Source: http://www.tdi.texas.gov/rules/2003/0915d-059.html
Timestamp: 2018-06-21 08:48:44
Document Index: 286884105

Matched Legal Cases: ['§19', '§ 19', '§ 19', 'Art. 3', '§ 19', '§ 19', '§ 19', '§ 19', '§ 19', '§ 19', '§ 19', '§ 19', '§ 19', '§ 21', '§ 19', '§ 19', '§ 19', '§ 19', '§ 19', '§ 19', '§ 19', '§ 19', '§ 19', '§ 19', '§ 19', '§ 19', '§ 19', '§ 19', '§ 19', '§ 19', '§ 19', '§ 19', '§ 19', '§ 19', 'Art. 21', '§ 19', '§ 19', '§ 19', '§ 19', '§ 19', '§ 19', '§ 19', '§ 19', '§ 3', '§ 19', 'Art. 3', 'Art. 3', '§ 19', '§ 19', '§ 19', '§ 19', '§ 19', '§ 19', '§ 19', '§ 19', '§ 19', '§ 19', '§ 19', '§ 19', '§ 19', '§ 19', '§ 19', '§ 19', '§ 21', '§ 19', '§ 19', '§ 19', '§ 19', '§ 19', '§ 19', '§ 19', '§ 19', '§ 19', '§ 19', '§ 19', '§ 21', '§ 19', '§ 19', '§ 19', '§ 843', '§ 19', '§ 1', '§ 1', '§ 843', '§ 843', '§ 19', '§ 19', '§ 19', '§ 19', '§ 19', '§ 19', '§ 19', '§ 19', '§ 21', '§ 19', '§ 19']

Subchapter R. Utilization Review Agents.
28 TAC § §19.1703, 19.1723, and 19.1724.
The Commissioner of Insurance adopts amendments to § 19.1703 and new § § 19.1723 and 19.1724 concerning procedures by which physicians and providers that contract with an insurer or health maintenance organization (referred to as "preferred providers" in the rule text) may request, and insurers that issue preferred provider benefit plans and health maintenance organizations (hereinafter collectively "carriers") may provide, preauthorization and verification of medical care or health care services. These amendments also concern procedures by which certain non-contracted providers may request and carriers may provide verification of medical care or health care services. These sections are adopted with changes to the proposed text as published in the July 4, 2003 issue of the Texas Register (28 TexReg 5091).
The amended and new sections are the result of the enactment of Senate Bill (SB) 418 during the 78 th Regular Legislative Session. That legislation, among other things, amended Texas Insurance Code Art. 3.70-3C, concerning preferred provider benefit plans, and the Texas Health Maintenance Organization (HMO) Act, Texas Insurance Code Chapter 843, to provide comprehensive changes to the procedures and requirements governing the processing and payment of clean claims submitted by certain physicians and providers. While SB 418 and the rule apply to preferred providers of insurers that issue preferred provider benefit plans, physicians and providers contracted with HMOs, and certain other physicians and providers in certain circumstances, this order will use the terms "preferred provider," "physician" and "provider" to refer to the entities to whom the rule applies. Other provisions of SB 418 are addressed in adopted rules published elsewhere in this issue of the Texas Register .
Pursuant to SB 418, several provisions of the law became applicable to contracts between carriers and physicians and providers that were entered into or renewed, or certain services that were provided, on and after the 60 th day after the effective date of the statute, rendering those provisions effective on August 16, 2003 . The commissioner adopted rules on an emergency basis, effective August 16, 2003 , which were published in the August 29, 2003 issue of the Texas Register (28 TexReg 7024). The emergency rules will be withdrawn at the time these adopted rules become effective.
These sections are necessary to implement certain provisions of SB 418, which made comprehensive changes to the procedures and requirements governing the processing and payment of clean claims submitted by physicians and providers. Among other things, SB 418 added the concepts of preauthorization, where the medical necessity and appropriateness of services is determined, and verification, which is a reliable representation by a carrier that it will pay a physician or provider for proposed medical services, if those services are rendered to the patient for whom the services are proposed. These sections as adopted set forth the procedures by which a physician or provider may request, and a carrier may consider and affirmatively act upon or decline, a preauthorization or verification of proposed services.
In developing these rules the department has had extensive discussions and consultations with the Clean Claims Working Group (CCWG), a group originally established by the department in 2001 and comprised of representatives of carriers, physicians, providers, and trade associations, and open in attendance to all other interested persons. As part of its continuing consultations with the CCWG, the department held three meetings with the group in May and June of 2003 to discuss implementation of the new statute. In addition, SB 418 required the commissioner to appoint a Technical Advisory Committee on Claims Processing (TACCP) to, among other things, advise the commissioner on technical aspects of coding of health care services and claims development, submission, processing, adjudication, and payment. The statute also requires the commissioner to consult with the TACCP prior to adopting any rules. The majority of the members of the CCWG have been appointed to the TACCP, which held meetings on June 18 and September 9, 2003 at which these rules were discussed.
The commissioner held a public hearing on the proposed sections on August 7, 2003 (Docket No. 2555).
Changes have been made to the proposed sections as published, based upon comments received by the department, as follows: (1) The definition of "declination" was changed from a response where a carrier "declines to guarantee payment"to a response where a carrier "does not issue a verification."The department agrees with commenters that the latter is more consistent with the statutory language. It also believes that the amended definition will help prevent misunderstandings on the part of physicians and providers and their patients if a service is not verified; under those circumstances a declination should not hinder the provision of medical care, as the carrier must still timely pay clean claims for all covered benefits. (2) § 19.1723(d)(1), (2) and (3) were changed to clarify that the time for preauthorization may include, if applicable, three days, 24 hours and one hour, respectively, from the beginning of the next time period requiring the availability of appropriate personnel as required by § 19.1723(e). (3) A new subsection (a) was added to § 19.1724 making clear that this section applies to HMOs, preferred provider carriers, preferred providers, and physicians or health care providers that provide emergency or specialty or other care at the request of the carrier or a preferred provider because those services are not reasonably available within the carrier´s network. Consistent with this change, proposed § 19.1724(j) was deleted as unnecessary. (4) Proposed § 19.1724(a), now redesignated as section (b), was amended to make clear that the other means by which a carrier may receive a request for verification includes the Internet, so long as any agreement between the parties does not limit a preferred provider´s option to request verification by telephone. (5) The number of items of information required of a physician or provider who requests a verification was changed in § 19.1724 from 18 to 13, and some of the items were made continge nt upon inclusion of the information on an identification card issued by a carrier. (6) The time limit in § 19.1724 for requesting additional information from a provider who has requested a verification was reduced from three days, to one day, from receipt of the request, and the requirement that such request be in writing was eliminated. (7) The time limits for providing verifications or declinations was changed in § 19.1724, as follows: for post-stabilization care and life-threatening conditions, without delay and not later than one hour from receipt of request (rather than without delay, but not later than 72 hours); for concurrent hospitalizations, without delay and not later than 24 hours from receipt of request (instead of without delay, but not later than 72 hours); and for all other requests, without delay and as appropriate to the circumstances for the particular request, but not later than five days after date of receipt (rather than without delay but not later than 15 days). (8) The information in § 19.1724 required to be contained in a written response to a request for verification was changed to also include a unique verification number that allows the carrier to match the verification and subsequent claims related to the proposed service; this is consistent with adopted § 21.2803(b)(1)(Y) and (b)(2)(LL), which requires a verification number as an element of a clean claim. (9) § 19.1724(c) was changed to clarify the time in which a carrier must acknowledge (as opposed to respond to) requests for verification following receipt of after-hours telephone messages, and § 19.1724(h) was amended to reference the acknowledgement required by subsection (c). (10) § 19.1724(i) was added to provide that if a request for verification involves services for which preauthorization is required, the carrier shall follow the procedures contained in § 19.1723; § 19.1724(h)(9), redesignated as (j)(9), was deleted consistent with this change. (11) § 19.1724(h), redesignate d as (j), was amended t o allow a verification to be delivered by other means, including the Internet, as agreed to by the carrier and the provider. In addition to the foregoing changes, the adopted rule contains other changes made for purposes of consistency and clarity and to correct typographical errors.
By far the greatest share of comments on the proposed rule concerned the timeframe within which a carrier must determine whether to verify or decline to verify a request for medical or health care services, and the amount of information a physician or provider must provide in order for a carrier to make its determination, largely because the SB 418 verification requirements are new to the carrier and provider communities. Both these issues also were debated extensively within the CCWG and the TACCP. In analyzing the comments, the department was faced with balancing competing interests, yet remaining consistent with the statute´s requirements. On the one hand, physicians and providers, noting that the statute required verification "without delay," urged a faster, more streamlined process by which verifications would be received and acted upon. On the other hand, carriers, noting that verification was essentially the adjudication of a claim prior to services being rendered, argued for sufficient time and information by which to make this binding determination. The department believes that both sides have presented compelling arguments. It also believes that the interests of affected patients require consideration.
After considering all comments, the department has adopted changes to the verification process which, it believes, most equitably address all the above factors. First, the rule reduces to 13 the number of items of information required for a verification request and makes certain items conditionally required, if they are already included on an identification card issued by the carrier. It requires only those items which the department believes will most effectively allow a carrier to identify the individual for whom the service is proposed to be provided; subscriber and provider information; and information concerning the proposed procedures and services. The department believes these items represent information that is available to the provider or accessible through the patient, and which should, in turn, be sufficient to enable the carrier to perform all necessary analysis to determine whether the services should be verified.
The adopted rule´s timeframes for verification involved a similar balancing of interests. This was necessary because the statute, while requiring that verification occur "without delay," made such determination binding upon carriers except in certain limited circumstances. After considering all concerns, the department believes the most reasonable approach to verification times is situational. Accordingly, the timeframes for response to requests for verification were reduced to maximums of one hour for post-stabilization care or life-threatening conditions, 24 hours for concurrent hospitalizations, and five days for all other requests. Each category makes clear that the carrier must respond without delay, but no later than within the time provided, and § 19.1724(h)(1) makes clear that the five-day maximum time limit is subject to the amount of time appropriate to the circumstances of the particular request. By adding this language, the department fully expects that carriers will respond to requests as quickly as the situation merits. However, it also understands that there may be some situations which compel use of the maximum amounts of time provided by the rules.
Adopted § 19.1703 adds new definitions for the terms declination, preauthorization, preferred provider, and verification. Adopted § 19.1723 requires that a carrier that uses a preauthorization process shall provide to each contracted preferred provider, not later than the 10 th business day after a request is made, a list that allows the preferred provider to determine those medical care and health care services that require preauthorization, along with information concerning the preauthorization process. If the proposed services involve inpatient care, a carrier that approves a request must issue a length of stay for admission into a health care facility based on the recommendation of the preferred provider and the carrier´s written medically accepted screening criteria and review procedures. Adopted § 19.1723 also sets forth timeframes in which a carrier must respond to preauthorization requests for those services requiring preauthorization: concurrent hospitalization, within 24 hours of receipt of request; services involving post-stabilization treatment or life-threatening condition, within the time appropriate to the circumstances and the condition of the patient, but in no case to exceed one hour of receipt. However, if a request is received during hours for which there is no availability of appropriate personnel to receive the request, the timeframes do not start until the next period requiring the personnel at the toll-free telephone number.
Adopted § 19.1723 provides that a carrier that issues an adverse determination in response to a post-stabilization or life-threatening condition treatment must provide the independent review organization notification required by § 19.1721(c). A carrier that issues any other adverse determination must comply with current § 19.1710 concerning notice of determinations by utilization review agents. A carrier must also have appropriate personnel reasonably available at a toll-free telephone number to provide the preauthorization determination during the hours and days prescribed in this adopted rule. The carrier must also be able to receive and record calls at other times than the hours specified in the adopted rule, and acknowledge those calls within 24 hours after receipt. The carrier must provide a written determination within three calendar days of receipt.
Adopted § 19.1723 states that a carrier that has preauthorized care or services may not deny or reduce payment for those services, based on medical necessity or appropriateness of care, unless the physician or provider has materially misrepresented or failed to perform the services. The adopted section states that it applies to an agent or other person with whom a carrier contracts, and provides that the provisions of the sections may not be waived, voided, or nullified by contract.
Adopted § 19.1724 requires carriers to be able to receive requests for verification by telephone, in writing, and by other means, including the Internet, as agreed to by the preferred provider and the carrier, so long as the agreement does not limit the preferred provider´s option to request verification by telephone call. It requires carriers to have appropriate personnel reasonably available at a toll-free telephone number to accept telephone requests and to provide determinations of previously requested verifications at the days and hours prescribed in the rule, and to receive and record calls at all other times and acknowledge those calls not later than the times prescribed in the rule. The terms "acknowledge" and "acknowledgement" have been used to describe an action that is separate from a response to a request. The adopted section also clarifies that if a request involves services for which preauthorization is required, the carrier must follow the procedures of 19.1723 and respond in compliance with that section.
Section 19.1724 as adopted contains a list of 13 items of information that must be contained in a request for verification. Some of these items are conditionally required, such as information concerning any other carrier, if known by the provider, and certain information that is included on an identification card issued by the carrier.
Adopted § 19.1724 provides that, if necessary to verify proposed medical care or health care services, a carrier may, within one day of receipt of the request for verification, request information from the preferred provider in addition to the information contained in the request for verification. A carrier may make only one such request, and the request must be specific to the verification request, describe with specificity the clinical and other information sought, be relevant and necessary for resolution of the request, and be for information contained in or in the process of being incorporated into the enrollee´s medical or billing record. The request does not have to be written.
Adopted § 19.1724 contains the following timeframes by which carriers must respond to a request for verification: for post-stabilization care or life-threatening conditions, without delay but not later than one hour after receipt; for concurrent hospitalizations, without delay but not later than 24 hours after the request is received; and for all other requests, without delay, and as appropriate to the circumstances of the request, but not later than five days after receipt of the request. However, if a request is received during hours for which there is no availability of appropriate personnel to receive the request, the timeframes do not start until the next period requiring the personnel at the toll-free telephone number. Verification or declination may be delivered by the carrier via telephone or in writing, but if it is delivered by telephone the carrier must, within three days of providing a verbal response, provide a written response that includes the minimum information contained in the rule, including a statement that the proposed services are being verified or declined pursuant to this rule.
Adopted § 19.1724 specifies the entities­carriers, physicians and providers­to whom this section applies. It also states that the section´s provisions may not be waived, voided, or nullified by contract.
§ 19.1703--General
Comment: Several commenters state that the verification provisions do not belong in the utilization review (UR) rules, since verification includes representations other than medical necessity that will not be performed by a UR agent.
Agency Response: Because services that are not medically necessary are typically excluded from coverage under health plans, a determination of medical necessity will therefore often be a necessary function in the verification process. HMOs and PPOs who have personnel who perform medical necessity reviews are subject to the utilization review rules, and therefore would look to these rules to find the requirements for the verification process. Conversely, other persons on behalf of the carrier may perform other functions that are part of the verification process. Placement of the verification process in Chapter 19 of the Texas Administrative Code does not necessarily require that all personnel rendering the verification decision be subject to UR agent licensing requirements. If the carriers use UR agents to perform the medical necessity review that is part of the verification process, those agents will also look to this section for the applicable requirements. The department declines to change the placement of this rule.
Comment: A commenter asks for clarification that a verification or preauthorization is specific to the physician or provider who requested it, and that no other physician or provider can benefit from the obligations that arise for a health plan because of the verification or preauthorization process.
Agency Response: The department agrees that only the physician and provider who requested and received a verification or preauthorization can rely on that representation by the carrier. Performance of that service by a different physician or provider may be subject to other provisions of the law and rules concerning prompt pay.
Comment: One commenter says that including verification within the utilization review provisions implies that verification is available as a UR tool to any provider, when the legislative intent is that it only apply to preferred providers.
Agency Response: Section 19.1724(a) clearly states that the verification process is available to preferred providers and non-preferred providers who provide emergency care or who receive referrals for services that are not reasonably available within the network. Other physicians and providers are not eligible for verification.
Comment: A commenter seeks clarification that a health plan´s obligation to respond to requests for verification or preauthorization is dependent upon the physician or provider giving sufficient information.
Agency Response: The department agrees that a carrier´s obligation to respond to these requests is dependent upon receiving sufficient information. A request for verification that requires a carrier´s response need include only those specific elements set forth in § 19.1724(d). A carrier´s preauthorization of a proposed service is dependent upon the carrier´s receipt of information that enables the carrier to make a determination regarding medical necessity. This process is consistent with the requirements of Insurance Code Art. 21.58A, and it is the department´s understanding that this exchange of information between providers and carriers already occurs frequently and efficiently.
Comment: A commenter requests clarification concerning timeframes when a provider requests verification of a service which also requires preauthorization. In that event, must the carrier issue two letters, one within the shorter (preauthorization) timeframe and one within the longer (for verification)?
Agency Response: In response to a request for verification of a medical service for which the HMO or PPO requires preauthorization, the carrier must address both the verification and the preauthorization. The time deadlines under each provision of the rule must be met. A carrier may provide a preauthorization and a verification in the same correspondence, using the requisite language identifying the specific response as required elsewhere in these rules. Should the carrier be unable to answer both the preauthorization and verification request by the earlier deadline for the preauthorization, the carrier would necessarily have to deliver two timely but separate responses ­ one for the preauthorization and one for the verification. The department has changed § 19.1724 for clarification.
§ 19.1703(9)
Comment: One commenter recommends deleting the definition of declination. Other commenters request that the definition more closely track the statutory language and that references to guarantee of payment be deleted. Some commenters suggest that a declination should be defined as a carrier´s refusal or declination to provide a verification or a refusal to provide a determination of eligibility for payment. Some commenters believe that the definition should include the specific reasons that the verification was not provided. Another commenter requests that a declination be accompanied by information indicating that the proposed services are not available to the patient, or documentation that the patient has been or will be terminated from the health plan.
Agency Response: The department has changed the definition to read, in pertinent part, "A response to a request for verification in which an HMO or preferred provider carrier does not issue a verification for proposed medical care or health care services." While the department declines to specify all possible reasons for a declination, another provision of the rule requires that a carrier provide the specific reason for a declination in its response to a request for verification (see adopted § 19.1724(j)(8)). The verification process does not necessarily result in services or coverage being unavailable to the patient if the physician or provider receives a declination. The only effect is that the physician is not guaranteed payment for services prior to the provision of those services. The department fully expects that the physician will still perform the procedure, submit a clean claim, and be paid according to contract, subject to the normal claims processing procedures.
§ 19.1703(19)--Definition of Life-threatening
Comment: A commenter believes that the definition of "life-threatening" is overly broad.
Agency Response: The definition for the term is consistent with the definition of the term in Texas Insurance Code Article 21.58A and other provisions of the Texas Administrative Code.
§ 19.1703(29)--Definition of Preauthorization
Comment: A commenter recommends that the definition of preauthorization include the following language from the definition of verification concerning preauthorization: "the term includes pre-certification, certification, re-certification and any other terms that are a reliable representation by an HMO or preferred provider carrier to a physician or provider if the request for the pre-certification, certification, re-certification or representation includes the requirements of § 19.1724(c) (relating to Verification)."
Agency Response: The department declines to make this change, as it is not consistent with SB 418.
§ 19.1703(37)--Definition of Verification
Comment: One commenter feels that the definition of verification in the rules is a departure from how the term is currently used in the health care industry. The commenter notes that health care providers use this term to refer to the process they use to obtain information concerning eligibility, preauthorization, precertification, benefits, and limitations. The commenter recommends changing verification in the rule to another term such as "formal verification" or "guarantee of payment provisions" to distinguish it from the current process.
Agency Response: SB 418 uses the term "verification" to mean a process that encompasses much more than the concepts of eligibility or preauthorization. Under the statute and the rule, if a carrier verifies services, the carrier must pay for those services if they are provided to that patient during the period that the verification is in effect, absent misrepresentation or failure to substantially perform the proposed services. The department is aware that the industry currently uses the term "verification" to mean a variety of inquiries that are not a guarantee of payment. While many carriers and providers have indicated to the department that they intend to continue using the current process of confirming eligibility, which is permissible under SB 418, use of the term "verification" under those circumstances is not consistent with the provisions of SB 418. Consequently, the department declines to make the requested change. Providers may wish to consider using another term such as "confirmation" to refer to the current process, to differentiate that process from the verification process established by SB 418.
Comment: Several commenters disagree with the department´s definition of verification as a guarantee of payment rather than a reliable representation, as stated in the statute. A commenter opines that the legislature sought to hold carriers accountable only for the eligibility information they gave to providers and to remove carriers´ ability to subsequently deny claims when an affirmative answer was given to a request for eligibility status. Another commenter indicates that carriers would use the "guarantee of payment" language as justification for their failure to provide verifications. One commenter recommends that the definition of verification be deleted. Another commenter says that use of the word "guarantee" seems to imply that insurers would be required to pay a claim that has been verified, regardless of whether the medical service to be provided is covered under the policy contract, which does not appear to be what the legislature intended. A commenter feels that the definition will ultimately give carriers license to deny the claim at a later date.
Agency Response: The definition of verification properly implements the statute by combining the statutory definition of verification with the ultimate effect of a verification. Because a carrier may not deny or reduce a claim for a timely provided service that was verified (absent misrepresentation or failure to perform the proposed services), it is clear that a verification is indeed a guarantee of payment to a physician or provider. The commenter´s reference to eligibility information is a reference to an existing industry practice by which providers contact carriers to determine whether a patient is covered by the carrier´s health plan. Although the lack of reliability of those responses may have been discussed during the legislative process, the statute that resulted from the process contains a verification process that includes much more than eligibility information. The verification process requires a carrier to determine all matters that might affect payment for proposed services. If a carrier issues a verification, the carrier may not deny the claim other than for certain specified reasons. Therefore, the definition of verification includes the term "guarantee of payment."
Comment: A commenter states that the definition of verification does not address the provision in SB 418 that requires insurers to specify copayments, deductibles or coinsurance, and does not specify that verification is for covered services. The commenter suggests the following definition: "A verification is a reliable representation that proposed services will be paid as covered services under the policy or contract with its insured and the insurer shall further specify any applicable deductibles, copayments, or coinsurance for which the insured is responsible under the policy or contract."
Agency Response: While the rule´s definition of verification does not include a requirement that the carrier specify any applicable copayments, deductibles, or coinsurance, a carrier´s response to a verification request must include this information pursuant to § 19.1724(j). Accordingly, the department declines to make the suggested change.
Comment: A commenter recommends that the definition of verification be changed to include the concept that a verification is a guarantee of payment if: the provider submits a clean claim; the provider rendered the services on or before the 30 th day after the date the verification was provided; and the provider has not materially misrepresented the services or substantially failed to perform the services. The commenter also recommends that the definition indicate that verification includes pre-certification, certification or recertification or any other reliable representation by a carrier if the preferred provider plan or HMO agreement makes these a condition of payment. The commenter notes that § 3E of SB 418 states that verification includes preauthorization only when it is a condition for verification. The commenter also requests that the department provide guidance regarding the required factual elements that the department believes will constitute a "reliable representation" or "guarantee" of payment.
Agency Response: The department declines to make the suggested changes because the concepts mentioned by the commenter are addressed in the verification section (§ 19.1724) of the rule. If a carrier verifies services, and those services are provided during the period the verification is valid, the carrier must pay the claim (absent misrepresentation or failure to perform the proposed services). A verification issued pursuant to these rules constitutes a reliable representation and is, in essence, a guarantee of payment.
Comment: A commenter says the definition of verification creates confusion as to application to certain types of providers that are not subject to the preferred provider statute, Art. 3.70-3C. The commenter seeks express language that some providers, such as pharmacists and dentists, are not covered.
Agency Response: The department agrees that dental benefits are not subject to Art. 3.70-3C. Pharmacists, however, may be subject to those statutory requirements if they contract to be part of a preferred provider organization (PPO) network.
Comment: Many commenters note that the definition of verification refers to payment for services provided "within the required timeframe" and observe that this language is not in the statute. The commenters are concerned that this language will give carriers license to deny claims by stating that the services were not rendered in the proper timeframe. They believe the carrier is responsible for determining if the patient is insured at the time of the inquiry.
Agency Response: As set forth in both the statute and the rule, absent misrepresentation or failure to perform, a carrier that issues a verification may not deny or otherwise reduce payment for medical care or health care services if those services are provided before the verification expires, which shall not be less than 30 days. The reference to "timeframe" in the definition of verification is a reference to the timeframe during which the verification is valid. It would be improper for a carrier to deny a claim merely because the services had not been provided within the verification´s timeframe. While that situation would make the verification inapplicable, the carrier must still pay all timely submitted clean claims for covered services.
§ 19.1723--General
Comment: A commenter recommends moving the preauthorization provisions to Chapter 21 with all other clean claim rules.
Agency Response: The department declines to move the rules and believes the preauthorization rules are properly placed in the UR provisions because preauthorization is a medical necessity review process and would be performed either by a UR agent, an HMO, or an insurer that is subject to the UR rules.
Comment: A commenter requests clarification in the rules that a carrier´s review of medical necessity and appropriateness prior to rendering services is not subject to the preauthorization provisions if the review is not a condition of coverage.
Agency Response: The department agrees that preauthorization provisions are not triggered unless the carrier makes preauthorization a condition for payment.
Comment: Some commenters see discrepancies between preauthorization and current utilization review processes and request clarification concerning whether the preauthorization process is in addition to or is a separate process from UR. One commenter suggests that only one standard for medical necessity review be adopted and recommends that the operational standards for preauthorization set forth in § 19.1723(c), (d), and (e) be incorporated into existing utilization review provisions or that the UR provisions be amended to conform to the preauthorization requirements. The commenter also suggested that the department amend Subchapter X, pertaining to preferred provider plans, to include provisions regarding preauthorization and also amend § 19.1719(b) to address insurers performing UR and/or preauthorization.
Agency Response: While the UR and preauthorization processes are very similar, they differ in that the preauthorization process is available only to preferred providers, and a preauthorized service cannot be later denied for payment as not being medically necessary. The UR process currently in § 19.1710 may be utilized by any provider, and carries no guarantee of payment. Other differences include timeframes for approving the request and for issuing an adverse determination. The preauthorization requirements are statutory. Note that the UR requirements in § 19.1710 will apply to non-network providers who are not included as preferred providers under SB 418 and to preferred providers whose contracts have not yet renewed. The department does not believe it is necessary to make the proposed amendments to Subchapter X or to § 19.1719(b), as these carriers are already required by SB 418 to comply with these provisions.
Comment: A commenter requests that the rule recognize that some carriers do not require that services be preauthorized, but rather require notice of certain procedures prior to treatment or services. The commenter requests that the rule clarify that these types of notice requirements are not preauthorization requirements. The commenter also recommends that a carrier that requires only prior notification "be deemed compliant" with the verification provision's assumption that a verified service is also determined to be medically necessary.
Agency Response: The department does not believe a change is necessary. If a carrier responds in writing to a prior notification, it can include a disclaimer that the response does not constitute a determination of medical necessity. If a carrier does not perform a medical necessity review as part of the verification process, however, the carrier must pay for verified services even if a retrospective review of the claim reveals that the verified services were not medically necessary.
Comment: A commenter notes that carriers currently provide information to providers concerning eligibility and the nature and scope of coverages available under the policy, as well as information concerning medical necessity, appropriateness and the efficacy of a proposed treatment. The commenter is concerned that this voluntary sharing of information will be viewed as the provision of a preauthorization or a verification. Some commenters want the rule clarified throughout that the requirements set forth in the rule apply only if the carrier requires preauthorization "as a condition of payment."
Agency Response: The department believes that the rule specifically details the requirements for a verification request and the carrier´s response to the request in such a way that it cannot be confused with any other process. Nothing precludes the continued practice of information sharing concerning eligibility, coverage, or medical necessity, as those practices are distinctly different from the requirements for a verification. However, the rule is clear that if an HMO or preferred provider carrier " requires preauthorization as a condition of payment ," it must comply with the provisions set forth in § 19.1723. The department thus does not believe that any clarification is necessary.
Comment: A commenter seeks clarification as to whether a preauthorization without an accompanying verification results in a guarantee of payment. Another commenter seeks clarification as to whether preauthorization is a stand-alone provision, whether it is incorporated into the verification process, or both.
Agency Response: SB 418 contains separate provisions for preauthorization and verification, and states that verification includes preauthorization only when the preauthorization is a condition for payment. If an insurer provides a verification for proposed medical care or health care services, it may not deny or reduce payment for those services except under certain stated circumstances. However, if a service is preauthorized, rather than verified, the insurer may not deny or reduce payment to the physician or provider for those services based on medical necessity or appropriateness of care , except under certain stated circumstances. Accordingly, an insurer which has preauthorized a service has guaranteed payment only to the extent of a decision based on medical necessity or appropriateness of care, and the claim cannot be reduced or denied for those reasons. However, the insurer may subject the claim to review for other reasons.
§ 19.1723(b)
Comment: A commenter recommends that language be included allowing the carrier to provide the list required by § 19.1723(b) via the web and that the list include the treatment and services for which carriers may require "prior notice," if the carrier requires such notice but does not require preauthorization.
Agency Response: Section 19.1723(b) requires that the carrier furnish a preferred provider upon request with a listing that allows a preferred provider to determine all services that require preauthorization. The carrier may provide this information via a website or any other means so long as the carrier can be sure that every preferred provider with whom it contracts can obtain the information within the specified time frame. The rules do not preclude a carrier from providing its preferred providers with a listing of services that require prior notice via a website or any other method.
Comment: A commenter requests that this subsection be changed to clarify that only a carrier that requires preauthorization must provide the list of services and that the list should be provided within 10 days of a request from a provider.
Agency Response: The department does not believe a change is necessary. The section limits its application to an "HMO or preferred provider carrier that uses a preauthorization process" and states that the carrier shall provide a list of services that will allow a provider to determine which services require preauthorization. The rule further requires that the information be provided not later than the 10th business day after a request is made.
§ 19.1723(d)
Comment: A commenter requests that this section be amended to state three business days, rather than calendar days.
Agency Response: The department declines to make this change as SB 418 states that the determination concerning preauthorization must be issued and transmitted not later than the third calendar day after the date the request is received by the insurer.
§ 19.1723(d)(3)
Comment: A commenter notes that SB 418 specifically sets forth the response periods required for preauthorization and does not appear to authorize the adoption of expedited response deadlines for post-stabilization procedures. The commenter recommends that the rule track the statutory time frames. The commenter also recommends clarifying that these timelines only apply if a carrier requires preauthorization as a condition of payment.
Agency Response: The determination of medical necessity and appropriateness of care is analogous with the function of UR . The utilization review statute requires the shorter timeframe for determinations regarding post-stabilization procedures. The rule seeks to harmonize the SB 418 provisions with the statutory UR requirements.
§ 19.1723(e)
Comment: A commenter feels that the personnel required to answer telephone requests for preauthorization will result in additional expense to carriers but with minimal benefits to providers and insureds.
Agency Response: The department disagrees, as the statute requires the provision that is the subject of the comment.
§ 19.1723(f)
Comment: A commenter believes that the rules should define the term "material misrepresentation" to avoid potential disputes between a carrier and provider, and suggests the following definition: "any information on a physician or provider claim that varies from the information that was submitted by the physician or provider in the verification or preauthorization process."
Agency Response: The department declines to define "material misrepresentation" in the rules. Whether a material misrepresentation has occurred is a fact-specific determination that must be made on a case-by-case basis.
§ 19.1724--General
Comment: One commenter suggests that the guarantee of payment requirement should be limited to preauthorization inquiries. The commenter believes that extending the guarantee to things like eligibility is unreasonable given fluctuations in the job market and the difficulty in obtaining accurate information regarding employee status.
Agency Response: As set forth in both the statute and the rule, absent misrepresentation or failure to perform, a carrier that issues a verification may not deny or otherwise reduce payment for medical care or health care services if those services are provided before the verification expires, which shall not be less that 30 days. Given this language, it is clear that the verification process essentially requires adjudication of a claim, which must include eligibility; it is not and cannot be limited to preauthorization.
Comment: One commenter says the rule's verification process is excessively complex, that physicians do not need the level of detail outlined in the rule and do not need pre-adjudication of a claim. The commenter says that physicians only need verification that a patient is an eligible member of a health plan, and suggests that verification is not feasible for office visits. Another commenter also believes that the verification required in SB 418 is a verification of eligibility and that, once verified, the carrier may not reduce or deny the claim based on eligibility; however, the carrier could deny the claim for other reasons, such as medical necessity.
Agency Response: SB 418 provides that if a carrier verifies proposed services, the carrier may not deny or reduce payment for those services (absent misrepresentation or failure to perform the proposed services). Thus, the legislature made clear that a verification is much more than a determination of eligibility. If a provider does not wish to go through the verification process, the provider is free to obtain information concerning eligibility or other coverage issues from the carrier. However, the carrier´s provision of such information will not constitute a "verification," and a corresponding guarantee of payment, unless the procedures of § 19.1724 have been followed.
Comment: A commenter notes that a declination does not mean that a carrier will not pay a claim. Instead, a declination may mean that the carrier does not have enough information currently to issue a verification. The commenter also asserts that a provider that receives a declination is not relieved of contractual obligations to provide the service to a carrier´s members, collect the applicable co-pay, submit the claim, and give the carrier the opportunity to process the claim according to normal procedures. Another commenter, on the other hand, states that if a carrier issues a declination, the physician should be able to make arrangements with the patient for billed charges for the physician´s services.
Agency Response: The department agrees that a declination is not necessarily a determination that a claim resulting from the proposed services will not be paid but is rather a response to an inquiry from a provider that a carrier cannot then affirmatively adjudicate all matters affecting the payability of a claim. The department further agrees that a declination does not relieve the provider of its obligations under its contract with the carrier. The department fully expects that the provider will still perform the procedure, submit a clean claim, and be paid according to contract, subject to the normal claims processing procedures.
Comment: A commenter is concerned that under the proposed rule, a carrier will decline to provide a verification, and warns that, without a verification, physicians will not provide medically necessary treatment.
Agency Response: SB 418 does not require that a carrier issue a verification. A carrier may issue a declination if it lists the specific reasons for declining. The department believes that medical ethics will direct providers to do what is best for their patients with or without guarantee of payment from a carrier. Providers should also clearly understand their contractual obligations with carriers to treat enrolled members, and the consequences of refusing to treat patients based solely on declination of verification. The department will closely monitor this issue to determine if consumers are adversely affected, which is clearly not the intent of SB 418.
Comment: A commenter requests that the rules clarify that a provider´s right to payment based on a verification is conditional upon the provider´s submission of a clean claim that documents that the provider did not materially misrepresent and substantially delivered the proposed services within the specified time period. The commenter notes that SB 418 does not provide a statutory basis for restricting the claim elements for verified claims and urges the department not to do so. The commenter asks the department not to construe verification as limiting a carrier´s ability to investigate facts relating to a previously verified claim or the obligation of the provider to submit a clean claim with all the required elements.
Agency Response: Regardless of whether a physician or provider has received a verification for services, it must still timely submit a clean claim in order to avail themselves of the prompt pay provisions in Insurance Code Article 3.70-3C or the Texas HMO Act. However, the department notes that many carriers have paid claims that did not precisely include all required clean claim elements, so long as the carrier was satisfied that it had sufficient information to process and pay the claim. If the filed claim contains the necessary information to determine whether a material misrepresentation occurred and whether the provider substantially failed to perform the verified services, the rules will not preclude carriers from continuing to do so. Such claims, however, will not be subject to the prompt pay provisions.
Comment: A commenter requests that the rule provide for a verification of benefits and medical necessity upon request. The commenter suggests that this verification be contingent only upon a member´s benefits and medical necessity because no carrier can reasonably verify eligibility.
Agency Response: This option is not available under the provisions of SB 418. Any verification is a guarantee of payment for the period covered by the verification regardless of eligibility status at the time services are rendered.
Comment: Some commenters stated that physicians and providers need to clearly communicate to health plans that they are requesting a verification, to ensure that both parties understand which process is being used. A clarification should be added to the rule stating that the current processes by which health plans provide non-binding eligibility information, benefit information, and other information, is separate from the verification process and will not be considered a guarantee of payment.
Agency Response: The department agrees that it is essential that both carriers and providers clearly communicate their intent, whether the request is for verification or for use of the current process of eligibility determination. Section 19.1724(j)(10) says that a written response to a request for verification must include a statement that the proposed services are being verified or declined pursuant to Title 28 Texas Administrative Code § 19.1724. Because some physicians and providers may choose to continue seeking eligibility determinations, as has been done in the past, rather than verifications under SB 418, this should help both parties to distinguish which claims have actually been verified. In response to comments, the department has also added to adopted § 21.2803, relating to Elements of a Clean Claim, new subsections (b)(1)(Y) and (b)(2)(LL), which made verification numbers a required element of a clean claim for verified services.
Comment: A commenter asks whether a carrier, having issued a verification, may apply its claim audit software edits to claims and deny or reduce those billed services according to multiple surgery guidelines and industry standards payment reimbursement standards for a particular CPT code that the edit determines is not reimbursable.
Agency Response: The department clarifies that a claim for which a verification is issued must be paid according to the contract between the carrier and provider unless the provider substantially fails to perform the services or materially misrepresents the services to be performed. This means that all claims processing policies and procedures that are agreed to in the contract between the carrier and the provider may be applied to a claim that is the subject of a verification. A carrier may not, however, apply the terms of the evidence of coverage or insurance contract to deny or reduce payment for services that were verified.
Comment: A commenter is concerned that a carrier will be forced to repeatedly respond to requests for verification throughout a pregnancy.
Agency Response: Verifications must be effective for a minimum of 30 days, but may be for a longer period at the carrier´s option. In some cases, such as pregnancy, a carrier may decide to issue longer verification timeframes. However, if a carrier limits pregnancy-related verifications to 30 days, they must process subsequent verification requests as they are received throughout the pregnancy term.
Comment: The rules should be clarified to allow a carrier to be subrogated to a new health plan where an enrollee has left employment. It was not the intent of SB 418 to provide double payment to physicians and providers or exonerate a responsible health plan.
Agency Response: The department disagrees that it is necessary to provide for subrogation in these rules. The rules do not prevent a carrier from exercising any rights to subrogation that it may have.
Comment: A commenter requests clarification that a carrier´s use of the HIPAA 270 and 271 standard transactions do not constitute a verification under these rules.
Agency Response: Neither the HIPAA 270 or 271 includes the minimum requirements for a verification request or response under these rules, and does not constitute a verification or response to verification.
Comment: A commenter requests that the rule clarify that the verification provision is limited to preauthorization inquiries because the application of the guarantee of payments to all types of verifications would create unrealistic expectations and have negative financial impact on carriers. The commenter suggests that the verification definition condition the guarantee of payment on the patient´s being eligible for services at the time they are performed. The commenter also requests that the definition clarify that the term does not include a general confirmation of coverage statement from a carrier.
Agency Response: The department declines to make any changes in response to the comments. A verification includes a determination that a patient is eligible and that the services to be performed are covered by the insurance contract or evidence of coverage. SB 418 is clear that a claim resulting from verified services may not be denied unless the services were not substantially performed or were materially misrepresented by the provider. Providing carriers with the ability to deny a claim because the patient was not eligible at the time the services were performed would undo the guarantee that a verification represents under the statute.
§ 19.1724(a) and (b)
Comment: Commenters requested that the process for verification include an immediate response. The commenters feel that this more closely reflects the language of the statute. Personnel required by the rules should be available to provide verifications rather than simply accept requests for verifications. Furthermore, the commenters request that carriers be required to accept requests for verification and provide immediate responses via the Internet. The commenters note that some large carriers are currently providing eligibility confirmations via the Internet and do not later deny claims for lack of eligibility if the Internet service was used by the provider to confirm eligibility.
Agency Response: The adopted rule reduces the time allowed by the proposed rules for responses to requests for verification. In so doing, the department balanced the efficient and quick process that allows physicians and providers to receive verification responses in a timely manner, and allows carriers a meaningful opportunity to ascertain whether proposed services are indeed subject to payment. An immediate response would result in either an increased rate of declinations due to carriers´ inability to make all required determinations, or an increase in the number of paid claims which should not have been paid under the terms of the insurance contract or HMO evidence of coverage. The department recognizes that verification should include an efficient process that will result in as many verifications as possible, but also recognizes that payment for noncovered services will ultimately result in increased premiums for consumers. The deadlines in the adopted rules strike a balance between these important and competing concerns.
The rule does allow, but does not require, a carrier to use the Internet for verification requests. The commenter´s example of current use of the Internet for eligibility confirmation as justification for requiring this method does not take into account verification under SB 418. Carriers´ existing practice of voluntarily confirming eligibility information is limited and does not always affect the ultimate payment of a claim. Because the verification process required by SB 418 results in a guarantee of payment by the carrier, the existing eligibility-only models are not valid comparisons. However, the rules as adopted do allow a carrier the flexibility to devise an Internet-based solution for accepting verification requests and providing responses. The department encourages any model that gives physicians and providers an easy and efficient method for submitting verification requests.
§ 19.1724(a) and (c)
Comment: A commenter recommends the addition of language in subsections (a) and (c) to clarify that verification only applies to contracted providers. The commenter also recommends a requirement that the information the provider submits in a request for verification be accurate.
Agency Response: The applicability of the verification process to both contracted and certain non-contracted providers is adequately addressed in the rule. The information submitted by a provider in a request for verification must be accurate or the services may be later denied or reduced if the inaccuracy resulted in a material misrepresentation of the services to be performed. If the inaccurate information delays a carrier´s ability to timely respond to a request for verification, the carrier may decline for that specific reason.
§ 19.1724(b)
§ 19.1724(c)
Comment: Commenters note that the 18 elements required for a verification request are overly burdensome. The requirement of procedure codes for a proposed service is too restrictive because it ignores the practical reality that physicians and providers may necessarily deviate from the expected procedures or services in treating a patient. Such a deviation could render the verification meaningless. A commenter specifically indicates that procedure codes cannot be predicted prior to the services being performed.
Agency Response: The adopted rule reduces the required elements for verification in order to create a more efficient process for verification requests. Procedure codes are no longer exclusively required, and physicians and providers may instead include a specific description of the proposed services. This gives physicians and providers more flexibility while still providing carriers with sufficient information to determine whether a service should be verified. This is consistent with the statutory language that a carrier must respond to a request for verification for particular services that a provider proposes to perform.
Comment: A commenter is concerned about the increased administrative costs for physician offices associated with the rule´s cumbersome and confusing verification process.
Agency Response: The department has carefully considered the requirements for requesting and issuing a verification under SB 418 and feels that the reduced requirements in the adopted rule are appropriate. Providers who choose to use the verification process may experience some increase in administrative workload in order to submit verification requests, but the process is voluntary. Further, for those claims for which verification is obtained, the provider should experience a reduction in administrative work required for completing the claim since much of the claim development work will have already occurred during the verification process.
Comment: Several commenters state that the proposed rules require information that is only available once the medical exam has been completed, and that the purpose of verification is to determine the eligibility of the patient to be covered for certain services based on and limited to information that is reasonably known at the time the appointment is scheduled, such as reason or symptoms for which medical attention is necessary. Alternative numbers of information items are suggested instead of the proposed 18. Other commenters support retention of these items, saying that all are essential to carriers. One commenter outlines reasons why it believes many of the items are necessary: without subscriber information, a carrier may not be able to locate a patient in its system; the carrier needs to know information about other carriers, because if it is not the primary carrier it may incorrectly verify benefits; a preferred provider´s tax ID number is necessary to confirm whether or not a provider is part of a network with which the carrier contracts; place of service is necessary to determine if benefits are payable, since outpatient charges are covered on some plans only with purchase of an outpatient rider. Another commenter states that, if verification continues to be defined as a guarantee of payment, it is especially critical that the elements contained in the proposed section be maintained, and that deleting or reducing these elements would undermine the ability of insurers to provide verifications.
Agency Response: The department agrees in part and has reduced the informational items required from 18 to 13. The department has attempted to find a balance between allowing providers to efficiently request verifications and providing carriers with adequate information that will result in more efficient processing of requests and ultimately, more verifications. Requiring certain elements only if the carrier has included the information on the patient´s identification card is another way the department has tried to balance the needs of both parties. Carriers generally commented that this information was necessary. The adopted rules allow for this requirement when the carrier provides information that will enable providers to comply.
Comment: A commenter states that subscriber information does not need to be provided if the health plan does not provide that data on the identification card. Another commenter disagrees, saying that without subscriber information, it will not be able to verify a claim through its system.
Agency Response: The department agrees that a carrier may include the subscriber information on the identification card in order to ensure that it receives the information in a request for verification, and has changed the rule accordingly. The department, in adopting these rules, achieves a balance in the verification process that will encourage verifications and make the process of requesting verifications as efficient as possible. Any carrier that feels that the subscriber information is necessary for processing verifications may ensure that this information is available by including it on the insured´s or enrollee´s identification card.
Comment: Commenters state that the information required to be provided by physicians and providers should also include their proposed charges. Some provider contracts set reimbursement as a discount from billed charges. Without the charges, it is not possible to calculate the amount to be paid. This information is also necessary for the health plan to determine reasonable and customary reimbursement as well as coding requirements.
Agency Response: The department disagrees. The amount to be paid by the carrier is not an element of a verification response, therefore the commenter´s concern is unfounded. The amount a carrier would owe for a timely paid claim would be determined by the contract with the provider, which is not affected by the verification process.
Comment: A commenter requested the inclusion of both primary and secondary diagnosis codes as an element of a verification request. The commenter asserts that the proposed service may be appropriate for the secondary rather than the primary diagnosis and coverage determinations will require this information.
Agency Response: The department declines to make this change. If the carrier determines that the proposed service provided in the request for verification is not appropriate for the included primary diagnosis, the carrier may decline to issue a verification.
Comment: A commenter requests that the department clarify that a change in diagnosis after the verification is issued should be treated as a misrepresentation so as to nullify the verification.
Agency Response: The department declines to make any changes as a result of the comment. What constitutes a material misrepresentation is a fact-specific determination that can only be determined on a case-by-case basis.
Comment: A commenter strongly supports inclusion of procedure codes on the request for verification, and says that the rules should state that any code for which the provider submits charges that are not included in the request for verification should not be subject to the guarantee of payment. Another commenter says that because SB 418 requires insurers to verify payment for "a particular medical care or health care service," it is clear that the carrier needs to know the particular service that the provider intends to provide.
Agency Response: As described above, the adopted rule allows providers to submit a specific description of the proposed services in lieu of a specific procedure code. The department believes this gives physicians and providers more flexibility while still providing carriers with sufficient information in most cases. If a provider submits a specific procedure code in the request for verification, it is possible that a subsequent change to a different code may result in the services actually provided not having been subject to the original verification. However, if the claim includes both the original procedure code as well as an additional procedure code, the verification may still be effective for the verified procedure, as long as a material misrepresentation has not occurred.
Comment: Some commenters state that, because carriers design health plans based on covered services and not by diagnosis and procedure codes, it should be adequate for the physician to provide presenting symptoms or a general description of proposed services to find out if a service is covered. This will be especially true upon the implementation of SB 541 and SB 10, which will allow plans to exclude certain state-mandated benefits. The rule requires an excess of information since this process is not intended to pre-adjudicate claims.
Agency Response: The verification process may indeed result in the pre-adjudication of a claim. A verified claim may not be denied or reduced, absent misrepresentation or failure to perform the proposed services. Therefore, specific information is required to pre-adjudicate a claim based upon the services to be performed. However, in an effort to balance the interests of both sides and provide a fair and efficient verification process, the department has reduced the requirement from procedure codes to procedure codes or a specific description of services.
§ 19.1724(d)
Comment: A commenter says that the elements of information in the proposed rule may not be in the possession of the physician or provider, especially if they are working only from the patient's identification card, but are readily available to health plans in their databases of enrollees and providers.
Agency Response: The adopted rule reduces the elements required for a request for verification. In reducing the elements, the department attempted to find a balance between information readily available to a provider and the information necessary to enable a carrier to issue a guarantee of payment. The department did consider the identification cards commonly issued by carriers, and has allowed carriers to require certain information in a request for verification only if the information was supplied on the patient´s identification card.
§ 19.1724(e) and (f)
Comment: A commenter says that additional information should be conditional and requested at the time the request for verification is made. Several commenters state any additional information should be limited to that which is reasonably available and of a clinical nature. They also suggest that a three day delay unnecessarily impedes patient care. Another commenter, stating that verification is to be instantaneous, claims that subsections (e) and (f), concerning additional information, should be deleted.
Agency Response: The department agrees that the time should be shortened and has changed the rule to give carriers one day from date of receipt to seek additional information. With this change, the department continues to believe that allowing carriers to seek additional information, where necessary, before committing to pay for a particular service is reasonable and could result in more claims being verified.
§ 19.1724(f)
Comment: A commenter requests that carriers be allowed to request information via telephone, so as to not unnecessarily increase administrative costs.
Agency Response: Carriers may request additional information via telephone and any other reasonable means to assist in the decision making process. The rule has been changed to eliminate the requirement that the request for additional information is written.
§ 19.1724(g)
Comment: A commenter recommends that the rules use the statutory standard of "without delay" for responses to requests for verification. Another commenter notes that the legislature did not define "without delay." A commenter requests that the 72 hour timeframe for a response to a request for verification involving concurrent hospitalization, post-stabilization care or a life-threatening condition be reduced to 24 hours. One commenter remarks that a "bleeding patient" should not have to wait a possible 15 days to receive treatment. A commenter feels that "without delay" should never exceed 48 hours and that if a carrier cannot verify in that time, the provider may need to look to the patient for payment.
Agency Response: The rules as adopted use the standard of "without delay," but place a limit on the response time depending on the circumstance of the services to be provided by the physician or provider. The limits for verification responses are without delay, but not to exceed one hour for emergency or post-stabilization care, 24 hours for concurrent hospitalization, and five days for all other circumstances. The term "without delay" does not imply immediacy, but rather suggests that circumstances dictate the time necessary for a response. The department placed a cap on the amount of time for a response so that there would be a limit in place for carriers in processing verification requests. However, the limit does not imply that carriers must use all available time in responding to requests for verification; it simply sets a parameter for the term "without delay" that is necessary for effective regulation. The commenter´s concern regarding a delay in patient care is an important point that was considered by the department. Requests for verification are not mandatory and claims will be processed according to the terms of the evidence of coverage or insurance contract and the provider´s contract with the carrier. The department expects that patients will continue to receive care without regard for whether there is time to request and receive a verification.
Comment: One commenter suggests that the rule require a carrier that issues a declination to specify the additional information required from a preferred provider in order to issue a verification, or additional information needed from a third party and the time necessary, not to exceed three hours, to obtain that information so that the provider may then make a request for reconsideration at that time. If no further information is required from any party, the carrier must state the reasons for declination in detail.
Agency Response: The department declines to make this change. The rules allow a carrier to request any necessary additional information. If a carrier cannot obtain enough information to issue a verification, the statute and rules require the carrier to include a specific reason for the declination. A provider may choose to submit a new request for verification if additional information becomes available that addresses the reason for the declination.
§ 19.1724(g)(1)
Comment: Many commenters object to the proposed rule´s requirement that carriers provide verification not later than 15 days after the request, pointing out that SB 418 states that a carrier must inform a physician "without delay whether the service... will be paid... " A commenter references synonyms for the phrase "without delay" that the commenter feels convey its ordinary meaning, such as "immediate" and "instantaneously." Commenters also feel that the legislature meant to create a system that was instantaneous, as evidenced by the requirement that carriers have appropriate personnel available "to provide a verification" and not just accept telephone requests. Providing 15 days for a verification will likely cause patients to have to schedule two appointments, and could compromise patient care. Some commenters indicate that delaying treatment for 15 days could create a medical risk to the patient. One commenter says the department seemed to have inappropriately used the time frames from federal Employee Retirement Income Security Act (ERISA) regulations, and noted that there is neither a mention of nor reference to ERISA in SB 418. Other commenters believe it is important that carriers have at least 15 days to process verifications, noting that most requests for verification will involve non-urgent elective procedures that do not have a need for immediate turnaround and that the statute gives insurers at least 30 days to process and pay electronic claims and 45 days for non-electronic claims. A commenter also notes that the verification process affects the insurance contract between the health plan and the employer/member, and that the desire of a provider to get an immediate approval should not and cannot take precedence over the obligations and terms of the insurance contract. Because carriers are, in essence, being asked to adjudicate claims prior to services being rendered, they must be able to evaluate proposed services in the context of the applicable insu rance contract bef ore rendering the verification. This may require one or more of the following: obtaining and reviewing certificates of creditable coverage and matching with policy provisions on pre-existing conditions; performing a medical necessity review, if applicable; determining usual and customary fees; requesting and receiving additional information, if applicable; reviewing employer records; documenting the verification data within the claims system to flag a claim that has been verified; transmitting to the medical director for review and contacting the billing physician; contacting the employer to verify eligibility, new employees and added dependents; reviewing claims to determine benefit minimums and maximums; and preparing and mailing the notification of verification.
Agency Response: The department understands the concerns of the commenters regarding the amount of time and information needed by carriers in order to verify. Based on all the comments received, the department has adopted a compromise provision that reduces the maximum number of days a carrier has to verify from 15 to five. The department acknowledges that the statute requires verification to be provided "without delay" however, that concept is a relative one, based on the circumstances of each individual request. When coupled with the statutory provision that a carrier that verifies a service may not reduce or deny payment for that service, except in certain limited circumstances, a carrier´s need to obtain all necessary information becomes more acute. As noted in the preamble to the proposed rule, verification is essentially adjudication of a claim prior to the service being rendered. Considering that a carrier has 21, 30 or 45 days to adjudicate and pay a claim, the five-day requirement is reasonable. Further, the rule makes clear that the length of time needed should be specific to each individual situation: it provides that verification requests must be verified or declined "without delay, and as appropriate to the circumstances of the particular request." Finally, the department reiterates that physicians and providers should continue to provide all necessary patient care required by the insurance contract and their own legal and ethical requirements, notwithstanding the verification process.
Comment: A commenter requests that the department define "respond" as it is used in this section to clarify whether it refers to issuing a verification, simply acknowledging requests, or sending requests for additional information.
Agency Response: The department has changed the language of (h) and (i) to eliminate confusion. The changes to these subsections clarify that a telephone request received during a period in which personnel are not required must be acknowledged by the carrier within certain timeframes.
§ 19.1724(g)(2)
Comment: A commenter believes that if a patient has a life-threatening condition, the verification standard in the rule should be immediate.
Agency Response: The department agrees that certain circumstances call for a reduced timeframe, and has changed the rule to provide that if the request is related to post-stabilization care or a life-threatening condition, the response must be provided "without delay but not later than one hour after the HMO or preferred provider received the request."
Comment: A commenter disagrees with reduced verification deadlines for concurrent hospitalization, life-threatening conditions and post-stabilization care. The commenter asserts that verification, by statute, is a request relating to proposed services only and the circumstances requiring a shorter deadline involve services that are, or have been, performed by the provider. The commenter also notes that emergency care should not be the subject of verification requests, as a provider should not stop to request verification and if the services have been performed the verification process should not be applicable. The commenter believes the reduced deadline would give a provider incentive to admit a patient into the hospital and then request verification to gain access to the reduced deadline.
Agency Response: The department agrees that the statutory language references only those services that are proposed to be provided to a patient. However, the department included reduced timeframes for certain conditions so that the verification process may, in some circumstances, still take place prior to services being provided. Requests for verification relating to concurrent hospitalization, for example, may be sent to the carrier after the patient has been admitted, but prior to subsequent days of hospitalization and services performed during the hospitalization.
§ 19.1724(h)
Comment: Some commenters assert that the rules should include limitations on the reasons a carrier may use to decline a request for verification. Examples of appropriate reasons could include lack of medical necessity, including the clinical basis for the decision; claimant not eligible for coverage, including reason for ineligibility; treatment or service not covered by plan, including the contract provision that excludes the treatment or service; and physician or facility not an approved provider. Reasonable delays due to computer down time or other operational failures beyond the carrier´s control should be considered exceptions to the rule rather than legitimate reasons for declination.
Agency Response: Because the SB 418 verification process is new to both providers and carriers, and will require some systems and procedural implementation changes, the department declines at this time to limit reasons for declination. Pursuant to amendments to § 21.2821 (concerning Reporting Requirements), the department will be collecting information from carriers concerning reasons for declination. The department will monitor reasons for and trends in declination to determine whether additional regulatory action is necessary.
Comment: Some commenters state that preauthorization is a separate and distinct process from verification, and many preferred provider carriers contract with a separate entity for preauthorization services while having their own staff perform verification. Because this subsection says that a verification or declination must include the preauthorization decision if the services require preauthorization, the effect is that even if the carrier declines to verify, it must provide preauthorization information that has already been given to the provider through the preauthorization process.
Agency Response: The verification response may, in these circumstances, simply reference the prior preauthorization decision.
Comment: A commenter recommends that the verification process, including requests for verification, be in writing in order to avoid miscommunications and minimize disputes and potential liability. Another commenter questions why carriers must reduce verification responses to writing even if they do not decline to provide the verification, and note that such requirement will increase administrative costs.
Agency Response: The department believes it is essential to avoid miscommunications and disputes within the new verification process, especially since the new statute and rules are meant to expedite and streamline the claims payment process. The department believes that the rules as adopted will help accomplish this goal by requiring physicians and providers who have received verification to include that as an element of their claim filing, and by requiring carriers to either verify in writing or to follow up a telephone verification with written notice. The department is concerned that without the requirement of written confirmation of a verification or declination that identifies the information specific to the verification or declination, disputes will inevitably arise concerning what services were verified and other related issues. Providing this information in written form should reduce these types of disputes and allow the process to operate more efficiently.
Comment: A commenter suggests requiring a determination to be transmitted not later than three business days, rather than three calendar days, would ease the burden associated with staffing during holidays and weekends.
Agency Response: The department declines to change a carrier's response deadline and believes the rule as adopted reflects the intent of SB 418.
Comment: A commenter asks that the department set parameters for use of declinations, as well as parameters relating to billing patients for those services in which a declination has been provided. The commenter also asks what is to deter a carrier from providing a declination for all services. Another commenter requests that the department make it clear that a carrier may decline all requests for verification as a general business practice so long as that specific reason is given to the provider with the declination.
Agency Response: While the department declines to set parameters that will effectively disallow certain reasons for a declination, the department´s position is that the reason that must be given to the requesting provider must be specific to the verification request. The department will, on an ongoing basis, monitor the reasons given for declinations and will consult with the TACCP regarding the issue. The department declines to set parameters regarding billing of patients upon receipt of a declination. The department has made it clear that a covered service that was the subject of a declination must be paid upon submission of a claim. The statutory language of SB 418 makes it clear that a carrier may decline to issue a verification. There is nothing to suggest that a declination renders void the provider´s contract with the carrier or the insurance contract or evidence of coverage. The department recognizes that certain reasons for declinations, such as termination of a patient´s coverage, may inform a provider that a patient is not eligible to receive any services under the insurance contact and that the carrier will therefore not be paying any claims for the patient. The differences and complexities of evidences of coverage, insurance contracts and provider contracts dictate that more consideration be given to this issue. The department will monitor this issue and consult with the TACCP.
§ 19.1724(h)(5)
Comment: A commenter requests that the elements of a response to a request for verification include procedure codes or a description of the services that are verified or declined.
Agency Response: The rules, as proposed and adopted, require "a specific description, including relevant procedure codes, of the services that are verified or declined."
§ 19.1724(i)
Comment: A commenter believes that the rules should define the term "material misrepresentation" to avoid potential disputes between a carrier and provider, and suggests the following definition: "any information on a physician or provider claim that varies from the information that was submitted by the physician or provider in the verification or preauthorization process." One commenter suggests adding language to clarify that a carrier is required to honor a verification only as it pertains to covered services. It gave an example of a carrier issuing a verification for an impending hospital confinement, where the subsequently filed claim included itemized charges for patient convenience items that are excluded by the health plan. The commenter stated it was not the legislature's intent to require payment for noncovered items or services.
Agency Response: The department declines to define the term "material misrepresentation" as suggested by the commenter. The department also declines to add language clarifying that a carrier is required to honor a verification only as it pertains to covered services. Once a verification has been issued, the carrier may not apply the provisions of the insurance contract or evidence of coverage (other than applicable co-payments, deductibles, and co-insurance identified in the verification response) to deny or reduce coverage for the verified services. Whether a claim resulting from verified services is consistent with the verification is a fact-specific determination that must be made on a case by case basis.
§ 19.1724(j)
Comment: A commenter says that this section is awkwardly worded and suggests alternative language: "The provisions of this section apply to a preferred physician or healthcare provider of an HMO or preferred provider carrier. This section also applies to other non-preferred physicians or health care providers that provide the following services to an enrollee of an HMO or preferred provider carrier."
Agency Response: The department believes the current language is clear and declines to make the change.
Comment: A commenter remarks that out of network emergency physicians should not stop the delivery of medical care in order to request verification. Another commenter points out that certain provisions of other laws should ensure that emergency room physicians provide treatment without waiting to receive a verification.
Agency Response:The department agrees that the delivery of medical care or the safety of patients should not be compromised in order to perform verification requests. The department is confident that providers will continue to make prudent health care decisions that are in the best interest of their patients, regardless of issues related to verification provisions.
For, with changes: Advanced Reproductive Care Center of Irving, Aetna, American National Insurance Company, Andrews & Kurth, Austin Anesthesiology Group, Austin Cardiovascular Associates, Austin Gastroenterology, Baylor College of Medicine & Neurosurgical Group of Texas, Baylor Health Care System, Blue Cross and Blue Shield of Texas, Cardiothoracic and Vascular Surgeons, Center for Orthopaedic Specialties, CIGNA Dental Health of Texas, Inc., CIGNA Healthcare of Texas, Inc., Clinics of North Texas, L.L.P., Coastal Surgical Group, L.C., Colon and Rectal Clinic, P.A., Columbus Medical Clinic, Community First Health Plans, Community Medicine Associates, Dallas County Medical Society, Dallas Family Doctors, Endocrinology Associates of Houston, P.A., First Health, Fortis Insurance Company, Golden Rule, Gulf Quest L.P., Harris County Hospital District, Harris County Medical Society, Health Care Professionals for Fair Business Practices, Health Group Management Company, Health Insurance Association of America, HealthCore Physicians Group, HealthSouth Corporation, Houston Eye Associates, Humana, Infectious Care, Kelsey-Seybold Clinic, KSF Orthopaedic Center, P.A., Magellan Behavioral Health, Medical Clinic of North Texas, P.A., Medicine Associates of North Texas ­ Forest Location, Medicine Associates of North Texas ­ Mid Cities Office, Medicine Associates of North Texas - East Dallas Office, Memorial Hermann Hospital, National Association of Dental Plans, Neurosurgical Group of Texas, North East OB/GYN, North Texas Heart Center, Northwest Diagnostic Clinic, Oncology Consultants, P.A., Office of Public Insurance Counsel, Pacific Life, Pathology Reference Laboratory, Patient Physician Network Holding Company, San Antonio Orthopaedic Group, Skinner Clinic, South Texas Radiology Group, Texas Association of Business, Texas Association of Health Plans, Texas Association of Life and Health Insurers, Texas Digestive Disease Consultants, Inc., Texas Eye Institute, Texas Fertility, P.A., Texas Health Resources , T exas Hospital Association, Texas Medical Association, Texas Medical Group Management Association, Texas Oncology, P.A., Texas Primary Care Coalition, Texoma Independent Physicians, The Diaz Clinic, The Health Group, The Institute for Rehabilitation and Research Systems, The University of Texas Health Science Center at Houston, The University of Texas Medical Branch, The Woman´s Group, Total Vision Health Plan of Texas, Triad Hospitals, UICI, Mid-West Life, Unicare, United Concordia, United Healthcare, University Care Plus, UT Houston, UT Houston ­ Pediatrics, Wichita Falls Family Practice Residency Program, Women Partners in OB/GYN, 39 individual physicians, two other individuals in the medical field, and eight members of the Texas House of Representatives,
The amendments and new sections are adopted under the Insurance Code Article 3.70-3C and Sections 36.001, 843.347, and 843.348. Article 3.70-3C and § § 843.347 and 843.348 provide for the processes of preauthorization and verification for preferred provider benefit plans and HMOs, respectively. Section 36.001 provides that the Commissioner of Insurance may adopt any rules necessary and appropriate to implement the powers and duties of the Texas Department of Insurance under the Insurance Code and other laws of this state.
§ 19.1703. Definitions. The following words and terms, when used in this subchapter, shall have the following meanings, unless the context clearly indicates otherwise.
(9) Declination-- A response to a request for verification in which an HMO or preferred provider carrier does not issue a verification for proposed medical care or health care services. A declination is not necessarily a determination that a claim resulting from the proposed services will not ultimately be paid.
(A) with regard to a preferred provider carrier, a preferred provider as defined by Insurance Code Article 3.70-3C, § 1(10) (Preferred Provider Benefit Plans) or Article 3.70-3C, § 1(1) (Use of Advanced Practice Nurses and Physician Assistants by Preferred Provider Plans).
(i) a physician, as defined by Insurance Code § 843.002(22), who is a member of that HMO's delivery network; or
(ii) a provider, as defined by Insurance Code § 843.002(24), who is a member of that HMO's delivery network.
(37) Verification--A guarantee by an HMO or preferred provider carrier that the HMO or preferred provider carrier will pay for proposed medical care or health care services if the services are rendered within the required timeframe to the patient for whom the services are proposed. The term includes pre-certification, certification, re-certification and any other term that would be a reliable representation by an HMO or preferred provider carrier to a physician or provider if the request for the pre-certification, certification, re-certification, or representation includes the requirements of § 19.1724(d) of this title (relating to Verification).
§ 19.1723. Preauthorization.
(d) On receipt of a preauthorization request from a preferred provider for proposed services that require preauthorization, the HMO or preferred provider carrier shall issue and transmit a determination indicating whether the proposed medical or health care services are preauthorized. An HMO or preferred provider carrier shall respond to request for preauthorization within the following time periods.
(1) For services not included under paragraphs (2) and (3) of this subsection, the determination must be issued and transmitted not later than the third calendar day after the date the request is received by the HMO or preferred provider carrier. If the request is received outside of the period requiring the availability of appropriate personnel as required in subsection (e), the determination must be issued and transmitted within three calendar days from the beginning of the next time period requiring such personnel.
(2) If the proposed medical or health care services are for concurrent hospitalization care, the HMO or preferred provider carrier shall issue and transmit a determination indicating whether proposed services are preauthorized within 24 hours of receipt of the request. If the request is received outside of the period requiring the availability of appropriate personnel as required in subsection (e), the determination must be issued and transmitted within 24 hours from the beginning of the next time period requiring such personnel.
(3) If the proposed medical care or health care services involve post-stabilization treatment, or a life-threatening condition as defined in § 19.1703 of this title (relating to Definitions), the HMO or preferred provider carrier shall issue and transmit a determination indicating whether proposed services are preauthorized within the time appropriate to the circumstances relating to the delivery of the services and the condition of the patient, but in no case to exceed one hour from receipt of the request. If the request is received outside of the period requiring the availability of appropriate personnel as required in subsection (e), the determination must be issued and transmitted within one hour from the beginning of the next time period requiring such personnel. In such circumstances, the determination shall be provided to the treating physician or health care provider. If the HMO or preferred provider carrier issues an adverse determination in response to a request for post-stabilization treatment or a request for treatment involving a life-threatening condition, the HMO or preferred provider carrier shall provide to the enrollee or person acting on behalf of the enrollee, and the enrollee's provider of record, the notification required by § 19.1721(c) of this title (relating to Independent Review of Adverse Determinations)
(e) A preferred provider may inquire via telephone as to the HMO or preferred provider carrier´s preauthorization determination. An HMO or preferred provider carrier shall have appropriate personnel as described in § 19.1706 of this title (relating to Personnel) reasonably available at a toll-free telephone number to provide the determination between 6:00 a.m. and 6:00 p.m. central time Monday through Friday on each day that is not a legal holiday and between 9:00 a.m. and noon central time on Saturday, Sunday, and legal holidays. An HMO or preferred provider carrier must have a telephone system capable of accepting or recording incoming inquiries after 6:00 p.m. central time Monday through Friday and after noon central time on Saturday, Sunday, and legal holidays and must acknowledge each of those calls not later than 24 hours after the call is received. An HMO or preferred provider carrier providing a determination under this subsection shall, within three calendar days of receipt of the request, provide a written notification to the preferred provider.
(g) If an HMO or preferred provider carrier issues an adverse determination in response to a request made under subsection (d) of this section, a notice consistent with the provisions of § 19.1710(c) of this title (relating to Notice of Determinations Made by Utilization Review Agents) shall be provided to the enrollee, a person acting on behalf of the enrollee, or the enrollee´s provider of record. An enrollee may appeal any adverse determination in accordance with § 19.1712 of this title (relating to Appeal of Adverse Determination of Utilization Review Agents).
§ 19.1724. Verification.
(4) physicians or health care providers that provide to an enrollee of an HMO or preferred provider carrier:
(c) An HMO or preferred provider carrier shall have appropriate personnel reasonably available at a toll-free telephone number to accept telephone requests for verification and to provide determinations of previously requested verifications between 6:00 a.m. and 6:00 p.m. central time Monday through Friday on each day that is not a legal holiday and between 9:00 a.m. and noon central time on Saturday, Sunday, and legal holidays. An HMO or preferred provider carrier must have a telephone system capable of accepting or recording incoming inquiries after 6:00 p.m. central time Monday through Friday and after noon central time on Saturday, Sunday, and legal holidays. The HMO or preferred provider carrier must acknowledge each of those calls not later than:
(1) for requests relating to post-stabilization care or a life-threatening condition, within one hour after the beginning of the next time period requiring the availability of appropriate personnel at the toll-free telephone number; and
(2) for requests relating to concurrent hospitalization, within 24 hours after the beginning of the next time period requiring the availability of appropriate personnel at the toll-free telephone number; and
(3) for all other requests, within two calendar days after the beginning of the next time period requiring the availability of appropriate personnel at the toll-free telephone number.
(8) place of service code where services will be provided and, if place of service is other than provider´s office or provider´s location, name of hospital or facility where proposed service will be provided;
(e) Receipt of a written request or a written response to a request for verification under this section is subject to the provisions of § 21.2816 of this title (relating to Date of Receipt).
(g) A request for information under subsection (f) of this section must:
(h) On receipt of a request for verification from a preferred provider, the HMO or preferred provider carrier shall issue a verification or declination. An HMO or preferred provider carrier shall issue the verification or declination within the following time periods.
(1) Except as provided in paragraphs (2) and (3) of this subsection, an HMO or preferred provider carrier shall provide a verification or declination in response to a request for verification without delay, and as appropriate to the circumstances of the particular request, but not later than five days after the date of receipt of the request for verification. If the request is received outside of the period requiring the availability of appropriate personnel as required in subsection (c), the determination must be provided within five days from the beginning of the next time period requiring such personnel.
(2) If the request is related to a concurrent hospitalization, the response must be sent to the preferred provider without delay but not later than 24 hours after the HMO or preferred provider carrier received the request for verification. If the request is received outside of the period requiring the availability of appropriate personnel as required in subsection (c), the determination must be provided within 24 hours from the beginning of the next time period requiring such personnel.
(3) If the request is related to post-stabilization care or a life-threatening condition, the response must be sent to the preferred provider without delay but not later than one hour after the HMO or preferred provider carrier received the request for verification. If the request is received outside of the period requiring the availability of appropriate personnel as required in subsection (c), the determination must be provided within one hour from the beginning of the next time period requiring such personnel.
(i) If the request involves services for which preauthorization is required, the HMO or preferred provider carrier shall follow the procedures set forth in § 19.1723 of this title (relating to Preauthorization) and respond regarding the preauthorization request in compliance with that section.
(j) A verification or declination may be delivered via telephone call, in writing or by other means, including the Internet, as agreed to by the preferred provider and the HMO or preferred provider carrier. If the verification or declination is delivered via telephone call, the HMO or preferred provider carrier shall, within three calendar days of providing a verbal response, provide a written response which must include, at a minimum:
(9) a unique verification number that allows the HMO or preferred provider carrier to match the verification and subsequent claims related to the proposed service; and
(10) a statement that the proposed services are being verified or declined pursuant to Title 28 Texas Administrative Code § 19.1724.
(k) An HMO or preferred provider carrier that issues a verification may not deny or otherwise reduce payment to the preferred provider for those medical care or health care services if provided on or before the expiration date for the verification, which shall not be less than 30 days, unless the preferred provider has materially misrepresented the proposed medical or health care services or has substantially failed to perform the medical or health care services as verified.
(l) The provisions of this section may not be waived, voided, or nullified by contract.