S.B. No. 507

	AN ACT
	relating to mediation of the settlement of certain out-of-network
	health benefit claims involving balance billing.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
	SECTION 1.  Section 1467.001, Insurance Code, is amended by
	amending Subdivisions (1), (3), (4), (5), and (7) and adding
	Subdivisions (2-a), (2-b), (3-a), and (4-a) to read as follows:
	(1)  "Administrator" means:
	(A)  an administering firm for a health benefit
	plan providing coverage under Chapter 1551, 1575, or 1579; and
	(B)  if applicable, the claims administrator for
	the health benefit plan.
	(2-a)  "Emergency care" has the meaning assigned by
	Section 1301.155.
	(2-b)  "Emergency care provider" means a physician,
	health care practitioner, facility, or other health care provider
	who provides and bills an enrollee, administrator, or health
	benefit plan for emergency care.
	(3)  "Enrollee" means an individual who is eligible to
	receive benefits through a preferred provider benefit plan or a
	health benefit plan under Chapter 1551, 1575, or 1579.
	(3-a)  "Facility" has the meaning assigned by Section
	324.001, Health and Safety Code.
	(4)  "Facility-based provider [physician]" means a
	physician, health care practitioner, or other health care provider
	[radiologist, an anesthesiologist, a pathologist, an emergency
	department physician, a neonatologist, or an assistant surgeon:
	[(A)     to whom the facility has granted clinical
	privileges; and
	[(B)]  who provides health care or medical
	services to patients of a [the] facility [under those clinical
	privileges].
	(4-a)  "Health care practitioner" means an individual
	who is licensed to provide health care services.
	(5)  "Mediation" means a process in which an impartial
	mediator facilitates and promotes agreement between the insurer
	offering a preferred provider benefit plan or the administrator and
	a facility-based provider or emergency care provider [physician] or
	the provider's [physician's] representative to settle a health
	benefit claim of an enrollee.
	(7)  "Party" means an insurer offering a preferred
	provider benefit plan, an administrator, or a facility-based
	provider or emergency care provider [physician] or the provider's
	[physician's] representative who participates in a mediation
	conducted under this chapter.  The enrollee is also considered a
	party to the mediation.
	SECTION 2.  Section 1467.002, Insurance Code, is amended to
	read as follows:
	Sec. 1467.002.  APPLICABILITY OF CHAPTER. This chapter
	applies to:
	(1)  a preferred provider benefit plan offered by an
	insurer under Chapter 1301; and
	(2)  an administrator of a health benefit plan, other
	than a health maintenance organization plan, under Chapter 1551,
	1575, or 1579.
	SECTION 3.  Section 1467.003, Insurance Code, is amended to
	read as follows:
	Sec. 1467.003.  RULES. The commissioner, the Texas Medical
	Board, any other appropriate regulatory agency, and the chief
	administrative law judge shall adopt rules as necessary to
	implement their respective powers and duties under this chapter.
	SECTION 4.  Section 1467.005, Insurance Code, is amended to
	read as follows:
	Sec. 1467.005.  REFORM. This chapter may not be construed to
	prohibit:
	(1)  an insurer offering a preferred provider benefit
	plan or administrator from, at any time, offering a reformed claim
	settlement; or
	(2)  a facility-based provider or emergency care
	provider [physician] from, at any time, offering a reformed charge
	for health care or medical services or supplies.
	SECTION 5.  Section 1467.051, Insurance Code, is amended to
	read as follows:
	Sec. 1467.051.  AVAILABILITY OF MANDATORY MEDIATION;
	EXCEPTION.  (a)  An enrollee may request mediation of a settlement
	of an out-of-network health benefit claim if:
	(1)  the amount for which the enrollee is responsible
	to a facility-based provider or emergency care provider
	[physician], after copayments, deductibles, and coinsurance,
	including the amount unpaid by the administrator or insurer, is
	greater than $500; and
	(2)  the health benefit claim is for:
	(A)  emergency care; or
	(B)  a health care or medical service or supply
	provided by a facility-based provider [physician] in a facility
	[hospital] that is a preferred provider or that has a contract with
	the administrator.
	(b)  Except as provided by Subsections (c) and (d), if an
	enrollee requests mediation under this subchapter, the
	facility-based provider or emergency care provider, [physician] or
	the provider's [physician's] representative, and the insurer or the
	administrator, as appropriate, shall participate in the mediation.
	(c)  Except in the case of an emergency and if requested by
	the enrollee, a facility-based provider [physician] shall, before
	providing a health care or medical service or supply, provide a
	complete disclosure to an enrollee that:
	(1)  explains that the facility-based provider
	[physician] does not have a contract with the enrollee's health
	benefit plan;
	(2)  discloses projected amounts for which the enrollee
	may be responsible; and
	(3)  discloses the circumstances under which the
	enrollee would be responsible for those amounts.
	(d)  A facility-based provider [physician] who makes a
	disclosure under Subsection (c) and obtains the enrollee's written
	acknowledgment of that disclosure may not be required to mediate a
	billed charge under this subchapter if the amount billed is less
	than or equal to the maximum amount projected in the disclosure.
	SECTION 6.  Subchapter B, Chapter 1467, Insurance Code, is
	amended by adding Section 1467.0511 to read as follows:
	Sec. 1467.0511.  NOTICE AND INFORMATION PROVIDED TO
	ENROLLEE.  (a)  A bill sent to an enrollee by a facility-based
	provider or emergency care provider or an explanation of benefits
	sent to an enrollee by an insurer or administrator for an
	out-of-network health benefit claim eligible for mediation under
	this chapter must contain, in not less than 10-point boldface type,
	a conspicuous, plain-language explanation of the mediation process
	available under this chapter, including information on how to
	request mediation and a statement that is substantially similar to
	the following:
	"You may be able to reduce some of your out-of-pocket costs
	for an out-of-network medical or health care claim that is eligible
	for mediation by contacting the Texas Department of Insurance at
	(website) and (phone number)."
	(b)  If an enrollee contacts an insurer, administrator,
	facility-based provider, or emergency care provider about a bill
	that may be eligible for mediation under this chapter, the insurer,
	administrator, facility-based provider, or emergency care provider
	is encouraged to:
	(1)  inform the enrollee about mediation under this
	chapter; and
	(2)  provide the enrollee with the department's
	toll-free telephone number and Internet website address.
	SECTION 7.  Section 1467.052(c), Insurance Code, is amended
	to read as follows:
	(c)  A person may not act as mediator for a claim settlement
	dispute if the person has been employed by, consulted for, or
	otherwise had a business relationship with an insurer offering the
	preferred provider benefit plan or a physician, health care
	practitioner, or other health care provider during the three years
	immediately preceding the request for mediation.
	SECTION 8.  Section 1467.053(d), Insurance Code, is amended
	to read as follows:
	(d)  The mediator's fees shall be split evenly and paid by
	the insurer or administrator and the facility-based provider or
	emergency care provider [physician].
	SECTION 9.  Sections 1467.054(b), (c), and (e), Insurance
	Code, are amended to read as follows:
	(b)  A request for mandatory mediation must be provided to
	the department on a form prescribed by the commissioner and must
	include:
	(1)  the name of the enrollee requesting mediation;
	(2)  a brief description of the claim to be mediated;
	(3)  contact information, including a telephone
	number, for the requesting enrollee and the enrollee's counsel, if
	the enrollee retains counsel;
	(4)  the name of the facility-based provider or
	emergency care provider [physician] and name of the insurer or
	administrator; and
	(5)  any other information the commissioner may require
	by rule.
	(c)  On receipt of a request for mediation, the department
	shall notify the facility-based provider or emergency care provider
	[physician] and insurer or administrator of the request.
	(e)  A dispute to be mediated under this chapter that does
	not settle as a result of a teleconference conducted under
	Subsection (d) must be conducted in the county in which the health
	care or medical services were rendered.
	SECTION 10.  Sections 1467.055(d), (h), and (i), Insurance
	Code, are amended to read as follows:
	(d)  If the enrollee is participating in the mediation in
	person, at the beginning of the mediation the mediator shall inform
	the enrollee that if the enrollee is not satisfied with the mediated
	agreement, the enrollee may file a complaint with:
	(1)  the Texas Medical Board or other appropriate
	regulatory agency against the facility-based provider or emergency
	care provider [physician] for improper billing; and
	(2)  the department for unfair claim settlement
	practices.
	(h)  On receipt of notice from the department that an
	enrollee has made a request for mediation that meets the
	requirements of this chapter, the facility-based provider or
	emergency care provider [physician] may not pursue any collection
	effort against the enrollee who has requested mediation for amounts
	other than copayments, deductibles, and coinsurance before the
	earlier of:
	(1)  the date the mediation is completed; or
	(2)  the date the request to mediate is withdrawn.
	(i)  A health care or medical service or supply provided by a
	facility-based provider or emergency care provider [physician] may
	not be summarily disallowed.  This subsection does not require an
	insurer or administrator to pay for an uncovered service or supply.
	SECTION 11.  Sections 1467.056(a), (b), and (d), Insurance
	Code, are amended to read as follows:
	(a)  In a mediation under this chapter, the parties shall:
	(1)  evaluate whether:
	(A)  the amount charged by the facility-based
	provider or emergency care provider [physician] for the health care
	or medical service or supply is excessive; and
	(B)  the amount paid by the insurer or
	administrator represents the usual and customary rate for the
	health care or medical service or supply or is unreasonably low; and
	(2)  as a result of the amounts described by
	Subdivision (1), determine the amount, after copayments,
	deductibles, and coinsurance are applied, for which an enrollee is
	responsible to the facility-based provider or emergency care
	provider [physician].
	(b)  The facility-based provider or emergency care provider
	[physician] may present information regarding the amount charged
	for the health care or medical service or supply.  The insurer or
	administrator may present information regarding the amount paid by
	the insurer or administrator.
	(d)  The goal of the mediation is to reach an agreement among
	the enrollee, the facility-based provider or emergency care
	provider [physician], and the insurer or administrator, as
	applicable, as to the amount paid by the insurer or administrator to
	the facility-based provider or emergency care provider
	[physician], the amount charged by the facility-based provider or
	emergency care provider [physician], and the amount paid to the
	facility-based provider or emergency care provider [physician] by
	the enrollee.
	SECTION 12.  Section 1467.057(a), Insurance Code, is amended
	to read as follows:
	(a)  The mediator of an unsuccessful mediation under this
	chapter shall report the outcome of the mediation to the
	department, the Texas Medical Board or other appropriate regulatory
	agency, and the chief administrative law judge.
	SECTION 13.  Section 1467.058, Insurance Code, is amended to
	read as follows:
	Sec. 1467.058.  CONTINUATION OF MEDIATION. After a referral
	is made under Section 1467.057, the facility-based provider or
	emergency care provider [physician] and the insurer or
	administrator may elect to continue the mediation to further
	determine their responsibilities.  Continuation of mediation under
	this section does not affect the amount of the billed charge to the
	enrollee.
	SECTION 14.  Section 1467.059, Insurance Code, is amended to
	read as follows:
	Sec. 1467.059.  MEDIATION AGREEMENT. The mediator shall
	prepare a confidential mediation agreement and order that states:
	(1)  the total amount for which the enrollee will be
	responsible to the facility-based provider or emergency care
	provider [physician], after copayments, deductibles, and
	coinsurance; and
	(2)  any agreement reached by the parties under Section
	1467.058.
	SECTION 15.  Section 1467.060, Insurance Code, is amended to
	read as follows:
	Sec. 1467.060.  REPORT OF MEDIATOR. The mediator shall
	report to the commissioner and the Texas Medical Board or other
	appropriate regulatory agency:
	(1)  the names of the parties to the mediation; and
	(2)  whether the parties reached an agreement or the
	mediator made a referral under Section 1467.057.
	SECTION 16.  Section 1467.151, Insurance Code, is amended to
	read as follows:
	Sec. 1467.151.  CONSUMER PROTECTION; RULES.  (a)  The
	commissioner and the Texas Medical Board or other regulatory
	agency, as appropriate, shall adopt rules regulating the
	investigation and review of a complaint filed that relates to the
	settlement of an out-of-network health benefit claim that is
	subject to this chapter.  The rules adopted under this section must:
	(1)  distinguish among complaints for out-of-network
	coverage or payment and give priority to investigating allegations
	of delayed health care or medical care;
	(2)  develop a form for filing a complaint and
	establish an outreach effort to inform enrollees of the
	availability of the claims dispute resolution process under this
	chapter;
	(3)  ensure that a complaint is not dismissed without
	appropriate consideration;
	(4)  ensure that enrollees are informed of the
	availability of mandatory mediation; and
	(5)  require the administrator to include a notice of
	the claims dispute resolution process available under this chapter
	with the explanation of benefits sent to an enrollee.
	(b)  The department and the Texas Medical Board or other
	appropriate regulatory agency shall maintain information:
	(1)  on each complaint filed that concerns a claim or
	mediation subject to this chapter; and
	(2)  related to a claim that is the basis of an enrollee
	complaint, including:
	(A)  the type of services that gave rise to the
	dispute;
	(B)  the type and specialty, if any, of the
	facility-based provider or emergency care provider [physician] who
	provided the out-of-network service;
	(C)  the county and metropolitan area in which the
	health care or medical service or supply was provided;
	(D)  whether the health care or medical service or
	supply was for emergency care; and
	(E)  any other information about:
	(i)  the insurer or administrator that the
	commissioner by rule requires; or
	(ii)  the facility-based provider or
	emergency care provider [physician] that the Texas Medical Board or
	other appropriate regulatory agency by rule requires.
	(c)  The information collected and maintained by the
	department and the Texas Medical Board and other appropriate
	regulatory agencies under Subsection (b)(2) is public information
	as defined by Section 552.002, Government Code, and may not include
	personally identifiable information or health care or medical
	information.
	(d)  A facility-based provider or emergency care provider
	[physician] who fails to provide a disclosure under Section
	1467.051 or 1467.0511 is not subject to discipline by the Texas
	Medical Board or other appropriate regulatory agency for that
	failure and a cause of action is not created by a failure to
	disclose as required by Section 1467.051 or 1467.0511.
	SECTION 17.  Section 1467.101(c), Insurance Code, is
	repealed.
	SECTION 18.  The changes in law made by this Act apply only
	to a claim for health care or medical services or supplies provided
	on or after January 1, 2018. A claim for health care or medical
	services or supplies provided before January 1, 2018, is governed
	by the law in effect immediately before the effective date of this
	Act, and that law is continued in effect for that purpose.
	SECTION 19.  This Act takes effect September 1, 2017.
	______________________________	______________________________
	President of the Senate	Speaker of the House
	I hereby certify that S.B. No. 507 passed the Senate on
	March 28, 2017, by the following vote: Yeas 29, Nays 2; and that
	the Senate concurred in House amendment on May 11, 2017, by the
	following vote: Yeas 29, Nays 2.
	______________________________
	Secretary of the Senate
	I hereby certify that S.B. No. 507 passed the House, with
	amendment, on May 4, 2017, by the following vote: Yeas 133,
	Nays 12, two present not voting.
	______________________________
	Chief Clerk of the House
	Approved:
	______________________________
	Date
	______________________________
	Governor