Texas Administrative Code › Title 28 - INSURANCE › Part 1 - TEXAS DEPARTMENT OF INSURANCE › Chapter 3 - LIFE, ACCIDENT, AND HEALTH INSURANCE AND ANNUITIES › Subchapter X - PREFERRED AND EXCLUSIVE PROVIDER PLANS › Division 1 - GENERAL REQUIREMENTS › Section 3.3703 - Contracting Requirements

Current through Reg. 49, No. 28; July 12, 2024
(a) An insurer
					 marketing a preferred provider benefit plan must contract with physicians and
					 health care providers to ensure that all medical and health care services and
					 items contained in the package of benefits for which coverage is provided,
					 including treatment of illnesses and injuries, will be provided under the plan
					 in a manner that ensures both availability and accessibility of adequate
					 personnel, specialty care, and facilities. Each contract must meet the
					 following requirements:
(1) A contract between
					 a preferred provider and an insurer may not restrict a physician or health care
					 provider from contracting with other insurers, preferred provider plans,
					 preferred provider networks or organizations, exclusive provider benefit plans,
					 exclusive provider networks or organizations, health care collaboratives, or
					 HMOs.
(2) Any term or condition
					 limiting participation on the basis of quality that is contained in a contract
					 between a preferred provider and an insurer is required to be consistent with
					 established standards of care for the profession.
(3) In the case of physicians or
					 practitioners with hospital or institutional provider privileges who provide a
					 significant portion of care in a hospital or institutional provider setting, a
					 contract between a preferred provider and an insurer may contain terms and
					 conditions that include the possession of practice privileges at preferred
					 hospitals or institutions, except that if no preferred hospital or institution
					 offers privileges to members of a class of physicians or practitioners, the
					 contract may not provide that the lack of hospital or institutional provider
					 privileges may be a basis for denial of participation as a preferred provider
					 to such physicians or practitioners of that class.
(4) A contract between an insurer and a
					 hospital or institutional provider must not, as a condition of staff membership
					 or privileges, require a physician or practitioner to enter into a preferred
					 provider contract. This prohibition does not apply to requirements concerning
					 practice conditions other than conditions of membership or
					 privileges.
(5) A contract between
					 a preferred provider and an insurer may provide that the preferred provider
					 will not bill the insured for unnecessary care, if a physician or practitioner
					 panel has determined the care was unnecessary, but the contract may not require
					 the preferred provider to pay hospital, institutional, laboratory, X-ray, or
					 like charges resulting from the provision of services lawfully ordered by a
					 physician or health care provider, even though such service may be determined
					 to be unnecessary.
(6) A contract
					 between a preferred provider and an insurer may not:
(A) contain restrictions on the classes of
					 physicians and practitioners who may refer an insured to another physician or
					 practitioner; or
(B) require a
					 referring physician or practitioner to bear the expenses of a referral for
					 specialty care in or out of the preferred provider panel. Savings from
					 cost-effective utilization of health services by contracting physicians or
					 health care providers may be shared with physicians or health care providers in
					 the aggregate.
(7) A
					 contract between a preferred provider and an insurer may not contain any
					 financial incentives to a physician or a health care provider which act
					 directly or indirectly as an inducement to limit medically necessary services.
					 This subsection does not prohibit the savings from cost-effective utilization
					 of health services by contracting physicians or health care providers from
					 being shared with physicians or health care providers in the
					 aggregate.
(8) An insurer's
					 contract with a physician, physician group, or practitioner must have a
					 mechanism for the resolution of complaints initiated by an insured, a
					 physician, physician group, or practitioner. The mechanism must provide for
					 reasonable due process, including, in an advisory role only, a review panel
					 selected as specified in §
												3.3706(b)(2) of
					 this title (relating to Designation as a Preferred Provider, Decision to
					 Withhold Designation, Termination of a Preferred Provider, Review of
					 Process).
(9) A contract between a
					 preferred provider and an insurer may not require any health care provider,
					 physician, or physician group to execute hold harmless clauses that shift an
					 insurer's tort liability resulting from acts or omissions of the insurer to the
					 preferred provider.
(10) A contract
					 between a preferred provider and an insurer must require a preferred provider
					 who is compensated by the insurer on a discounted fee basis to agree to bill
					 the insured only on the discounted fee and not the full charge.
(11) A contract between a preferred provider
					 and an insurer must require the insurer to comply with all applicable statutes
					 and rules pertaining to prompt payment of clean claims with respect to payment
					 to the provider for covered services rendered to insureds.
(12) A contract between a preferred provider
					 and an insurer must require the provider to comply with the Insurance Code
					 §§
												1301.152 -
					 1301.154, which
					 relates to Continuity of Care.
(13)
					 A contract between a preferred provider and an insurer may not prohibit,
					 penalize, permit retaliation against, or terminate the provider for
					 communicating with any individual listed in Insurance Code §
												1301.067, concerning
					 Interference with Relationship Between Patient and Physician or Health Care
					 Provider Prohibited, about any of the matters set forth in the
					 contract.
(14) A contract between a
					 preferred provider and an insurer conducting, using, or relying upon economic
					 profiling to terminate physicians or health care providers from a plan must
					 require the insurer to inform the provider of the insurer's obligation to
					 comply with Insurance Code §
												1301.058, concerning
					 Economic Profiling.
(15) A contract
					 between a preferred provider and an insurer that engages in quality assessment
					 is required to disclose in the contract all requirements of Insurance Code
					 §
												1301.059(b),
					 concerning Quality Assessment.
(16)
					 A contract between a preferred provider and an insurer may not require a
					 physician to issue an immunization or vaccination protocol for an immunization
					 or vaccination to be administered to an insured by a pharmacist.
(17) A contract between a preferred provider
					 and an insurer may not prohibit a pharmacist from administering immunizations
					 or vaccinations if they are administered in accordance with the Texas Pharmacy
					 Act, Chapters 551 - 566 and Chapters 568 -
					 569 of the
					 Occupations Code, and implementing rules.
(18) A contract between a preferred provider
					 and an insurer must require a provider that voluntarily terminates the contract
					 to provide reasonable notice to the insured, and must require the insurer to
					 provide assistance to the provider as set forth in Insurance Code §
												1301.160(b),
					 concerning Notification of Termination of Participation of Preferred
					 Provider.
(19) A contract between a
					 preferred provider and an insurer must require written notice to the provider
					 on termination of the contract by the insurer, and in the case of termination
					 of a contract between an insurer and a physician or practitioner, the notice
					 must include the provider's right to request a review, as specified in §
												3.3706(d) of this
					 title.
(20) A contract between a
					 preferred provider and an insurer must include provisions that will entitle the
					 preferred provider upon request to all information necessary to determine that
					 the preferred provider is being compensated in accordance with the contract. A
					 preferred provider may make the request for information by any reasonable and
					 verifiable means. The information must include a level of detail sufficient to
					 enable a reasonable person with sufficient training, experience, and competence
					 in claims processing to determine the payment to be made according to the terms
					 of the contract for covered services that are rendered to insureds. The insurer
					 may provide the required information by any reasonable method through which the
					 preferred provider can access the information, including email, computer disks,
					 paper, or access to an electronic database. Amendments, revisions, or
					 substitutions of any information provided in accordance with this paragraph are
					 required to be made under subparagraph (D) of this paragraph and, when
					 applicable subparagraph (J) of this paragraph. The insurer is required to
					 provide the fee schedules and other required information by the 30th day after
					 the date the insurer receives the preferred provider's request.
(A) This information is required to include a
					 preferred provider specific summary and explanation of all payment and
					 reimbursement methods that will be used to pay claims submitted by the
					 preferred provider. At a minimum, the information is required to include:
(i) a fee schedule, including, if applicable,
					 CPT, HCPCS, ICD-9-CM codes or successor codes, and modifiers:
(I) by which all claims for covered services
					 submitted by or on behalf of the preferred provider will be calculated and
					 paid; or
(II) that pertains to the
					 range of health care services reasonably expected to be delivered under the
					 contract by that preferred provider on a routine basis along with a toll-free
					 number or electronic address through which the preferred provider may request
					 the fee schedules applicable to any covered services that the preferred
					 provider intends to provide to an insured and any other information required by
					 this paragraph that pertains to the service for which the fee schedule is being
					 requested if that information has not previously been provided to the preferred
					 provider;
(ii) all
					 applicable coding methodologies;
(iii) all applicable bundling processes,
					 which are required to be consistent with nationally recognized and generally
					 accepted bundling edits and logic;
(iv) all applicable downcoding
					 policies;
(v) a description of any
					 other applicable policy or procedure the insurer may use that affects the
					 payment of specific claims submitted by or on behalf of the preferred provider,
					 including recoupment;
(vi) any
					 addenda, schedules, exhibits, or policies used by the insurer in carrying out
					 the payment of claims submitted by or on behalf of the preferred provider that
					 are necessary to provide a reasonable understanding of the information provided
					 under this paragraph; and
(vii) the
					 publisher, product name, and version of any software the insurer uses to
					 determine bundling and unbundling of claims.
(B) In the case of a reference to source
					 information as the basis for fee computation that is outside the control of the
					 insurer, such as state Medicaid or federal Medicare fee schedules, the
					 information provided by the insurer is required to clearly identify the source
					 and explain the procedure by which the preferred provider may readily access
					 the source electronically, telephonically, or as otherwise agreed to by the
					 parties.
(C) Nothing in this
					 paragraph may be construed to require an insurer to provide specific
					 information that would violate any applicable copyright law or licensing
					 agreement. However, the insurer is required to supply, in lieu of any
					 information withheld on the basis of copyright law or licensing agreement, a
					 summary of the information that will allow a reasonable person with sufficient
					 training, experience, and competence in claims processing to determine the
					 payment to be made according to the terms of the contract for covered services
					 that are rendered to insureds as required by subparagraph (A) of this
					 paragraph.
(D) No amendment,
					 revision, or substitution of claims payment procedures or any of the
					 information required to be provided by this paragraph will be effective as to
					 the preferred provider, unless the insurer provides at least 90 calendar days'
					 written notice to the preferred provider identifying with specificity the
					 amendment, revision, or substitution. An insurer may not make retroactive
					 changes to claims payment procedures or any of the information required to be
					 provided by this paragraph. Where a contract specifies mutual agreement of the
					 parties as the sole mechanism for requiring amendment, revision, or
					 substitution of the information required by this paragraph, the written notice
					 specified in this section does not supersede the requirement for mutual
					 agreement.
(E) Failure to comply
					 with this paragraph constitutes a violation as set forth in subsection (b) of
					 this section.
(F) This paragraph
					 applies to all contracts entered into or renewed on or after the effective date
					 of this paragraph. Upon receipt of a request, the insurer is required to
					 provide the information required by subparagraphs (A) - (D) of this paragraph
					 to the preferred provider by the 30th day after the date the insurer receives
					 the preferred provider's request.
(G) A preferred provider that receives
					 information under this paragraph:
(i) may not
					 use or disclose the information for any purpose other than:
(I) the preferred provider's practice
					 management;
(II) billing
					 activities;
(III) other business
					 operations; or
(IV) communications
					 with a governmental agency involved in the regulation of health care or
					 insurance;
(ii) may not
					 use this information to knowingly submit a claim for payment that does not
					 accurately represent the level, type, or amount of services that were actually
					 provided to an insured or to misrepresent any aspect of the services;
					 and
(iii) may not rely upon
					 information provided in accordance with this paragraph about a service as a
					 representation that an insured is covered for that service under the terms of
					 the insured's policy or certificate.
(H) A preferred provider that receives
					 information under this paragraph may terminate the contract on or before the
					 30th day after the date the preferred provider receives information requested
					 under this paragraph without penalty or discrimination in participation in
					 other health care products or plans. If a preferred provider chooses to
					 terminate the contract, the insurer is required to assist the preferred
					 provider in providing the notice required by paragraph (18) of this
					 subsection.
(I) The provisions of
					 this paragraph may not be waived, voided, or nullified by contract.
(J) No adverse material change to a preferred
					 provider contract will be effective as to the preferred provider unless the
					 adverse material change is made in accordance with Insurance Code §
													1301.0642, concerning
					 Contract Provisions Allowing Certain Adverse Material Changes Prohibited, to
					 the extent applicable.
(21) An insurer may require a preferred
					 provider to retain in the preferred provider's records updated information
					 concerning a patient's other health benefit plan coverage.
(22) Upon request by a preferred provider, an
					 insurer is required to include a provision in the preferred provider's contract
					 providing that the insurer and the insurer's clearinghouse may not refuse to
					 process or pay an electronically submitted clean claim because the claim is
					 submitted together with or in a batch submission with a claim that is
					 deficient. As used in this section, the term "batch submission" is a group of
					 electronic claims submitted for processing at the same time within a HIPAA
					 standard ASC X12N 837 Transaction Set and identified by a batch control number.
					 This paragraph applies to a contract entered into or renewed on or after
					 January 1, 2006.
(23) A contract
					 between an insurer and a preferred provider other than an institutional
					 provider may contain a provision requiring a referring physician or provider,
					 or a designee, to disclose to the insured:
(A)
					 that the physician, provider, or facility to whom the insured is being referred
					 might not be a preferred provider; and
(B) if applicable, that the referring
					 physician or provider has an ownership interest in the facility to which the
					 insured is being referred.
(24) A contract provision that requires
					 notice as specified in paragraph (23)(A) of this subsection is required to
					 allow for exceptions for emergency care and as necessary to avoid interruption
					 or delay of medically necessary care and may not limit access to nonpreferred
					 providers.
(25) A contract between
					 an insurer and a preferred provider must require the preferred provider to
					 comply with all applicable requirements of Insurance Code §
												1661.005, concerning
					 Refund of Overpayment.
(26) A
					 contract between an insurer and a facility must require that the facility give
					 notice to the insurer of the termination of a contract between the facility and
					 a facility-based physician or provider group that is a preferred provider for
					 the insurer as soon as reasonably practicable, but not later than the fifth
					 business day following termination of the contract.
(27) A contract between an insurer and a
					 preferred provider must require, except for instances of emergency care as
					 defined under Insurance Code §
												1301.0053, concerning
					 Exclusive Provider Benefit Plans: Emergency Care and §1301.155(a),
					 concerning Emergency Care, that a physician or provider referring an insured to
					 a facility for surgery:
(A) notify the insured
					 of the possibility that out-of-network providers may provide treatment and that
					 the insured can contact the insurer for more information;
(B) notify the insurer that surgery has been
					 recommended; and
(C) notify the
					 insurer of the facility that has been recommended for the surgery.
(28) A contract between an insurer
					 and a facility must require, except for instances of emergency care as defined
					 under Insurance Code §
												1301.0053 and §
												1301.155(a),
					 that the facility, when scheduling surgery:
(A) notify the insured of the possibility
					 that out-of-network providers may provide treatment and that the insured can
					 contact the insurer for more information; and
(B) notify the insurer that surgery has been
					 scheduled.
(29) A
					 contract between an insurer and a preferred provider must comply with Insurance
					 Code §
												1458.101, concerning
					 Contract Requirements, to the extent applicable.
(30) A contract between an insurer and a
					 preferred provider that is an optometrist or therapeutic optometrist must
					 comply with Insurance Code Chapter 1451, Subchapter D, concerning Access to
					 Optometrists Used Under Managed Care Plan.