S.B. No. 1264
 
 
 
 
AN ACT
  relating to consumer protections against certain medical and health
  care billing by certain out-of-network providers.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
  ARTICLE 1. ELIMINATION OF SURPRISE BILLING FOR CERTAIN HEALTH
  BENEFIT PLANS
         SECTION 1.01.  Subtitle G, Title 5, Insurance Code, is
  amended by adding Chapter 752 to read as follows:
  CHAPTER 752. ENFORCEMENT OF BALANCE BILLING PROHIBITIONS
         Sec. 752.0001.  DEFINITION.  In this chapter,
  "administrator" has the meaning assigned by Section 1467.001.
         Sec. 752.0002.  INJUNCTION FOR BALANCE BILLING. (a)  If the
  attorney general receives a referral from the appropriate
  regulatory agency indicating that an individual or entity,
  including a health benefit plan issuer or administrator, has
  exhibited a pattern of intentionally violating a law that prohibits
  the individual or entity from billing an insured, participant, or
  enrollee in an amount greater than an applicable copayment,
  coinsurance, and deductible under the insured's, participant's, or
  enrollee's managed care plan or that imposes a requirement related
  to that prohibition, the attorney general may bring a civil action
  in the name of the state to enjoin the individual or entity from the
  violation.
         (b)  If the attorney general prevails in an action brought
  under Subsection (a), the attorney general may recover reasonable
  attorney's fees, costs, and expenses, including court costs and
  witness fees, incurred in bringing the action.
         Sec. 752.0003.  ENFORCEMENT BY REGULATORY AGENCY. (a)  An
  appropriate regulatory agency that licenses, certifies, or
  otherwise authorizes a physician, health care practitioner, health
  care facility, or other health care provider to practice or operate
  in this state may take disciplinary action against the physician,
  practitioner, facility, or provider if the physician,
  practitioner, facility, or provider violates a law that prohibits
  the physician, practitioner, facility, or provider from billing an
  insured, participant, or enrollee in an amount greater than an
  applicable copayment, coinsurance, and deductible under the
  insured's, participant's, or enrollee's managed care plan or that
  imposes a requirement related to that prohibition.
         (b)  The department may take disciplinary action against a
  health benefit plan issuer or administrator if the issuer or
  administrator violates a law requiring the issuer or administrator
  to provide notice of a balance billing prohibition or make a related
  disclosure.
         (c)  A regulatory agency described by Subsection (a) or the
  commissioner may adopt rules as necessary to implement this
  section. Section 2001.0045, Government Code, does not apply to
  rules adopted under this subsection.
         SECTION 1.02.  Subchapter A, Chapter 1271, Insurance Code,
  is amended by adding Section 1271.008 to read as follows:
         Sec. 1271.008.  BALANCE BILLING PROHIBITION NOTICE. (a)  A
  health maintenance organization shall provide written notice in
  accordance with this section in an explanation of benefits provided
  to the enrollee and the physician or provider in connection with a
  health care service or supply provided by a non-network physician
  or provider. The notice must include:
               (1)  a statement of the billing prohibition under
  Section 1271.155, 1271.157, or 1271.158, as applicable;
               (2)  the total amount the physician or provider may
  bill the enrollee under the enrollee's health benefit plan and an
  itemization of copayments, coinsurance, deductibles, and other
  amounts included in that total; and
               (3)  for an explanation of benefits provided to the
  physician or provider, information required by commissioner rule
  advising the physician or provider of the availability of mediation
  or arbitration, as applicable, under Chapter 1467.
         (b)  A health maintenance organization shall provide the
  explanation of benefits with the notice required by this section to
  a physician or health care provider not later than the date the
  health maintenance organization makes a payment under Section
  1271.155, 1271.157, or 1271.158, as applicable.
         SECTION 1.03.  Section 1271.155, Insurance Code, is amended
  by amending Subsection (b) and adding Subsections (f), (g), and (h)
  to read as follows:
         (b)  A health care plan of a health maintenance organization
  must provide the following coverage of emergency care:
               (1)  a medical screening examination or other
  evaluation required by state or federal law necessary to determine
  whether an emergency medical condition exists shall be provided to
  covered enrollees in a hospital emergency facility or comparable
  facility;
               (2)  necessary emergency care shall be provided to
  covered enrollees, including the treatment and stabilization of an
  emergency medical condition; [and]
               (3)  services originated in a hospital emergency
  facility, freestanding emergency medical care facility, or
  comparable emergency facility following treatment or stabilization
  of an emergency medical condition shall be provided to covered
  enrollees as approved by the health maintenance organization,
  subject to Subsections (c) and (d); and
               (4)  supplies related to a service described by this
  subsection shall be provided to covered enrollees.
         (f)  For emergency care subject to this section or a supply
  related to that care, a health maintenance organization shall make
  a payment required by Subsection (a) directly to the non-network
  physician or provider not later than, as applicable:
               (1)  the 30th day after the date the health maintenance
  organization receives an electronic clean claim as defined by
  Section 843.336 for those services that includes all information
  necessary for the health maintenance organization to pay the claim;
  or
               (2)  the 45th day after the date the health maintenance
  organization receives a nonelectronic clean claim as defined by
  Section 843.336 for those services that includes all information
  necessary for the health maintenance organization to pay the claim.
         (g)  For emergency care subject to this section or a supply
  related to that care, a non-network physician or provider or a
  person asserting a claim as an agent or assignee of the physician or
  provider may not bill an enrollee in, and the enrollee does not have
  financial responsibility for, an amount greater than an applicable
  copayment, coinsurance, and deductible under the enrollee's health
  care plan that:
               (1)  is based on:
                     (A)  the amount initially determined payable by
  the health maintenance organization; or
                     (B)  if applicable, a modified amount as
  determined under the health maintenance organization's internal
  appeal process; and
               (2)  is not based on any additional amount determined
  to be owed to the physician or provider under Chapter 1467.
         (h)  This section may not be construed to require the
  imposition of a penalty under Section 843.342.
         SECTION 1.04.  Subchapter D, Chapter 1271, Insurance Code,
  is amended by adding Sections 1271.157 and 1271.158 to read as
  follows:
         Sec. 1271.157.  NON-NETWORK FACILITY-BASED PROVIDERS.
  (a)  In this section, "facility-based provider" means a physician
  or provider who provides health care services to patients of a
  health care facility.
         (b)  Except as provided by Subsection (d), a health
  maintenance organization shall pay for a covered health care
  service performed for or a covered supply related to that service
  provided to an enrollee by a non-network physician or provider who
  is a facility-based provider at the usual and customary rate or at
  an agreed rate if the provider performed the service at a health
  care facility that is a network provider.  The health maintenance
  organization shall make a payment required by this subsection
  directly to the physician or provider not later than, as
  applicable:
               (1)  the 30th day after the date the health maintenance
  organization receives an electronic clean claim as defined by
  Section 843.336 for those services that includes all information
  necessary for the health maintenance organization to pay the claim;
  or
               (2)  the 45th day after the date the health maintenance
  organization receives a nonelectronic clean claim as defined by
  Section 843.336 for those services that includes all information
  necessary for the health maintenance organization to pay the claim.
         (c)  Except as provided by Subsection (d), a non-network
  facility-based provider or a person asserting a claim as an agent or
  assignee of the provider may not bill an enrollee receiving a health
  care service or supply described by Subsection (b) in, and the
  enrollee does not have financial responsibility for, an amount
  greater than an applicable copayment, coinsurance, and deductible
  under the enrollee's health care plan that:
               (1)  is based on:
                     (A)  the amount initially determined payable by
  the health maintenance organization; or
                     (B)  if applicable, a modified amount as
  determined under the health maintenance organization's internal
  appeal process; and
               (2)  is not based on any additional amount determined
  to be owed to the provider under Chapter 1467.
         (d)  This section does not apply to a nonemergency health
  care or medical service:
               (1)  that an enrollee elects to receive in writing in
  advance of the service with respect to each non-network physician
  or provider providing the service; and
               (2)  for which a non-network physician or provider,
  before providing the service, provides a complete written
  disclosure to the enrollee that:
                     (A)  explains that the physician or provider does
  not have a contract with the enrollee's health benefit plan;
                     (B)  discloses projected amounts for which the
  enrollee may be responsible; and
                     (C)  discloses the circumstances under which the
  enrollee would be responsible for those amounts.
         (e)  This section may not be construed to require the
  imposition of a penalty under Section 843.342.
         Sec. 1271.158.  NON-NETWORK DIAGNOSTIC IMAGING PROVIDER OR
  LABORATORY SERVICE PROVIDER. (a)  In this section, "diagnostic
  imaging provider" and "laboratory service provider" have the
  meanings assigned by Section 1467.001.
         (b)  Except as provided by Subsection (d), a health
  maintenance organization shall pay for a covered health care
  service performed by or a covered supply related to that service
  provided to an enrollee by a non-network diagnostic imaging
  provider or laboratory service provider at the usual and customary
  rate or at an agreed rate if the provider performed the service in
  connection with a health care service performed by a network
  physician or provider.  The health maintenance organization shall
  make a payment required by this subsection directly to the
  physician or provider not later than, as applicable:
               (1)  the 30th day after the date the health maintenance
  organization receives an electronic clean claim as defined by
  Section 843.336 for those services that includes all information
  necessary for the health maintenance organization to pay the claim;
  or
               (2)  the 45th day after the date the health maintenance
  organization receives a nonelectronic clean claim as defined by
  Section 843.336 for those services that includes all information
  necessary for the health maintenance organization to pay the claim.
         (c)  Except as provided by Subsection (d), a non-network
  diagnostic imaging provider or laboratory service provider or a
  person asserting a claim as an agent or assignee of the provider may
  not bill an enrollee receiving a health care service or supply
  described by Subsection (b) in, and the enrollee does not have
  financial responsibility for, an amount greater than an applicable
  copayment, coinsurance, and deductible under the enrollee's health
  care plan that:
               (1)  is based on:
                     (A)  the amount initially determined payable by
  the health maintenance organization; or
                     (B)  if applicable, a modified amount as
  determined under the health maintenance organization's internal
  appeal process; and
               (2)  is not based on any additional amount determined
  to be owed to the provider under Chapter 1467.
         (d)  This section does not apply to a nonemergency health
  care or medical service:
               (1)  that an enrollee elects to receive in writing in
  advance of the service with respect to each non-network physician
  or provider providing the service; and
               (2)  for which a non-network physician or provider,
  before providing the service, provides a complete written
  disclosure to the enrollee that:
                     (A)  explains that the physician or provider does
  not have a contract with the enrollee's health benefit plan;
                     (B)  discloses projected amounts for which the
  enrollee may be responsible; and
                     (C)  discloses the circumstances under which the
  enrollee would be responsible for those amounts.
         (e)  This section may not be construed to require the
  imposition of a penalty under Section 843.342.
         SECTION 1.05.  Section 1301.0045(b), Insurance Code, is
  amended to read as follows:
         (b)  Except as provided by Sections 1301.0052, 1301.0053,
  [and] 1301.155, 1301.164, and 1301.165, this chapter may not be
  construed to require an exclusive provider benefit plan to
  compensate a nonpreferred provider for services provided to an
  insured.
         SECTION 1.06.  Section 1301.0053, Insurance Code, is amended
  to read as follows:
         Sec. 1301.0053.  EXCLUSIVE PROVIDER BENEFIT PLANS:  
  EMERGENCY CARE. (a)  If an out-of-network [a nonpreferred]
  provider provides emergency care as defined by Section 1301.155 to
  an enrollee in an exclusive provider benefit plan, the issuer of the
  plan shall reimburse the out-of-network [nonpreferred] provider at
  the usual and customary rate or at a rate agreed to by the issuer and
  the out-of-network [nonpreferred] provider for the provision of the
  services and any supply related to those services.  The insurer
  shall make a payment required by this subsection directly to the
  provider not later than, as applicable:
               (1)  the 30th day after the date the insurer receives an
  electronic clean claim as defined by Section 1301.101 for those
  services that includes all information necessary for the insurer to
  pay the claim; or
               (2)  the 45th day after the date the insurer receives a
  nonelectronic clean claim as defined by Section 1301.101 for those
  services that includes all information necessary for the insurer to
  pay the claim.
         (b)  For emergency care subject to this section or a supply
  related to that care, an out-of-network provider or a person
  asserting a claim as an agent or assignee of the provider may not
  bill an insured in, and the insured does not have financial
  responsibility for, an amount greater than an applicable copayment,
  coinsurance, and deductible under the insured's exclusive provider
  benefit plan that:
               (1)  is based on:
                     (A)  the amount initially determined payable by
  the insurer; or
                     (B)  if applicable, a modified amount as
  determined under the insurer's internal appeal process; and
               (2)  is not based on any additional amount determined
  to be owed to the provider under Chapter 1467.
         (c)  This section may not be construed to require the
  imposition of a penalty under Section 1301.137.
         SECTION 1.07.  Subchapter A, Chapter 1301, Insurance Code,
  is amended by adding Section 1301.010 to read as follows:
         Sec. 1301.010.  BALANCE BILLING PROHIBITION NOTICE. (a)  An
  insurer shall provide written notice in accordance with this
  section in an explanation of benefits provided to the insured and
  the physician or health care provider in connection with a medical
  care or health care service or supply provided by an out-of-network
  provider.  The notice must include:
               (1)  a statement of the billing prohibition under
  Section 1301.0053, 1301.155, 1301.164, or 1301.165, as applicable;
               (2)  the total amount the physician or provider may
  bill the insured under the insured's preferred provider benefit
  plan and an itemization of copayments, coinsurance, deductibles,
  and other amounts included in that total; and
               (3)  for an explanation of benefits provided to the
  physician or provider, information required by commissioner rule
  advising the physician or provider of the availability of mediation
  or arbitration, as applicable, under Chapter 1467.
         (b)  An insurer shall provide the explanation of benefits
  with the notice required by this section to a physician or health
  care provider not later than the date the insurer makes a payment
  under Section 1301.0053, 1301.155, 1301.164, or 1301.165, as
  applicable.
         SECTION 1.08.  Section 1301.155, Insurance Code, is amended
  by amending Subsection (b) and adding Subsections (c), (d), and (e)
  to read as follows:
         (b)  If an insured cannot reasonably reach a preferred
  provider, an insurer shall provide reimbursement for the following
  emergency care services at the usual and customary rate or at an
  agreed rate and at the preferred level of benefits until the insured
  can reasonably be expected to transfer to a preferred provider:
               (1)  a medical screening examination or other
  evaluation required by state or federal law to be provided in the
  emergency facility of a hospital that is necessary to determine
  whether a medical emergency condition exists;
               (2)  necessary emergency care services, including the
  treatment and stabilization of an emergency medical condition;
  [and]
               (3)  services originating in a hospital emergency
  facility or freestanding emergency medical care facility following
  treatment or stabilization of an emergency medical condition; and
               (4)  supplies related to a service described by this
  subsection.
         (c)  For emergency care subject to this section or a supply
  related to that care, an insurer shall make a payment required by
  this section directly to the out-of-network provider not later
  than, as applicable:
               (1)  the 30th day after the date the insurer receives an
  electronic clean claim as defined by Section 1301.101 for those
  services that includes all information necessary for the insurer to
  pay the claim; or
               (2)  the 45th day after the date the insurer receives a
  nonelectronic clean claim as defined by Section 1301.101 for those
  services that includes all information necessary for the insurer to
  pay the claim.
         (d)  For emergency care subject to this section or a supply
  related to that care, an out-of-network provider or a person
  asserting a claim as an agent or assignee of the provider may not
  bill an insured in, and the insured does not have financial
  responsibility for, an amount greater than an applicable copayment,
  coinsurance, and deductible under the insured's preferred provider
  benefit plan that:
               (1)  is based on:
                     (A)  the amount initially determined payable by
  the insurer; or
                     (B)  if applicable, a modified amount as
  determined under the insurer's internal appeal process; and
               (2)  is not based on any additional amount determined
  to be owed to the provider under Chapter 1467.
         (e)  This section may not be construed to require the
  imposition of a penalty under Section 1301.137.
         SECTION 1.09.  Subchapter D, Chapter 1301, Insurance Code,
  is amended by adding Sections 1301.164 and 1301.165 to read as
  follows:
         Sec. 1301.164.  OUT-OF-NETWORK FACILITY-BASED PROVIDERS.
  (a)  In this section, "facility-based provider" means a physician
  or health care provider who provides medical care or health care
  services to patients of a health care facility.
         (b)  Except as provided by Subsection (d), an insurer shall
  pay for a covered medical care or health care service performed for
  or a covered supply related to that service provided to an insured
  by an out-of-network provider who is a facility-based provider at
  the usual and customary rate or at an agreed rate if the provider
  performed the service at a health care facility that is a preferred
  provider.  The insurer shall make a payment required by this
  subsection directly to the provider not later than, as applicable:
               (1)  the 30th day after the date the insurer receives an
  electronic clean claim as defined by Section 1301.101 for those
  services that includes all information necessary for the insurer to
  pay the claim; or
               (2)  the 45th day after the date the insurer receives a
  nonelectronic clean claim as defined by Section 1301.101 for those
  services that includes all information necessary for the insurer to
  pay the claim.
         (c)  Except as provided by Subsection (d), an out-of-network
  provider who is a facility-based provider or a person asserting a
  claim as an agent or assignee of the provider may not bill an
  insured receiving a medical care or health care service or supply
  described by Subsection (b) in, and the insured does not have
  financial responsibility for, an amount greater than an applicable
  copayment, coinsurance, and deductible under the insured's
  preferred provider benefit plan that:
               (1)  is based on:
                     (A)  the amount initially determined payable by
  the insurer; or
                     (B)  if applicable, a modified amount as
  determined under the insurer's internal appeal process; and
               (2)  is not based on any additional amount determined
  to be owed to the provider under Chapter 1467.
         (d)  This section does not apply to a nonemergency health
  care or medical service:
               (1)  that an insured elects to receive in writing in
  advance of the service with respect to each out-of-network provider
  providing the service; and
               (2)  for which an out-of-network provider, before
  providing the service, provides a complete written disclosure to
  the insured that:
                     (A)  explains that the provider does not have a
  contract with the insured's preferred provider benefit plan;
                     (B)  discloses projected amounts for which the
  insured may be responsible; and
                     (C)  discloses the circumstances under which the
  insured would be responsible for those amounts.
         (e)  This section may not be construed to require the
  imposition of a penalty under Section 1301.137.
         Sec. 1301.165.  OUT-OF-NETWORK DIAGNOSTIC IMAGING PROVIDER
  OR LABORATORY SERVICE PROVIDER. (a)  In this section, "diagnostic
  imaging provider" and "laboratory service provider" have the
  meanings assigned by Section 1467.001.
         (b)  Except as provided by Subsection (d), an insurer shall
  pay for a covered medical care or health care service performed by
  or a covered supply related to that service provided to an insured
  by an out-of-network provider who is a diagnostic imaging provider
  or laboratory service provider at the usual and customary rate or at
  an agreed rate if the provider performed the service in connection
  with a medical care or health care service performed by a preferred
  provider.  The insurer shall make a payment required by this
  subsection directly to the provider not later than, as applicable:
               (1)  the 30th day after the date the insurer receives an
  electronic clean claim as defined by Section 1301.101 for those
  services that includes all information necessary for the insurer to
  pay the claim; or
               (2)  the 45th day after the date the insurer receives a
  nonelectronic clean claim as defined by Section 1301.101 for those
  services that includes all information necessary for the insurer to
  pay the claim.
         (c)  Except as provided by Subsection (d), an out-of-network
  provider who is a diagnostic imaging provider or laboratory service
  provider or a person asserting a claim as an agent or assignee of
  the provider may not bill an insured receiving a medical care or
  health care service or supply described by Subsection (b) in, and
  the insured does not have financial responsibility for, an amount
  greater than an applicable copayment, coinsurance, and deductible
  under the insured's preferred provider benefit plan that:
               (1)  is based on:
                     (A)  the amount initially determined payable by
  the insurer; or
                     (B)  if applicable, the modified amount as
  determined under the insurer's internal appeal process; and
               (2)  is not based on any additional amount determined
  to be owed to the provider under Chapter 1467.
         (d)  This section does not apply to a nonemergency health
  care or medical service:
               (1)  that an insured elects to receive in writing in
  advance of the service with respect to each out-of-network provider
  providing the service; and
               (2)  for which an out-of-network provider, before
  providing the service, provides a complete written disclosure to
  the insured that:
                     (A)  explains that the provider does not have a
  contract with the insured's preferred provider benefit plan;
                     (B)  discloses projected amounts for which the
  insured may be responsible; and
                     (C)  discloses the circumstances under which the
  insured would be responsible for those amounts.
         (e)  This section may not be construed to require the
  imposition of a penalty under Section 1301.137.
         SECTION 1.10.  Section 1551.003, Insurance Code, is amended
  by adding Subdivision (15) to read as follows:
               (15)  "Usual and customary rate" means the relevant
  allowable amount as described by the applicable master benefit plan
  document or policy.
         SECTION 1.11.  Subchapter A, Chapter 1551, Insurance Code,
  is amended by adding Section 1551.015 to read as follows:
         Sec. 1551.015.  BALANCE BILLING PROHIBITION NOTICE.
  (a)  The administrator of a managed care plan provided under the
  group benefits program shall provide written notice in accordance
  with this section in an explanation of benefits provided to the
  participant and the physician or health care provider in connection
  with a health care or medical service or supply provided by an
  out-of-network provider.  The notice must include:
               (1)  a statement of the billing prohibition under
  Section 1551.228, 1551.229, or 1551.230, as applicable;
               (2)  the total amount the physician or provider may
  bill the participant under the participant's managed care plan and
  an itemization of copayments, coinsurance, deductibles, and other
  amounts included in that total; and
               (3)  for an explanation of benefits provided to the
  physician or provider, information required by commissioner rule
  advising the physician or provider of the availability of mediation
  or arbitration, as applicable, under Chapter 1467.
         (b)  The administrator shall provide the explanation of
  benefits with the notice required by this section to a physician or
  health care provider not later than the date the administrator
  makes a payment under Section 1551.228, 1551.229, or 1551.230, as
  applicable.
         SECTION 1.12.  Subchapter E, Chapter 1551, Insurance Code,
  is amended by adding Sections 1551.228, 1551.229, and 1551.230 to
  read as follows:
         Sec. 1551.228.  EMERGENCY CARE PAYMENTS. (a)  In this
  section, "emergency care" has the meaning assigned by Section
  1301.155.
         (b)  The administrator of a managed care plan provided under
  the group benefits program shall pay for covered emergency care
  performed by or a covered supply related to that care provided by an
  out-of-network provider at the usual and customary rate or at an
  agreed rate.  The administrator shall make a payment required by
  this subsection directly to the provider not later than, as
  applicable:
               (1)  the 30th day after the date the administrator
  receives an electronic claim for those services that includes all
  information necessary for the administrator to pay the claim; or
               (2)  the 45th day after the date the administrator
  receives a nonelectronic claim for those services that includes all
  information necessary for the administrator to pay the claim.
         (c)  For emergency care subject to this section or a supply
  related to that care, an out-of-network provider or a person
  asserting a claim as an agent or assignee of the provider may not
  bill a participant in, and the participant does not have financial
  responsibility for, an amount greater than an applicable copayment,
  coinsurance, and deductible under the participant's managed care
  plan that:
               (1)  is based on:
                     (A)  the amount initially determined payable by
  the administrator; or
                     (B)  if applicable, a modified amount as
  determined under the administrator's internal appeal process; and
               (2)  is not based on any additional amount determined
  to be owed to the provider under Chapter 1467.
         Sec. 1551.229.  OUT-OF-NETWORK FACILITY-BASED PROVIDER
  PAYMENTS. (a)  In this section, "facility-based provider" means a
  physician or health care provider who provides health care or
  medical services to patients of a health care facility.
         (b)  Except as provided by Subsection (d), the administrator
  of a managed care plan provided under the group benefits program
  shall pay for a covered health care or medical service performed for
  or a covered supply related to that service provided to a
  participant by an out-of-network provider who is a facility-based
  provider at the usual and customary rate or at an agreed rate if the
  provider performed the service at a health care facility that is a
  participating provider.  The administrator shall make a payment
  required by this subsection directly to the provider not later
  than, as applicable:
               (1)  the 30th day after the date the administrator
  receives an electronic claim for those services that includes all
  information necessary for the administrator to pay the claim; or
               (2)  the 45th day after the date the administrator
  receives a nonelectronic claim for those services that includes all
  information necessary for the administrator to pay the claim.
         (c)  Except as provided by Subsection (d), an out-of-network
  provider who is a facility-based provider or a person asserting a
  claim as an agent or assignee of the provider may not bill a
  participant receiving a health care or medical service or supply
  described by Subsection (b) in, and the participant does not have
  financial responsibility for, an amount greater than an applicable
  copayment, coinsurance, and deductible under the participant's
  managed care plan that:
               (1)  is based on:
                     (A)  the amount initially determined payable by
  the administrator; or
                     (B)  if applicable, a modified amount as
  determined under the administrator's internal appeal process; and
               (2)  is not based on any additional amount determined
  to be owed to the provider under Chapter 1467.
         (d)  This section does not apply to a nonemergency health
  care or medical service:
               (1)  that a participant elects to receive in writing in
  advance of the service with respect to each out-of-network provider
  providing the service; and
               (2)  for which an out-of-network provider, before
  providing the service, provides a complete written disclosure to
  the participant that:
                     (A)  explains that the provider does not have a
  contract with the participant's managed care plan;
                     (B)  discloses projected amounts for which the
  participant may be responsible; and
                     (C)  discloses the circumstances under which the
  participant would be responsible for those amounts.
         Sec. 1551.230.  OUT-OF-NETWORK DIAGNOSTIC IMAGING PROVIDER
  OR LABORATORY SERVICE PROVIDER PAYMENTS. (a)  In this section,
  "diagnostic imaging provider" and "laboratory service provider"
  have the meanings assigned by Section 1467.001.
         (b)  Except as provided by Subsection (d), the administrator
  of a managed care plan provided under the group benefits program
  shall pay for a covered health care or medical service performed for
  or a covered supply related to that service provided to a
  participant by an out-of-network provider who is a diagnostic
  imaging provider or laboratory service provider at the usual and
  customary rate or at an agreed rate if the provider performed the
  service in connection with a health care or medical service
  performed by a participating provider.  The administrator shall
  make a payment required by this subsection directly to the provider
  not later than, as applicable:
               (1)  the 30th day after the date the administrator
  receives an electronic claim for those services that includes all
  information necessary for the administrator to pay the claim; or
               (2)  the 45th day after the date the administrator
  receives a nonelectronic claim for those services that includes all
  information necessary for the administrator to pay the claim.
         (c)  Except as provided by Subsection (d), an out-of-network
  provider who is a diagnostic imaging provider or laboratory service
  provider or a person asserting a claim as an agent or assignee of
  the provider may not bill a participant receiving a health care or
  medical service or supply described by Subsection (b) in, and the
  participant does not have financial responsibility for, an amount
  greater than an applicable copayment, coinsurance, and deductible
  under the participant's managed care plan that:
               (1)  is based on:
                     (A)  the amount initially determined payable by
  the administrator; or
                     (B)  if applicable, the modified amount as
  determined under the administrator's internal appeal process; and
               (2)  is not based on any additional amount determined
  to be owed to the provider under Chapter 1467.
         (d)  This section does not apply to a nonemergency health
  care or medical service:
               (1)  that a participant elects to receive in writing in
  advance of the service with respect to each out-of-network provider
  providing the service; and
               (2)  for which an out-of-network provider, before
  providing the service, provides a complete written disclosure to
  the participant that:
                     (A)  explains that the provider does not have a
  contract with the participant's managed care plan;
                     (B)  discloses projected amounts for which the
  participant may be responsible; and
                     (C)  discloses the circumstances under which the
  participant would be responsible for those amounts.
         SECTION 1.13.  Section 1575.002, Insurance Code, is amended
  by adding Subdivision (8) to read as follows:
               (8)  "Usual and customary rate" means the relevant
  allowable amount as described by the applicable master benefit plan
  document or policy.
         SECTION 1.14.  Subchapter A, Chapter 1575, Insurance Code,
  is amended by adding Section 1575.009 to read as follows:
         Sec. 1575.009.  BALANCE BILLING PROHIBITION NOTICE.
  (a)  The administrator of a managed care plan provided under the
  group program shall provide written notice in accordance with this
  section in an explanation of benefits provided to the enrollee and
  the physician or health care provider in connection with a health
  care or medical service or supply provided by an out-of-network
  provider.  The notice must include:
               (1)  a statement of the billing prohibition under
  Section 1575.171, 1575.172, or 1575.173, as applicable;
               (2)  the total amount the physician or provider may
  bill the enrollee under the enrollee's managed care plan and an
  itemization of copayments, coinsurance, deductibles, and other
  amounts included in that total; and
               (3)  for an explanation of benefits provided to the
  physician or provider, information required by commissioner rule
  advising the physician or provider of the availability of mediation
  or arbitration, as applicable, under Chapter 1467.
         (b)  The administrator shall provide the explanation of
  benefits with the notice required by this section to a physician or
  health care provider not later than the date the administrator
  makes a payment under Section 1575.171, 1575.172, or 1575.173, as
  applicable.
         SECTION 1.15.  Subchapter D, Chapter 1575, Insurance Code,
  is amended by adding Sections 1575.171, 1575.172, and 1575.173 to
  read as follows:
         Sec. 1575.171.  EMERGENCY CARE PAYMENTS. (a)  In this
  section, "emergency care" has the meaning assigned by Section
  1301.155.
         (b)  The administrator of a managed care plan provided under
  the group program shall pay for covered emergency care performed by
  or a covered supply related to that care provided by an
  out-of-network provider at the usual and customary rate or at an
  agreed rate.  The administrator shall make a payment required by
  this subsection directly to the provider not later than, as
  applicable:
               (1)  the 30th day after the date the administrator
  receives an electronic claim for those services that includes all
  information necessary for the administrator to pay the claim; or
               (2)  the 45th day after the date the administrator
  receives a nonelectronic claim for those services that includes all
  information necessary for the administrator to pay the claim.
         (c)  For emergency care subject to this section or a supply
  related to that care, an out-of-network provider or a person
  asserting a claim as an agent or assignee of the provider may not
  bill an enrollee in, and the enrollee does not have financial
  responsibility for, an amount greater than an applicable copayment,
  coinsurance, and deductible under the enrollee's managed care plan
  that:
               (1)  is based on:
                     (A)  the amount initially determined payable by
  the administrator; or
                     (B)  if applicable, a modified amount as
  determined under the administrator's internal appeal process; and
               (2)  is not based on any additional amount determined
  to be owed to the provider under Chapter 1467.
         Sec. 1575.172.  OUT-OF-NETWORK FACILITY-BASED PROVIDER
  PAYMENTS. (a)  In this section, "facility-based provider" means a
  physician or health care provider who provides health care or
  medical services to patients of a health care facility.
         (b)  Except as provided by Subsection (d), the administrator
  of a managed care plan provided under the group program shall pay
  for a covered health care or medical service performed for or a
  covered supply related to that service provided to an enrollee by an
  out-of-network provider who is a facility-based provider at the
  usual and customary rate or at an agreed rate if the provider
  performed the service at a health care facility that is a
  participating provider.  The administrator shall make a payment
  required by this subsection directly to the provider not later
  than, as applicable:
               (1)  the 30th day after the date the administrator
  receives an electronic claim for those services that includes all
  information necessary for the administrator to pay the claim; or
               (2)  the 45th day after the date the administrator
  receives a nonelectronic claim for those services that includes all
  information necessary for the administrator to pay the claim.
         (c)  Except as provided by Subsection (d), an out-of-network
  provider who is a facility-based provider or a person asserting a
  claim as an agent or assignee of the provider may not bill an
  enrollee receiving a health care or medical service or supply
  described by Subsection (b) in, and the enrollee does not have
  financial responsibility for, an amount greater than an applicable
  copayment, coinsurance, and deductible under the enrollee's
  managed care plan that:
               (1)  is based on:
                     (A)  the amount initially determined payable by
  the administrator; or
                     (B)  if applicable, a modified amount as
  determined under the administrator's internal appeal process; and
               (2)  is not based on any additional amount determined
  to be owed to the provider under Chapter 1467.
         (d)  This section does not apply to a nonemergency health
  care or medical service:
               (1)  that an enrollee elects to receive in writing in
  advance of the service with respect to each out-of-network provider
  providing the service; and
               (2)  for which an out-of-network provider, before
  providing the service, provides a complete written disclosure to
  the enrollee that:
                     (A)  explains that the provider does not have a
  contract with the enrollee's managed care plan;
                     (B)  discloses projected amounts for which the
  enrollee may be responsible; and
                     (C)  discloses the circumstances under which the
  enrollee would be responsible for those amounts.
         Sec. 1575.173.  OUT-OF-NETWORK DIAGNOSTIC IMAGING PROVIDER
  OR LABORATORY SERVICE PROVIDER PAYMENTS.  (a)  In this section,
  "diagnostic imaging provider" and "laboratory service provider"
  have the meanings assigned by Section 1467.001.
         (b)  Except as provided by Subsection (d), the administrator
  of a managed care plan provided under the group program shall pay
  for a covered health care or medical service performed for or a
  covered supply related to that service provided to an enrollee by an
  out-of-network provider who is a diagnostic imaging provider or
  laboratory service provider at the usual and customary rate or at an
  agreed rate if the provider performed the service in connection
  with a health care or medical service performed by a participating
  provider.  The administrator shall make a payment required by this
  subsection directly to the provider not later than, as applicable:
               (1)  the 30th day after the date the administrator
  receives an electronic claim for those services that includes all
  information necessary for the administrator to pay the claim; or
               (2)  the 45th day after the date the administrator
  receives a nonelectronic claim for those services that includes all
  information necessary for the administrator to pay the claim.
         (c)  Except as provided by Subsection (d), an out-of-network
  provider who is a diagnostic imaging provider or laboratory service
  provider or a person asserting a claim as an agent or assignee of
  the provider may not bill an enrollee receiving a health care or
  medical service or supply described by Subsection (b) in, and the
  enrollee does not have financial responsibility for, an amount
  greater than an applicable copayment, coinsurance, and deductible
  under the enrollee's managed care plan that:
               (1)  is based on:
                     (A)  the amount initially determined payable by
  the administrator; or
                     (B)  if applicable, the modified amount as
  determined under the administrator's internal appeal process; and
               (2)  is not based on any additional amount determined
  to be owed to the provider under Chapter 1467.
         (d)  This section does not apply to a nonemergency health
  care or medical service:
               (1)  that an enrollee elects to receive in writing in
  advance of the service with respect to each out-of-network provider
  providing the service; and
               (2)  for which an out-of-network provider, before
  providing the service, provides a complete written disclosure to
  the enrollee that:
                     (A)  explains that the provider does not have a
  contract with the enrollee's managed care plan;
                     (B)  discloses projected amounts for which the
  enrollee may be responsible; and
                     (C)  discloses the circumstances under which the
  enrollee would be responsible for those amounts.
         SECTION 1.16.  Section 1579.002, Insurance Code, is amended
  by adding Subdivision (8) to read as follows:
               (8)  "Usual and customary rate" means the relevant
  allowable amount as described by the applicable master benefit plan
  document or policy.
         SECTION 1.17.  Subchapter A, Chapter 1579, Insurance Code,
  is amended by adding Section 1579.009 to read as follows:
         Sec. 1579.009.  BALANCE BILLING PROHIBITION NOTICE.
  (a)  The administrator of a managed care plan provided under this
  chapter shall provide written notice in accordance with this
  section in an explanation of benefits provided to the enrollee and
  the physician or health care provider in connection with a health
  care or medical service or supply provided by an out-of-network
  provider.  The notice must include:
               (1)  a statement of the billing prohibition under
  Section 1579.109, 1579.110, or 1579.111, as applicable;
               (2)  the total amount the physician or provider may
  bill the enrollee under the enrollee's managed care plan and an
  itemization of copayments, coinsurance, deductibles, and other
  amounts included in that total; and
               (3)  for an explanation of benefits provided to the
  physician or provider, information required by commissioner rule
  advising the physician or provider of the availability of mediation
  or arbitration, as applicable, under Chapter 1467.
         (b)  The administrator shall provide the explanation of
  benefits with the notice required by this section to a physician or
  health care provider not later than the date the administrator
  makes a payment under Section 1579.109, 1579.110, or 1579.111, as
  applicable.
         SECTION 1.18.  Subchapter C, Chapter 1579, Insurance Code,
  is amended by adding Sections 1579.109, 1579.110, and 1579.111 to
  read as follows:
         Sec. 1579.109.  EMERGENCY CARE PAYMENTS. (a)  In this
  section, "emergency care" has the meaning assigned by Section
  1301.155.
         (b)  The administrator of a managed care plan provided under
  this chapter shall pay for covered emergency care performed by or a
  covered supply related to that care provided by an out-of-network
  provider at the usual and customary rate or at an agreed rate.  The
  administrator shall make a payment required by this subsection
  directly to the provider not later than, as applicable:
               (1)  the 30th day after the date the administrator
  receives an electronic claim for those services that includes all
  information necessary for the administrator to pay the claim; or
               (2)  the 45th day after the date the administrator
  receives a nonelectronic claim for those services that includes all
  information necessary for the administrator to pay the claim.
         (c)  For emergency care subject to this section or a supply
  related to that care, an out-of-network provider or a person
  asserting a claim as an agent or assignee of the provider may not
  bill an enrollee in, and the enrollee does not have financial
  responsibility for, an amount greater than an applicable copayment,
  coinsurance, and deductible under the enrollee's managed care plan
  that:
               (1)  is based on:
                     (A)  the amount initially determined payable by
  the administrator; or
                     (B)  if applicable, a modified amount as
  determined under the administrator's internal appeal process; and
               (2)  is not based on any additional amount determined
  to be owed to the provider under Chapter 1467.
         Sec. 1579.110.  OUT-OF-NETWORK FACILITY-BASED PROVIDER
  PAYMENTS. (a)  In this section, "facility-based provider" means a
  physician or health care provider who provides health care or
  medical services to patients of a health care facility.
         (b)  Except as provided by Subsection (d), the administrator
  of a managed care plan provided under this chapter shall pay for a
  covered health care or medical service performed for or a covered
  supply related to that service provided to an enrollee by an
  out-of-network provider who is a facility-based provider at the
  usual and customary rate or at an agreed rate if the provider
  performed the service at a health care facility that is a
  participating provider.  The administrator shall make a payment
  required by this subsection directly to the provider not later
  than, as applicable:
               (1)  the 30th day after the date the administrator
  receives an electronic claim for those services that includes all
  information necessary for the administrator to pay the claim; or
               (2)  the 45th day after the date the administrator
  receives a nonelectronic claim for those services that includes all
  information necessary for the administrator to pay the claim.
         (c)  Except as provided by Subsection (d), an out-of-network
  provider who is a facility-based provider or a person asserting a
  claim as an agent or assignee of the provider may not bill an
  enrollee receiving a health care or medical service or supply
  described by Subsection (b) in, and the enrollee does not have
  financial responsibility for, an amount greater than an applicable
  copayment, coinsurance, and deductible under the enrollee's
  managed care plan that:
               (1)  is based on:
                     (A)  the amount initially determined payable by
  the administrator; or
                     (B)  if applicable, a modified amount as
  determined under the administrator's internal appeal process; and
               (2)  is not based on any additional amount determined
  to be owed to the provider under Chapter 1467.
         (d)  This section does not apply to a nonemergency health
  care or medical service:
               (1)  that an enrollee elects to receive in writing in
  advance of the service with respect to each out-of-network provider
  providing the service; and
               (2)  for which an out-of-network provider, before
  providing the service, provides a complete written disclosure to
  the enrollee that:
                     (A)  explains that the provider does not have a
  contract with the enrollee's managed care plan;
                     (B)  discloses projected amounts for which the
  enrollee may be responsible; and
                     (C)  discloses the circumstances under which the
  enrollee would be responsible for those amounts.
         Sec. 1579.111.  OUT-OF-NETWORK DIAGNOSTIC IMAGING PROVIDER
  OR LABORATORY SERVICE PROVIDER PAYMENTS.  (a)  In this section,
  "diagnostic imaging provider" and "laboratory service provider"
  have the meanings assigned by Section 1467.001.
         (b)  Except as provided by Subsection (d), the administrator
  of a managed care plan provided under this chapter shall pay for a
  covered health care or medical service performed for or a covered
  supply related to that service provided to an enrollee by an
  out-of-network provider who is a diagnostic imaging provider or
  laboratory service provider at the usual and customary rate or at an
  agreed rate if the provider performed the service in connection
  with a health care or medical service performed by a participating
  provider.  The administrator shall make a payment required by this
  subsection directly to the provider not later than, as applicable:
               (1)  the 30th day after the date the administrator
  receives an electronic claim for those services that includes all
  information necessary for the administrator to pay the claim; or
               (2)  the 45th day after the date the administrator
  receives a nonelectronic claim for those services that includes all
  information necessary for the administrator to pay the claim.
         (c)  Except as provided by Subsection (d), an out-of-network
  provider who is a diagnostic imaging provider or laboratory service
  provider or a person asserting a claim as an agent or assignee of
  the provider may not bill an enrollee receiving a health care or
  medical service or supply described by Subsection (b) in, and the
  enrollee does not have financial responsibility for, an amount
  greater than an applicable copayment, coinsurance, and deductible
  under the enrollee's managed care plan that:
               (1)  is based on:
                     (A)  the amount initially determined payable by
  the administrator; or
                     (B)  if applicable, a modified amount as
  determined under the administrator's internal appeal process; and
               (2)  is not based on any additional amount determined
  to be owed to the provider under Chapter 1467.
         (d)  This section does not apply to a nonemergency health
  care or medical service:
               (1)  that an enrollee elects to receive in writing in
  advance of the service with respect to each out-of-network provider
  providing the service; and
               (2)  for which an out-of-network provider, before
  providing the service, provides a complete written disclosure to
  the enrollee that:
                     (A)  explains that the provider does not have a
  contract with the enrollee's managed care plan;
                     (B)  discloses projected amounts for which the
  enrollee may be responsible; and
                     (C)  discloses the circumstances under which the
  enrollee would be responsible for those amounts.
  ARTICLE 2. OUT-OF-NETWORK CLAIM DISPUTE RESOLUTION
         SECTION 2.01.  Section 1467.001, Insurance Code, is amended
  by adding Subdivisions (1-a), (2-c), (2-d), (4-b), and (6-a) and
  amending Subdivisions (2-a), (2-b), (3), (5), and (7) to read as
  follows:
               (1-a)  "Arbitration" means a process in which an
  impartial arbiter issues a binding determination in a dispute
  between a health benefit plan issuer or administrator and an
  out-of-network provider or the provider's representative to settle
  a health benefit claim.
               (2-a)  "Diagnostic imaging provider" means a health
  care provider who performs a diagnostic imaging service on a
  patient for a fee or interprets imaging produced by a diagnostic
  imaging service.
               (2-b)  "Diagnostic imaging service" means magnetic
  resonance imaging, computed tomography, positron emission
  tomography, or any hybrid technology that combines any of those
  imaging modalities.
               (2-c)  "Emergency care" has the meaning assigned by
  Section 1301.155.
               (2-d) [(2-b)]  "Emergency care provider" means a
  physician, health care practitioner, facility, or other health care
  provider who provides and bills an enrollee, administrator, or
  health benefit plan for emergency care.
               (3)  "Enrollee" means an individual who is eligible to
  receive benefits through a [preferred provider benefit plan or a]
  health benefit plan subject to this chapter [under Chapter 1551,
  1575, or 1579].
               (4-b)  "Laboratory service provider" means an
  accredited facility in which a specimen taken from a human body is
  interpreted and pathological diagnoses are made or a physician who
  makes an interpretation of or diagnosis based on a specimen or
  information provided by a laboratory based on a specimen.
               (5)  "Mediation" means a process in which an impartial
  mediator facilitates and promotes agreement between the health
  [insurer offering a preferred provider] benefit plan issuer or the
  administrator and an out-of-network [a facility-based] provider
  [or emergency care provider] or the provider's representative to
  settle a health benefit claim of an enrollee.
               (6-a)  "Out-of-network provider" means a diagnostic
  imaging provider, emergency care provider, facility-based
  provider, or laboratory service provider that is not a
  participating provider for a health benefit plan.
               (7)  "Party" means a health benefit plan issuer [an
  insurer] offering a health [a preferred provider] benefit plan, an
  administrator, or an out-of-network [a facility-based provider or
  emergency care] provider or the provider's representative who
  participates in a mediation or arbitration conducted under this
  chapter. [The enrollee is also considered a party to the
  mediation.]
         SECTION 2.02.  Sections 1467.002, 1467.003, and 1467.005,
  Insurance Code, are amended to read as follows:
         Sec. 1467.002.  APPLICABILITY OF CHAPTER.  This chapter
  applies to:
               (1)  a health benefit plan offered by a health
  maintenance organization operating under Chapter 843;
               (2)  a preferred provider benefit plan, including an
  exclusive provider benefit plan, offered by an insurer under
  Chapter 1301; and
               (3) [(2)]  an administrator of a health benefit plan,
  other than a health maintenance organization plan, under Chapter
  1551, 1575, or 1579.
         Sec. 1467.003.  RULES.  (a)  The commissioner, the Texas
  Medical Board, and any other appropriate regulatory agency[, and
  the chief administrative law judge] shall adopt rules as necessary
  to implement their respective powers and duties under this chapter.
         (b)  Section 2001.0045, Government Code, does not apply to a
  rule adopted under this chapter.
         Sec. 1467.005.  REFORM. This chapter may not be construed to
  prohibit:
               (1)  a health [an insurer offering a preferred
  provider] benefit plan issuer or administrator from, at any time,
  offering a reformed claim settlement; or
               (2)  an out-of-network [a facility-based provider or
  emergency care] provider from, at any time, offering a reformed
  charge for health care or medical services or supplies.
         SECTION 2.03.  Subchapter A, Chapter 1467, Insurance Code,
  is amended by adding Section 1467.006 to read as follows:
         Sec. 1467.006.  BENCHMARKING DATABASE. (a)  In this
  section, "geozip area" means an area that includes all zip codes
  with identical first three digits. For purposes of this section, a
  health care or medical service or supply provided at a location that
  does not have a zip code is considered to be provided in the geozip
  area closest to the location at which the service or supply is
  provided.
         (b)  The commissioner shall select an organization to
  maintain a benchmarking database in accordance with this section.  
  The organization may not:
               (1)  be affiliated with a health benefit plan issuer or
  administrator or a physician, health care practitioner, or other
  health care provider; or
               (2)  have any other conflict of interest.
         (c)  The benchmarking database must contain information
  necessary to calculate, with respect to a health care or medical
  service or supply, for each geozip area in this state:
               (1)  the 80th percentile of billed charges of all
  physicians or health care providers who are not facilities; and
               (2)  the 50th percentile of rates paid to participating
  providers who are not facilities.
         (d)  The commissioner may adopt rules governing the
  submission of information for the benchmarking database described
  by Subsection (c).
         SECTION 2.04.  The heading to Subchapter B, Chapter 1467,
  Insurance Code, is amended to read as follows:
  SUBCHAPTER B.  MANDATORY MEDIATION FOR OUT-OF-NETWORK FACILITIES
         SECTION 2.05.  Subchapter B, Chapter 1467, Insurance Code,
  is amended by adding Sections 1467.050 and 1467.0505 to read as
  follows:
         Sec. 1467.050.  APPLICABILITY OF SUBCHAPTER. (a)  This
  subchapter applies only with respect to a health benefit claim
  submitted by an out-of-network provider that is a facility.
         (b)  This subchapter does not apply to a health benefit claim
  for the professional or technical component of a physician service.
         Sec. 1467.0505.  ESTABLISHMENT AND ADMINISTRATION OF
  MEDIATION PROGRAM. (a)  The commissioner shall establish and
  administer a mediation program to resolve disputes over
  out-of-network provider charges in accordance with this
  subchapter.
         (b)  The commissioner:
               (1)  shall adopt rules, forms, and procedures necessary
  for the implementation and administration of the mediation program,
  including the establishment of a portal on the department's
  Internet website through which a request for mediation under
  Section 1467.051 may be submitted; and
               (2)  shall maintain a list of qualified mediators for
  the program.
         SECTION 2.06.  The heading to Section 1467.051, Insurance
  Code, is amended to read as follows:
         Sec. 1467.051.  AVAILABILITY OF MANDATORY MEDIATION[;
  EXCEPTION].
         SECTION 2.07.  Sections 1467.051(a) and (b), Insurance Code,
  are amended to read as follows:
         (a)  An out-of-network provider or a health benefit plan
  issuer or administrator [An enrollee] may request mediation of a
  settlement of an out-of-network health benefit claim through a
  portal on the department's Internet website if:
               (1)  there is an [the] amount billed by the provider and
  unpaid by the issuer or administrator [for which the enrollee is
  responsible to a facility-based provider or emergency care
  provider,] after copayments, deductibles, and coinsurance for
  which an enrollee may not be billed [, including the amount unpaid
  by the administrator or insurer, is greater than $500]; and
               (2)  the health benefit claim is for:
                     (A)  emergency care; [or]
                     (B)  an out-of-network laboratory service; or
                     (C)  an out-of-network diagnostic imaging service 
  [a health care or medical service or supply provided by a
  facility-based provider in a facility that is a preferred provider
  or that has a contract with the administrator].
         (b)  If a person [Except as provided by Subsections (c) and
  (d), if an enrollee] requests  mediation under this subchapter, the
  out-of-network [facility-based] provider [or emergency care
  provider,] or the provider's representative, and the health benefit
  plan issuer [insurer] or the administrator, as appropriate, shall
  participate in the mediation.
         SECTION 2.08.  Section 1467.052, Insurance Code, is amended
  by amending Subsections (a) and (c) and adding Subsection (d) to
  read as follows:
         (a)  Except as provided by Subsection (b), to qualify for an
  appointment as a mediator under this subchapter [chapter] a person
  must have completed at least 40 classroom hours of training in
  dispute resolution techniques in a course conducted by an
  alternative dispute resolution organization or other dispute
  resolution organization approved by the commissioner [chief
  administrative law judge].
         (c)  A person may not act as mediator for a claim settlement
  dispute if the person has been employed by, consulted for, or
  otherwise had a business relationship with a health [an insurer
  offering the preferred provider] benefit plan issuer or
  administrator or a physician, health care practitioner, or other
  health care provider during the three years immediately preceding
  the request for mediation.
         (d)  The commissioner shall immediately terminate the
  approval of a mediator who no longer meets the requirements under
  this subchapter and rules adopted under this subchapter to serve as
  a mediator.
         SECTION 2.09.  Section 1467.053, Insurance Code, is amended
  by adding Subsection (b-1) and amending Subsection (d) to read as
  follows:
         (b-1)  If the parties do not select a mediator by mutual
  agreement on or before the 30th day after the date the mediation is
  requested, the party requesting the mediation shall notify the
  commissioner, and the commissioner shall select a mediator from the
  commissioner's list of approved mediators.
         (d)  The mediator's fees shall be split evenly and paid by
  the health benefit plan issuer [insurer] or administrator and the
  out-of-network [facility-based provider or emergency care]
  provider.
         SECTION 2.10.  Section 1467.054, Insurance Code, is amended
  by amending Subsections (a) and (d) and adding Subsection (b-1) to
  read as follows:
         (a)  An out-of-network provider or a health benefit plan
  issuer or administrator [enrollee] may request mandatory mediation
  under this subchapter [chapter].
         (b-1)  The person who requests the mediation shall provide
  written notice on the date the mediation is requested in the form
  and manner provided by commissioner rule to:
               (1)  the department; and
               (2)  each other party.
         (d)  In an effort to settle the claim before mediation, all
  parties must participate in an informal settlement teleconference
  not later than the 30th day after the date on which a person [the
  enrollee] submits a request for mediation under this subchapter
  [section].
         SECTION 2.11.  Section 1467.055, Insurance Code, is amended
  by adding Subsections (c-1) and (k) and amending Subsections (g)
  and (i) to read as follows:
         (c-1)  Information submitted by the parties to the mediator
  is confidential and not subject to disclosure under Chapter 552,
  Government Code.
         (g)  A [Except at the request of an enrollee, a] mediation
  shall be held not later than the 180th day after the date of the
  request for mediation.
         (i)  A health care or medical service or supply provided by
  an out-of-network [a facility-based] provider [or emergency care
  provider] may not be summarily disallowed.  This subsection does
  not require a health benefit plan issuer [an insurer] or
  administrator to pay for an uncovered service or supply.
         (k)  On agreement of all parties, any deadline under this
  subchapter may be extended.
         SECTION 2.12.  Sections 1467.056(a), (b), and (d), Insurance
  Code, are amended to read as follows:
         (a)  In a mediation under this subchapter [chapter], the
  parties shall[:
               [(1)] evaluate whether:
               (1) [(A)]  the amount charged by the out-of-network
  [facility-based] provider [or emergency care provider] for the
  health care or medical service or supply is excessive; and
               (2) [(B)]  the amount paid by the health benefit plan
  issuer [insurer] or administrator represents the usual and
  customary rate for the health care or medical service or supply or
  is unreasonably low[; and
               [(2)     as a result of the amounts described by
  Subdivision (1), determine the amount, after copayments,
  deductibles, and coinsurance are applied, for which an enrollee is
  responsible to the facility-based provider or emergency care
  provider].
         (b)  The out-of-network [facility-based] provider [or
  emergency care provider] may present information regarding the
  amount charged for the health care or medical service or supply.  
  The health benefit plan issuer [insurer] or administrator may
  present information regarding the amount paid by the issuer
  [insurer] or administrator.
         (d)  The goal of the mediation is to reach an agreement
  between [among the enrollee,] the out-of-network [facility-based]
  provider [or emergency care provider,] and the health benefit plan
  issuer [insurer] or administrator, as applicable, as to the amount
  paid by the issuer [insurer] or administrator to the out-of-network
  [facility-based] provider and [or emergency care provider,] the
  amount charged by the out-of-network [facility-based] provider [or
  emergency care provider, and the amount paid to the facility-based
  provider or emergency care provider by the enrollee].
         SECTION 2.13.  Subchapter B, Chapter 1467, Insurance Code,
  is amended by adding Section 1467.0575 to read as follows:
         Sec. 1467.0575.  RIGHT TO FILE ACTION. Not later than the
  45th day after the date that the mediator's report is provided to
  the department under Section 1467.060, either party to a mediation
  for which there was no agreement may file a civil action to
  determine the amount due to an out-of-network provider.  A party may
  not bring a civil action before the conclusion of the mediation
  process under this subchapter.
         SECTION 2.14.  Section 1467.060, Insurance Code, is amended
  to read as follows:
         Sec. 1467.060.  REPORT OF MEDIATOR.  Not later than the 45th
  day after the date the mediation concludes, the [The] mediator
  shall report to the commissioner and the Texas Medical Board or
  other appropriate regulatory agency:
               (1)  the names of the parties to the mediation; and
               (2)  whether the parties reached an agreement [or the
  mediator made a referral under Section 1467.057].
         SECTION 2.15.  Chapter 1467, Insurance Code, is amended by
  adding Subchapter B-1 to read as follows:
  SUBCHAPTER B-1.  MANDATORY BINDING ARBITRATION FOR OTHER PROVIDERS
         Sec. 1467.081.  APPLICABILITY OF SUBCHAPTER. This
  subchapter applies only with respect to a health benefit claim
  submitted by an out-of-network provider who is not a facility.
         Sec. 1467.082.  ESTABLISHMENT AND ADMINISTRATION OF
  ARBITRATION PROGRAM. (a)  The commissioner shall establish and
  administer an arbitration program to resolve disputes over
  out-of-network provider charges in accordance with this
  subchapter.
         (b)  The commissioner:
               (1)  shall adopt rules, forms, and procedures necessary
  for the implementation and administration of the arbitration
  program, including the establishment of a portal on the
  department's Internet website through which a request for
  arbitration under Section 1467.084 may be submitted; and
               (2)  shall maintain a list of qualified arbitrators for
  the program.
         Sec. 1467.083.  ISSUE TO BE ADDRESSED; BASIS FOR
  DETERMINATION. (a)  The only issue that an arbitrator may
  determine under this subchapter is the reasonable amount for the
  health care or medical services or supplies provided to the
  enrollee by an out-of-network provider.
         (b)  The determination must take into account:
               (1)  whether there is a gross disparity between the fee
  billed by the out-of-network provider and:
                     (A)  fees paid to the out-of-network provider for
  the same services or supplies rendered by the provider to other
  enrollees for which the provider is an out-of-network provider; and
                     (B)  fees paid by the health benefit plan issuer
  to reimburse similarly qualified out-of-network providers for the
  same services or supplies in the same region;
               (2)  the level of training, education, and experience
  of the out-of-network provider;
               (3)  the out-of-network provider's usual billed charge
  for comparable services or supplies with regard to other enrollees
  for which the provider is an out-of-network provider;
               (4)  the circumstances and complexity of the enrollee's
  particular case, including the time and place of the provision of
  the service or supply;
               (5)  individual enrollee characteristics;
               (6)  the 80th percentile of all billed charges for the
  service or supply performed by a health care provider in the same or
  similar specialty and provided in the same geozip area as reported
  in a benchmarking database described by Section 1467.006;
               (7)  the 50th percentile of rates for the service or
  supply paid to participating providers in the same or similar
  specialty and provided in the same geozip area as reported in a
  benchmarking database described by Section 1467.006;
               (8)  the history of network contracting between the
  parties;
               (9)  historical data for the percentiles described by
  Subdivisions (6) and (7); and
               (10)  an offer made during the informal settlement
  teleconference required under Section 1467.084(d).
         Sec. 1467.084.  AVAILABILITY OF MANDATORY ARBITRATION.
  (a)  Not later than the 90th day after the date an out-of-network
  provider receives the initial payment for a health care or medical
  service or supply, the out-of-network provider or the health
  benefit plan issuer or administrator may request arbitration of a
  settlement of an out-of-network health benefit claim through a
  portal on the department's Internet website if:
               (1)  there is a charge billed by the provider and unpaid
  by the issuer or administrator after copayments, coinsurance, and
  deductibles for which an enrollee may not be billed; and
               (2)  the health benefit claim is for:
                     (A)  emergency care;
                     (B)  a health care or medical service or supply
  provided by a facility-based provider in a facility that is a
  participating provider;
                     (C)  an out-of-network laboratory service; or
                     (D)  an out-of-network diagnostic imaging
  service.
         (b)  If a person requests arbitration under this subchapter,
  the out-of-network provider or the provider's representative, and
  the health benefit plan issuer or the administrator, as
  appropriate, shall participate in the arbitration.
         (c)  The person who requests the arbitration shall provide
  written notice on the date the arbitration is requested in the form
  and manner prescribed by commissioner rule to:
               (1)  the department; and
               (2)  each other party.
         (d)  In an effort to settle the claim before arbitration, all
  parties must participate in an informal settlement teleconference
  not later than the 30th day after the date on which the arbitration
  is requested.  A health benefit plan issuer or administrator, as
  applicable, shall make a reasonable effort to arrange the
  teleconference.
         (e)  The commissioner shall adopt rules providing
  requirements for submitting multiple claims to arbitration in one
  proceeding.  The rules must provide that:
               (1)  the total amount in controversy for multiple
  claims in one proceeding may not exceed $5,000; and
               (2)  the multiple claims in one proceeding must be
  limited to the same out-of-network provider.
         Sec. 1467.085.  EFFECT OF ARBITRATION AND APPLICABILITY OF
  OTHER LAW. (a)  Notwithstanding Section 1467.004, an
  out-of-network provider or health benefit plan issuer or
  administrator may not file suit for an out-of-network claim subject
  to this chapter until the conclusion of the arbitration on the issue
  of the amount to be paid in the out-of-network claim dispute.
         (b)  An arbitration conducted under this subchapter is not
  subject to Title 7, Civil Practice and Remedies Code.
         Sec. 1467.086.  SELECTION AND APPROVAL OF ARBITRATOR.
  (a)  If the parties do not select an arbitrator by mutual agreement
  on or before the 30th day after the date the arbitration is
  requested, the party requesting the arbitration shall notify the
  commissioner, and the commissioner shall select an arbitrator from
  the commissioner's list of approved arbitrators.
         (b)  In selecting an arbitrator under this section, the
  commissioner shall give preference to an arbitrator who is
  knowledgeable and experienced in applicable principles of contract
  and insurance law and the health care industry generally.
         (c)  In approving an individual as an arbitrator, the
  commissioner shall ensure that the individual does not have a
  conflict of interest that would adversely impact the individual's
  independence and impartiality in rendering a decision in an
  arbitration. A conflict of interest includes current or recent
  ownership or employment of the individual or a close family member
  in any health benefit plan issuer or administrator or physician,
  health care practitioner, or other health care provider.
         (d)  The commissioner shall immediately terminate the
  approval of an arbitrator who no longer meets the requirements
  under this subchapter and rules adopted under this subchapter to
  serve as an arbitrator.
         Sec. 1467.087.  PROCEDURES. (a)  The arbitrator shall set a
  date for submission of all information to be considered by the
  arbitrator.
         (b)  A party may not engage in discovery in connection with
  the arbitration.
         (c)  On agreement of all parties, any deadline under this
  subchapter may be extended.
         (d)  Unless otherwise agreed to by the parties, an arbitrator
  may not determine whether a health benefit plan covers a particular
  health care or medical service or supply.
         (e)  The parties shall evenly split and pay the arbitrator's
  fees and expenses.
         (f)  Information submitted by the parties to the arbitrator
  is confidential and not subject to disclosure under Chapter 552,
  Government Code.
         Sec. 1467.088.  DECISION. (a)  Not later than the 51st day
  after the date the arbitration is requested, an arbitrator shall
  provide the parties with a written decision in which the
  arbitrator:
               (1)  determines whether the billed charge or the
  payment made by the health benefit plan issuer or administrator, as
  those amounts were last modified during the issuer's or
  administrator's internal appeal process, if the provider elects to
  participate, or the informal settlement teleconference required by
  Section 1467.084(d), as applicable, is the closest to the
  reasonable amount for the services or supplies determined in
  accordance with Section 1467.083(b); and
               (2)  selects the amount determined to be closest under
  Subdivision (1) as the binding award amount.
         (b)  An arbitrator may not modify the binding award amount
  selected under Subsection (a).
         (c)  An arbitrator shall provide written notice in the form
  and manner prescribed by commissioner rule of the reasonable amount
  for the services or supplies and the binding award amount.  If the
  parties settle before a decision, the parties shall provide written
  notice in the form and manner prescribed by commissioner rule of the
  amount of the settlement.  The department shall maintain a record of
  notices provided under this subsection.
         Sec. 1467.089.  EFFECT OF DECISION. (a)  An arbitrator's
  decision under Section 1467.088 is binding.
         (b)  Not later than the 45th day after the date of an
  arbitrator's decision under Section 1467.088, a party not satisfied
  with the decision may file an action to determine the payment due to
  an out-of-network provider.
         (c)  In an action filed under Subsection (b), the court shall
  determine whether the arbitrator's decision is proper based on a
  substantial evidence standard of review.
         (d)  Not later than the 30th day after the date of an
  arbitrator's decision under Section 1467.088, a health benefit plan
  issuer or administrator shall pay to an out-of-network provider any
  additional amount necessary to satisfy the binding award.
         SECTION 2.16.  Subchapter C, Chapter 1467, Insurance Code,
  is amended to read as follows:
  SUBCHAPTER C.  BAD FAITH PARTICIPATION [MEDIATION]
         Sec. 1467.101.  BAD FAITH. (a)  The following conduct
  constitutes bad faith participation [mediation] for purposes of
  this chapter:
               (1)  failing to participate in the informal settlement
  teleconference under Section 1467.084(d) or an arbitration or
  mediation under this chapter;
               (2)  failing to provide information the arbitrator or
  mediator believes is necessary to facilitate a decision or [an]
  agreement; or
               (3)  failing to designate a representative
  participating in the arbitration or mediation with full authority
  to enter into any [mediated] agreement.
         (b)  Failure to reach an agreement under Subchapter B is not
  conclusive proof of bad faith participation [mediation].
         Sec. 1467.102.  PENALTIES. (a)  Bad faith participation or
  otherwise failing to comply with Subchapter B-1 [mediation, by a
  party other than the enrollee,] is grounds for imposition of an
  administrative penalty by the regulatory agency that issued a
  license or certificate of authority to the party who committed the
  violation.
         (b)  Except for good cause shown, on a report of a mediator
  and appropriate proof of bad faith participation under Subchapter B
  [mediation], the regulatory agency that issued the license or
  certificate of authority shall impose an administrative penalty.
         SECTION 2.17.  Sections 1467.151(a), (b), and (c), Insurance
  Code, are amended to read as follows:
         (a)  The commissioner and the Texas Medical Board or other
  regulatory agency, as appropriate, shall adopt rules regulating the
  investigation and review of a complaint filed that relates to the
  settlement of an out-of-network health benefit claim that is
  subject to this chapter.  The rules adopted under this section must:
               (1)  distinguish among complaints for out-of-network
  coverage or payment and give priority to investigating allegations
  of delayed health care or medical care;
               (2)  develop a form for filing a complaint [and
  establish an outreach effort to inform enrollees of the
  availability of the claims dispute resolution process under this
  chapter]; and
               (3)  ensure that a complaint is not dismissed without
  appropriate consideration[;
               [(4)     ensure that enrollees are informed of the
  availability of mandatory mediation; and
               [(5)     require the administrator to include a notice of
  the claims dispute resolution process available under this chapter
  with the explanation of benefits sent to an enrollee].
         (b)  The department and the Texas Medical Board or other
  appropriate regulatory agency shall maintain information[:
               [(1)]  on each complaint filed that concerns a claim,
  arbitration, or mediation subject to this chapter[; and
               [(2)     related to a claim that is the basis of an
  enrollee complaint], including:
               (1) [(A)]  the type of services or supplies that gave
  rise to the dispute;
               (2) [(B)]  the type and specialty, if any, of the
  out-of-network [facility-based] provider [or emergency care
  provider] who provided the out-of-network service or supply;
               (3) [(C)]  the county and metropolitan area in which
  the health care or medical service or supply was provided;
               (4) [(D)]  whether the health care or medical service
  or supply was for emergency care; and
               (5) [(E)]  any other information about:
                     (A) [(i)]  the health benefit plan issuer
  [insurer] or administrator that the commissioner by rule requires;
  or
                     (B) [(ii)]  the out-of-network [facility-based]
  provider [or emergency care provider] that the Texas Medical Board
  or other appropriate regulatory agency by rule requires.
         (c)  The information collected and maintained [by the
  department and the Texas Medical Board and other appropriate
  regulatory agencies] under Subsection (b) [(b)(2)] is public
  information as defined by Section 552.002, Government Code, and may
  not include personally identifiable information or health care or
  medical information.
  ARTICLE 3. CONFORMING AMENDMENTS
         SECTION 3.01.  Section 1456.003(a), Insurance Code, is
  amended to read as follows:
         (a)  Each health benefit plan that provides health care
  through a provider network shall provide notice to its enrollees
  that:
               (1)  a facility-based physician or other health care
  practitioner may not be included in the health benefit plan's
  provider network; and
               (2)  a health care practitioner described by
  Subdivision (1) may balance bill the enrollee for amounts not paid
  by the health benefit plan unless the health care or medical service
  or supply provided to the enrollee is subject to a law prohibiting
  balance billing.
         SECTION 3.02.  Section 1456.006, Insurance Code, is amended
  to read as follows:
         Sec. 1456.006.  COMMISSIONER RULES; FORM OF DISCLOSURE. The
  commissioner by rule may prescribe specific requirements for the
  disclosure required under Section 1456.003.  The form of the
  disclosure must be substantially as follows:
         NOTICE: "ALTHOUGH HEALTH CARE SERVICES MAY BE OR HAVE BEEN
  PROVIDED TO YOU AT A HEALTH CARE FACILITY THAT IS A MEMBER OF THE
  PROVIDER NETWORK USED BY YOUR HEALTH BENEFIT PLAN, OTHER
  PROFESSIONAL SERVICES MAY BE OR HAVE BEEN PROVIDED AT OR THROUGH THE
  FACILITY BY PHYSICIANS AND OTHER HEALTH CARE PRACTITIONERS WHO ARE
  NOT MEMBERS OF THAT NETWORK. YOU MAY BE RESPONSIBLE FOR PAYMENT OF
  ALL OR PART OF THE FEES FOR THOSE PROFESSIONAL SERVICES THAT ARE NOT
  PAID OR COVERED BY YOUR HEALTH BENEFIT PLAN UNLESS BALANCE BILLING
  FOR THOSE SERVICES IS PROHIBITED."
         SECTION 3.03.  The following provisions of the Insurance
  Code are repealed:
               (1)  Section 1456.004(c);
               (2)  Section 1467.001(2);
               (3)  Sections 1467.051(c) and (d);
               (4)  Section 1467.0511;
               (5)  Sections 1467.053(b) and (c);
               (6)  Sections 1467.054(b), (c), (f), and (g);
               (7)  Sections 1467.055(d) and (h);
               (8)  Section 1467.057;
               (9)  Section 1467.058;
               (10)  Section 1467.059; and
               (11)  Section 1467.151(d).
  ARTICLE 4. STUDY
         SECTION 4.01.  Subchapter A, Chapter 38, Insurance Code, is
  amended by adding Section 38.004 to read as follows:
         Sec. 38.004.  BALANCE BILLING PROHIBITION REPORT. (a)  The
  department shall, each biennium, conduct a study on the impacts of
  S.B. No. 1264, Acts of the 86th Legislature, Regular Session, 2019,
  on Texas consumers and health coverage in this state, including:
               (1)  trends in billed amounts for health care or
  medical services or supplies, especially emergency services,
  laboratory services, diagnostic imaging services, and
  facility-based services;
               (2)  comparison of the total amount spent on
  out-of-network emergency services, laboratory services, diagnostic
  imaging services, and facility-based services by calendar year and
  provider type or physician specialty;
               (3)  trends and changes in network participation by
  providers of emergency services, laboratory services, diagnostic
  imaging services, and facility-based services by provider type or
  physician specialty, including whether any terminations were
  initiated by a health benefit plan issuer, administrator, or
  provider;
               (4)  trends and changes in the amounts paid to
  participating providers;
               (5)  the number of complaints, completed
  investigations, and disciplinary sanctions for billing by
  providers of emergency services, laboratory services, diagnostic
  imaging services, or facility-based services of enrollees for
  amounts greater than the enrollee's responsibility under an
  applicable health benefit plan, including applicable copayments,
  coinsurance, and deductibles;
               (6)  trends in amounts paid to out-of-network
  providers;
               (7)  trends in the usual and customary rate for health
  care or medical services or supplies, especially emergency
  services, laboratory services, diagnostic imaging services, and
  facility-based services; and
               (8)  the effectiveness of the claim dispute resolution
  process under Chapter 1467.
         (b)  In conducting the study described by Subsection (a), the
  department shall collect settlement data and verdicts or
  arbitration awards, as applicable, from parties to mediation or
  arbitration under Chapter 1467.
         (c)  The department may not publish a particular rate paid to
  a participating provider in the study described by Subsection (a),
  identifying information of a physician or health care provider, or
  non-aggregated study results. Information described by this
  subsection is confidential and not subject to disclosure under
  Chapter 552, Government Code.
         (d)  The department:
               (1)  shall collect data quarterly from a health benefit
  plan issuer or administrator subject to Chapter 1467 to conduct the
  study required by this section; and
               (2)  may utilize any reliable external resource or
  entity to acquire information reasonably necessary to prepare the
  report required by Subsection (e).
         (e)  Not later than December 1 of each even-numbered year,
  the department shall prepare and submit a written report on the
  results of the study under this section, including the department's
  findings, to the legislature.
  ARTICLE 5. TRANSITION AND EFFECTIVE DATE
         SECTION 5.01.  The changes in law made by this Act apply only
  to a health care or medical service or supply provided on or after
  January 1, 2020. A health care or medical service or supply
  provided before January 1, 2020, is governed by the law in effect
  immediately before the effective date of this Act, and that law is
  continued in effect for that purpose.
         SECTION 5.02.  This Act takes effect September 1, 2019.
 
 
 
 
 
  ______________________________ ______________________________
     President of the Senate Speaker of the House     
 
         I hereby certify that S.B. No. 1264 passed the Senate on
  April 16, 2019, by the following vote: Yeas 29, Nays 2; and that
  the Senate concurred in House amendments on May 24, 2019, by the
  following vote: Yeas 31, Nays 0.
 
 
  ______________________________
  Secretary of the Senate    
 
         I hereby certify that S.B. No. 1264 passed the House, with
  amendments, on May 21, 2019, by the following vote: Yeas 146,
  Nays 0, one present not voting.
 
 
  ______________________________
  Chief Clerk of the House   
 
 
 
  Approved:
 
  ______________________________ 
              Date
 
 
  ______________________________ 
            Governor