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AN ACT
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relating to liability for and calculation of underpayment penalties |
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under certain provisions regarding prompt payment of physicians and |
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providers under certain managed care plans. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Subsections (g) and (h), Section 843.342, |
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Insurance Code, are amended to read as follows: |
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(g) For the purposes of Subsections (d) and (e), the |
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underpaid amount is calculated on the ratio of the amount underpaid |
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on the contracted rate to the contracted rate as applied to an |
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amount equal to the billed charges as submitted on the claim minus |
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the contracted rate. |
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(h) A health maintenance organization is not liable for a |
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penalty under this section: |
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(1) if the failure to pay the claim in accordance with |
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this subchapter is a result of a catastrophic event that |
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substantially interferes with the normal business operations of the |
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health maintenance organization; or |
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(2) if the claim was paid in accordance with this |
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subchapter, but for less than the contracted rate, and: |
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(A) the physician or provider notifies the health |
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maintenance organization of the underpayment after the 270th |
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[180th] day after the date the underpayment was received; and |
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(B) the health maintenance organization pays the |
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balance of the claim on or before the 30th [45th] day after the date |
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the health maintenance organization receives the notice. |
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SECTION 2. Subsections (g) and (h), Section 1301.137, |
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Insurance Code, are amended to read as follows: |
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(g) For the purposes of Subsections (d) and (e), the |
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underpaid amount is computed on the ratio of the amount underpaid on |
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the contracted rate to the contracted rate as applied to an amount |
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equal to the billed charges as submitted on the claim minus the |
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contracted rate. |
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(h) An insurer is not liable for a penalty under this |
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section: |
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(1) if the failure to pay the claim in accordance with |
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Subchapter C is a result of a catastrophic event that substantially |
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interferes with the normal business operations of the insurer; or |
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(2) if the claim was paid in accordance with |
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Subchapter C, but for less than the contracted rate, and: |
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(A) the preferred provider notifies the insurer |
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of the underpayment after the 270th [180th] day after the date the |
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underpayment was received; and |
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(B) the insurer pays the balance of the claim on |
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or before the 30th [45th] day after the date the insurer receives |
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the notice. |
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SECTION 3. The change in law made by this Act applies to |
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payment of a claim submitted to a health maintenance organization |
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or insurer on or after the effective date of this Act. A claim |
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submitted before the effective date of this Act is governed by the |
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law in effect immediately before the effective date of this Act, and |
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that law is continued in effect for that purpose. |
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SECTION 4. This Act takes effect September 1, 2007. |
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______________________________ |
______________________________ |
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President of the Senate |
Speaker of the House |
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I hereby certify that S.B. No. 1884 passed the Senate on |
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May 8, 2007, by the following vote: Yeas 31, Nays 0. |
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______________________________ |
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Secretary of the Senate |
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I hereby certify that S.B. No. 1884 passed the House on |
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May 17, 2007, by the following vote: Yeas 143, Nays 0, two |
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present not voting. |
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______________________________ |
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Chief Clerk of the House |
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Approved: |
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______________________________ |
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Date |
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______________________________ |
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Governor |