalty computed under
Subsection (b) plus 18 percent annual interest on that amount.
Interest under this subsection accrues beginning on the date the
insurer was required to pay the claim and ending on the date the
claim and the penalty are paid in full.
(d) Except as provided by this section, an insurer that
determines under Subchapter C that a claim is payable, pays only
a portion of the amount of the claim on or before the date the
insurer is required to make a determination or adjudication of
the claim, and pays the balance of the contracted rate owed for
the claim after that date shall pay to the preferred provider, in
addition to the contracted amount owed, a penalty on the amount
not timely paid in the amount of the lesser of:
(1) 50 percent of the underpaid amount; or
(2) $100,000.
(e) If the balance of the claim is paid on or after the 46th day
and before the 91st day after the date the insurer is required to
make a determination or adjudication of the claim, the insurer
shall pay a penalty on the balance of the claim in the amount of
the lesser of:
(1) 100 percent of the underpaid amount; or
(2) $200,000.
(f) If the balance of the claim is paid on or after the 91st day
after the date the insurer is required to make a determination or
adjudication of the claim, the insurer shall pay a penalty on the
balance of the claim computed under Subsection (e) plus 18
percent annual interest on that amount. Interest under this
subsection accrues beginning on the date the insurer was required
to pay the claim and ending on the date the claim and the penalty
are paid in full.
(g) For the purposes of Subsections (d) and (e), the underpaid
amou