TITLE 28.INSURANCE

Part 1. TEXAS DEPARTMENT OF INSURANCE

Chapter 3. LIFE, ACCIDENT AND HEALTH INSURANCE AND ANNUITIES

The Commissioner of Insurance adopts an amendment to §3.3703, concerning insurer contracting arrangements with preferred providers. The amendment is adopted without changes to the proposed text as published in the August 5, 2005, issue of the Texas Register (30 TexReg 4437).

This amendment is necessary to implement Senate Bill (SB) 50 enacted by the 79th Legislature, Regular Session. Consistent with SB 50, the amendment to §3.3703 requires that, upon request from a preferred provider, an insurer shall include a provision in the provider contract providing that the insurer or the insurer’s clearinghouse may not deny or refuse to process an electronic clean claim because the claim is submitted together with or in a batch submission of claims that contains claims that are deficient.

The amendment includes the contracting requirement enacted in SB 50 and adds further language to define the term "batch submission." The definition clarifies that the reference to a batch submission is a reference to existing federally standardized transactions and provides that a batch submission is a group of electronic claims submitted for processing at the same time within a HIPAA standard ASC X12N 837 Transaction Set and identified by a batch control number. It is important that insurers avoid erroneously interpreting the language of SB 50 and the adopted amendment. The language of the statute and the adopted amendment apply not only to clean claims submitted in a batch submission with a claim that is deficient, but also to clean claims submitted "together with" claims that are deficient, regardless of whether those claims are in a batch submission. The contract requirement in SB 50 and the adopted amendment applies to more than just those clean claims submitted in a batch submission and includes groups of claims that may or may not be properly classified as a batch submission for federal standardized transactions. Therefore, in applying the contract requirement, it is incorrect for insurers simply to focus on whether claims that are submitted together are in a batch submission that meets the federal regulatory definition.

Comment: Commenters agreed with the proposed language that describes the meaning of the term "batch submission."

Agency Response: The department appreciates the supportive comment.

Comment: Though the commenters supported the rule as proposed, one commenter requested that the rule be made applicable to contracts "amended" on or after January 1, 2006. The commenter based the request on language in the statute that states that the provider may request language in the contract providing that the insurer may not refuse to process or pay an electronically submitted clean claim because the claim is submitted together with or in a batch submission with a claim that is not a clean claim.

Agency Response: The department appreciates the supportive comments. Although the department understands the commenter’s desire to affect as many contracts as possible in the quickest time possible, SB 50 specifically provides that the changes in the law apply only to contracts "entered into or renewed" on or after January 1, 2006. The rule is consistent with SB 50, and it is the department’s position that extending the rule to apply to contract amendments made prior to January 1, 2006 is not within the department’s authority. To the extent that a contract amended after January 1, 2006 either includes the language contemplated in SB 50 or otherwise constitutes a renewal of the contract, SB 50 will apply to the contract.

For: Texas Medical Association.

For with changes: Texas Hospital Association.

Against: None.

The amendment is adopted under Insurance Code §§1301.007, 1301.0641 and 36.001. Section 1301.007 authorizes the Commissioner to adopt rules necessary to implement Insurance Code Title 8 Chapter 1301 and to ensure reasonable accessibility and availability of preferred provider benefits and basic level benefits to residents of this state. Section 1301.0641 provides that, if requested by a preferred provider, an insurer shall include a provision in the preferred provider's contract providing that the insurer or the insurer's clearinghouse may not refuse to process or pay an electronically submitted clean claim because the claim is submitted together with or in a batch submission with a claim that is deficient. Section 36.001 provides that the Commissioner of Insurance may adopt any rules necessary and appropriate to implement the powers and duties of the Texas Department of Insurance under the Insurance Code and other laws of this state.

This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on December 30, 2005.

TRD-200506149

Gene C. Jarmon

General Counsel and Chief Clerk

Texas Department of Insurance

Effective date: January 19, 2006

Proposal publication date: August 5, 2005

For further information, please call: (512) 463-6327

Chapter 9. TITLE INSURANCE

Subchapter A. BASIC MANUAL OF RULES, RATES AND FORMS FOR THE WRITING OF TITLE INSURANCE IN THE STATE OF TEXAS

28 TAC §9.1

The Commissioner of Insurance adopts an amendment to §9.1 that adopts by reference a change to the Texas Reverse Mortgage Endorsement, Form T-43, relating to home equity reverse mortgage loans, which the form is contained in the Basic Manual of Rules, Rates and Forms for the Writing of Title Insurance in the State of Texas (Basic Manual). The amended section is adopted without changes to the proposed text as published in the November 25, 2005, issue of the Texas Register (30 TexReg 7808). There is also no change to the proposed amended endorsement form that is adopted by reference.

The amendment to §9.1 updates the date of the Basic Manual to accommodate incorporation of the amended Form T-43, Texas Reverse Mortgage Endorsement. The 79th Legislature, Regular Session, adopted Senate Joint Resolution 7 proposing a constitutional amendment authorizing line-of-credit advances for liens securing a reverse mortgage on Texas homestead property. By voter approval on November 8, 2005, Section 50, Article XVI of the Texas Constitution was amended to authorize line-of-credit advances under a reverse mortgage loan. The amendment to endorsement form T-43 in the Basic Manual is necessary to facilitate the issuing of mortgagee title policies insuring home equity liens on homestead property.

The effective date of the amended section is January 20, 2006. The modification to the existing title insurance Form T-43 relating to home equity reverse mortgages refers to the correct and applicable law contained in the constitutional amendment as authorized by Texas voters and sets forth the scope and limitations of the insurance coverage of this form. The amended endorsement will facilitate title insurance companies writing title insurance coverage regarding home equity reverse mortgage lending in Texas. The department has filed a copy of the adopted amended form with the Secretary of State's Texas Register section. The adopted amended form is available from the Office of the Chief Clerk, Texas Department of Insurance, 333 Guadalupe Street, P.O. Box 149104, Austin, Texas 78714-9104. To request a copy, please contact Sylvia Gutierrez at (512) 463-6327.

The department did not receive any comments on the proposal.

The amended section is adopted pursuant to the Insurance Code §2551.003, Chapter 2703, and §36.001, and Section 50, Article XVI of the Texas Constitution. Chapter 2703 authorizes and requires the Commissioner to promulgate or approve rules and policy forms of title insurance and otherwise to provide for the regulation of the business of title insurance. Section 2551.003 authorizes the Commissioner to promulgate and enforce rules prescribing underwriting standards and practices and to promulgate and enforce all other rules necessary to accomplish the purposes of Title 11, concerning regulation of title insurance. Section 36.001 of the Insurance Code provides that the Commissioner of Insurance may adopt any rules necessary and appropriate to implement the powers and duties of the Texas Department of Insurance under the Insurance Code and other laws of this state. By voter approval on November 8, 2005, Section 50, Article XVI of the Texas Constitution was amended to provide for home equity line-of-credit advances on reverse mortgages.

This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on December 29, 2005.

TRD-200506130

Gene C. Jarmon

General Counsel and Chief Clerk

Texas Department of Insurance

Effective date: January 20, 2006

Proposal publication date: November 25, 2005

For further information, please call: (512) 463-6327

Chapter 11. HEALTH MAINTENANCE ORGANIZATIONS

Subchapter J. PHYSICIAN AND PROVIDER CONTRACTS AND ARRANGEMENTS

28 TAC §11.901

The Commissioner of Insurance adopts an amendment to §11.901, concerning health maintenance organization (HMO) contracting arrangements with participating physicians and providers. The amendment is adopted without changes to the proposed text as published in the August 5, 2005, issue of the Texas Register (30 TexReg 4438).

This amendment is necessary to implement Senate Bill (SB) 50 enacted by the 79th Legislature, Regular Session. Consistent with SB 50, the amendment to §11.901 requires that, upon request from a participating physician or provider, an HMO shall include a provision in the physician’s or provider’s contract providing that the HMO or the HMO’s clearinghouse may not deny or refuse to process an electronic clean claim because the claim is submitted together with or in a batch submission of claims that contains claims that are deficient.

The amendment includes the contracting requirement enacted in SB 50 and adds further language to define the term "batch submission." The definition clarifies that the reference to a batch submission is a reference to existing federally standardized transactions and provides that a batch submission is a group of electronic claims which are submitted for processing at the same time within a HIPAA standard ASC X12N 837 Transaction Set and identified by a batch control number. It is important that HMOs avoid erroneously interpreting the language of SB 50 and the adopted amendment. The language of the statute and the adopted amendment apply to clean claims submitted in a batch submission with a claim that is deficient but also to clean claims submitted "together with" claims that are deficient, regardless of whether those claims are in a batch submission. The contract requirement in SB 50 and the adopted amendment applies to more than just those claims submitted in a batch submission and includes groups of claims that may or may not be properly classified as a batch submission for federally standardized transactions. Therefore, in applying the contract requirement, it is incorrect for HMOs simply to focus on whether claims that are submitted together are in a batch submission that meets the federal regulatory definition.

Comment: Commenters agreed with the proposed language that describes the meaning of the term "batch submission."

Agency Response: The department appreciates the supportive comment.

Agency Response: The department appreciates the supportive comments. Although the department understands the commenter’s desire to affect the greatest number of contracts in the quickest time possible, SB 50 specifically provides that the changes in the law apply only to contracts "entered into or renewed" on or after January 1, 2006. The rule is consistent with SB 50, and it is the department’s position that extending the rule to apply to contract amendments made prior to January 1, 2006 is not within the department’s authority. To the extent that a contract amended after January 1, 2006 either includes the language contemplated in SB 50 or otherwise constitutes a renewal of the contract, SB 50 will apply to the contract.

For: Texas Medical Association.

For with changes: Texas Hospital Association.

Against: None.

The amendment is adopted under the Insurance Code §§843.151, 843.323 and 36.001. Section 843.151 authorizes the commissioner to adopt reasonable rules as necessary and proper to implement Insurance Code Title 6 Chapter 843. Section 843.323 provides that, if requested by a participating physician or provider, an HMO shall include a provision in the physician’s or provider's contract providing that the HMO or the HMO's clearinghouse may not refuse to process or pay an electronically submitted clean claim because the claim is submitted together with or in a batch submission with a claim that is deficient. Section 36.001 provides that the Commissioner of Insurance may adopt any rules necessary and appropriate to implement the powers and duties of the Texas Department of Insurance under the Insurance Code and other laws of this state.

This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on December 30, 2005.

TRD-200506150

Gene C. Jarmon

General Counsel and Chief Clerk

Texas Department of Insurance

Effective date: January 19, 2006

Proposal publication date: August 5, 2005

For further information, please call: (512) 463-6327

Chapter 19. AGENTS' LICENSING

Subchapter K. CONTINUING EDUCATION AND ADJUSTER PRELICENSING EDUCATION PROGRAMS

28 TAC §§19.1011, 19.1020, 19.1021

The Commissioner of Insurance adopts amendments to §19.1011 and new §19.1020, concerning continuing education credit for licensees who are active members of state and national insurance associations, and new §19.1021, concerning national flood insurance education training. Section 19.1021 is adopted with changes to correct formatting in the proposed text as published in the November 11, 2005, issue of the Texas Register (30 TexReg 7357). Sections 19.1011 and 19.1020 are adopted without changes and will not be republished.

These amendments and new sections are necessary to implement the continuing education credits for agents who are active members of state and national insurance associations as directed by SB 265 enacted by the 79th Legislature, Regular Session; to authorize similar continuing education credits for life and health insurance counselors, insurance adjusters and public insurance adjusters; and to establish certified course requirements for course providers offering minimum flood insurance training under the federal Flood Insurance Reform Act of 2004.

Under SB 265, the Commissioner is authorized to adopt rules allowing the department to grant not more than four hours of continuing education credit to an agent who is an active member of a state or national insurance association. As required by SB 265, this adoption specifies acceptable state and national insurance associations, the number of hours of credit that agents who are active members of such associations may obtain for certain activities, and the procedure for agent members to claim credit for completing these activities. This adoption also authorizes the same continuing education credit for holders of national designation certifications. Additionally, this adoption authorizes the same continuing education credit for life and health insurance counselors, insurance adjusters, and public insurance adjusters pursuant to authority granted to the Commissioner in the applicable statutes related to continuing education for those license types.

This adoption also establishes the criteria for certified courses that course providers may develop to comply with the minimum training and education requirements established by the Federal Emergency Management Agency (FEMA) to implement the Flood Insurance Reform Act of 2004 for insurance agents who sell Standard Flood Insurance Policies issued through the National Flood Insurance Program.

Amendments to §19.1011 specify the information that state or national insurance association members or national designation certification holders are required to submit to claim credit for the continuing education hours authorized in this adoption and the procedure for claiming those continuing education credit hours. Section 19.1020 describes the associations that qualify as a state or national insurance association for the purposes of continuing education credit under SB 265, the activities for which this credit may be claimed, and the maximum number of credit hours that may be claimed. Section 19.1021 establishes the criteria for certified courses that course providers may develop for persons who intend to write or insurance agents who currently write flood insurance to comply with FEMA’s minimum training and education requirements implementing the Flood Insurance Reform Act of 2004. Additionally, the numbering in §19.1021(g)(7) was revised to the required format.

The department received no comments on the proposed amended or new sections.

The amendments and new sections are adopted under the Insurance Code Chapters 4001, 4004, 4052, 4101, and 4102. Section 4004.101 authorizes the commissioner to adopt rules establishing the criteria for continuing education courses for license holders. Section 4004.0535 authorizes the commissioner by rule to allow the department to grant not more than four hours of continuing education credit to an agent who is an active member of a state or national insurance association, to adopt rules specifying the types of associations that constitute state or national insurance associations, the reasonable requirements for active participation in the association, and the manner of providing this information to the department. Section 4052.003 provides that, except as provided in Chapter 4052, Life and Health Insurance Counselors are licensed and regulated in the same manner as agents. Section 4101.059 authorizes the commissioner to certify a continuing education program for insurance adjusters. Section 4102.109 authorizes the commissioner to prescribe continuing education course requirements for public insurance adjusters. Section 36.001 provides that the Commissioner of Insurance may adopt any rules necessary and appropriate to implement the powers and duties of the Texas Department of Insurance under the Insurance Code and other laws of this state.

§19.1021.Flood Insurance Education Course.

(a) Pursuant to §207 of the Flood Insurance Reform Act of 2004, the Federal Emergency Management Agency on September 1, 2005 published minimum training and education standards for persons that intend to write or currently write flood insurance (Federal Register, Vol. 70, No. 169, pp. 52117-52119). This section establishes these standards for a department-certified continuing education course.

(b) The course shall:

(1) be submitted for approval in compliance with §19.1007 of this subchapter (relating to Course Certification Submission Applications, Course Expirations, and Resubmissions);

(2) be at least three hours in length;

(3) and cover the topics listed in subsection (g) of this section.

(d) The course may be taken after the department has issued a license or within 12 months preceding the license issue date.

(e) Licensees may count up to three hours towards completion of their initial continuing education requirement for successful completion of a certified flood insurance training course prior to issuance of their license. The licensee shall maintain proof of completion of the flood insurance training course prior to licensure for four years or through the second renewal of the license, whichever is longer. Upon request, the licensee shall provide the proof of course completion to the department or the department’s designee.

(f) A provider-issued completion certificate in compliance with §19.1011(e) of this subchapter (relating to Requirements for Successful Completion of Continuing Education Courses) shall demonstrate proof of successful course completion.

(g) Course topics for the basic flood insurance course outline shall include:

(1) Section I - Introduction:

(A) National Flood Insurance Program (NFIP) Background;

(B) Community Participation;

(D) Regular Program Defined;

(E) Community Rating System;

(F) Eligible/Ineligible Buildings;

(G) Coastal Barrier Resources System and Other Protected Areas;

(H) Who Needs Flood Insurance?

(i) Mandatory Purchase of Flood Insurance in High Flood Risk Zones; and

(ii) Recommended in Moderate and Low Flood Risk Zones; and

(I) Why Flood Insurance is Better than Disaster Assistance.

(2) Section II - Flood Maps and Zone Determinations:

(A) Flood Hazard Boundary Map (FHBM);

(B) Flood Insurance Rate Map (FIRM):

(i) Pre-FIRM/Post-FIRM Defined; and

(ii) Special Flood Hazard Area Defined;

(D) Zone Determination.

(3) Section III - Policies and Products Available:

(A) Dwelling Policy - Types of Buildings Covered;

(B) General Property Policy - Types of Buildings Covered;

(D) Preferred Risk Policy - Types of Buildings Covered;

(E) Definitions:

(i) Flood;

(ii) Basement/Enclosure; and

(iii) Elevated Buildings;

(F) Damages Not Covered:

(i) Single Peril Policy; and

(ii) Mudslides vs. Mudflow;

(G) Property Covered:

(i) Basements;

(ii) Appurtenant Structure;

(iii) Loss Avoidance Measures;

(iv) Debris Removal; and

(v) Improvements and Betterments;

(H) Property and Expenses Not Covered:

(i) Decks;

(ii) Finished Items in Basements;

(iii) Property in Enclosures; and

(iv) Additional Living Expenses;

(I) Increased Cost of Compliance Coverage.

(4) Section IV - General Rules:

(A) Statutory Coverage Limits;

(B) Deductibles:

(i) Standard Deductibles; and

(ii) Apply Separately for Building and Contents;

(D) Loss Settlement:

(i) Actual Cash Value (ACV);

(ii) Replacement Cost Value (RCV); and

(iii) Co-insurance Penalty in RCBAP;

(E) Reduction and Reformation of Coverage;

(F) No Binders;

(G) One Building per Policy - No Blanket Coverage;

(H) Building and Contents Coverage Purchased Separately;

(I) Waiting Period/Effective Date of Policy;

(J) Policy Term; and

(K) Cancellations.

(5) Section V - Rating:

(A) Types of Buildings:

(i) Elevated Buildings; and

(ii) Buildings with Basements;

(B) When to Use an Elevation Certificate; and

(6) Section VI - Claims Handling Process:

(A) Helping Your Client to File a Claim;

(B) Appeals Process; and

(7) Section VII - Requirements of the Flood Insurance Reform Act of 2004; Point of Sale and Renewal Responsibilities:

(A) Notification of Coverages Being Purchased;

(B) Policy Exclusions that Apply;

(D) Number and Dollar Amount of Claims for Property; and

(E) Acknowledgement Forms.

(8) Section VIII - Agent Resources:

(A) Write Your Own Company;

(B) FEMA Websites:

(i) http://www.fema.gov/nfip;

(ii) http://www.floodsmart.gov; and

(iii) http://training.nfipstat.com/; and

This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on December 30, 2005.

TRD-200506146

Gene C. Jarmon

General Counsel and Chief Clerk

Texas Department of Insurance

Effective date: January 19, 2006

Proposal publication date: November 11, 2005

For further information, please call: (512) 463-6327

Subchapter R. UTILIZATION REVIEW AGENTS

28 TAC §§19.1703, 19.1723, 19.1724

The Commissioner of Insurance adopts amendments to §§19.1703, 19.1723, and 19.1724, concerning utilization review agents. These amendments are adopted without changes to the proposed text as published in the August 5, 2005, issue of the Texas Register (30 TexReg 4439).

These amendments are necessary to implement Senate Bill (SB) 51, enacted by the 79th Legislature, Regular Session, which in pertinent part revises preauthorization and verification response procedures for single service HMOs providing dental health care services or routine vision services. In addition, amendments to §19.1723 and §19.1724(a) update references and correct a typographical error.

The amendments to §19.1703 add definitions for the terms "routine vision services," consistent with the language of SB 51, and "single health care service plan," consistent with Insurance Code §843.002(26). Consistent with §843.347(h) and (i) and §843.348(i) and (j) as enacted in SB 51, the amendments to §19.1723 and §19.1724 require that an HMO providing routine vision services as a single health care service plan or providing dental health care services as a single health care service plan have appropriate personnel reasonably available at a toll-free telephone number from 8:00 a.m. to 5:00 p.m. central time Monday through Friday on each day that is not a legal holiday to receive and respond to requests for preauthorization and verification. Also consistent with the statutory requirements, the amendments require these single health care service plans to have a telephone system capable of accepting and recording incoming requests during other times and to respond to those off-hour requests no later than the next business day after the call is received.

Comment: A commenter agrees with the proposed amendments. Agency Response: The department appreciates the supportive comment.

For: Texas Hospital Association.

Against: None.

The amendments are adopted under Insurance Code §§843.151, 843.347(h) and (i), 843.348(i) and (j), and 36.001. Section 843.151 authorizes the commissioner to adopt reasonable rules as necessary and proper to implement Insurance Code Title 6 Chapter 843. Sections 843.347(h) and (i) and 843.348(i) and (j) provide that an HMO providing routine vision services as a single health care service plan or providing dental health care services as a single health care service plan is not required to comply with the statutorily specified timeframes for other carriers for receiving and responding to requests for preauthorization and verification, but must instead: have appropriate personnel reasonably available between 8:00 a.m. and 5:00 p.m. central time Monday through Friday to receive and respond to such requests; have a telephone system capable of accepting and recording incoming requests during other times; and respond to those off-hour requests no later than the next business day after the call is received. Section 36.001 provides that the Commissioner of Insurance may adopt any rules necessary and appropriate to implement the powers and duties of the Texas Department of Insurance under the Insurance Code and other laws of this state.

This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on December 30, 2005.

TRD-200506145

Gene C. Jarmon

General Counsel and Chief Clerk

Texas Department of Insurance

Effective date: January 19, 2006

Proposal publication date: August 5, 2005

For further information, please call: (512) 463-6327

Chapter 21. TRADE PRACTICES

Subchapter M. MANDATORY BENEFIT NOTICE REQUIREMENTS

28 TAC §§21.2101 - 21.2103, 21.2105, 21.2106

The Commissioner of Insurance adopts amendments to §§21.2101 - 21.2103, 21.2105 and 21.2106, concerning mandatory notice of coverage of certain tests for the detection of human papillomavirus and cervical cancer. The sections are adopted without changes to the proposed text as published in the November 11, 2005, issue of the Texas Register (30 TexReg 7360).

These amendments are necessary to implement HB 1485 enacted by the 79th Texas Legislature, Regular Session, which added Chapter 1370 to the Texas Insurance Code, mandating certain benefits related to the detection of human papillomavirus and cervical cancer. Chapter 1370 also contains mandatory notice requirements. This adoption amends the notice provisions in 28 Texas Administrative Code, Subchapter M to implement the statutory notice requirement in §1370.004. The adoption also updates statutory references changed by the Texas Legislature’s enactment of nonsubstantive revision of the Insurance Code.

The amendments to §21.2101 expand the scope of the subchapter to include the notice requirements for coverage of benefits related to the detection of human papillomavirus and cervical cancer and set an effective date for the notice requirements. The amendments to §21.2102 revise the definitions of "carrier" and "health benefit plan" to implement the provisions of HB 1485. The amendments to §21.2103 require a carrier to issue the notice related to the detection of human papillomavirus and cervical cancer and revise subsection (d) to provide that if the mandated notice is issued prior to the effective date of these amendments, the notice is deemed compliant with the subchapter’s notice requirements. The amendments to §21.2105 recognize statutory changes permitting electronic distribution of notices and address requirements relating to delivery of the notice. The amendment to §21.2106 adopts a new form, number LHL391, which carriers may use to satisfy the notice requirement. The adoption also includes corrective editorial and grammatical changes for clarity as well as to update statutory references.

The department received no comments.

The amendments are adopted under Insurance Code §§1370.004, 1251.201, 1251.008, 1271.002, 843.151, and 36.001. Section 1370.004 requires health benefit plan issuers to provide written notice of coverage related to the detection of human papillomavirus and cervical cancer to each woman 18 years of age or older enrolled in the plan in accordance with rules adopted by the Commissioner. Section 1251.201 authorizes an insurer, by agreement between the insurer and the policyholder, to deliver certificates of insurance electronically. Section 1251.008 authorizes the commissioner to adopt rules necessary to administer Chapter 1251. Section 1271.002 authorizes an insurer, group hospital service corporation, or health maintenance organization, by agreement between it and the subscriber or other person entitled to receive the policy, contract, or evidence of coverage, to deliver evidences of coverage electronically. Section 843.151 authorizes the commissioner to adopt reasonable rules as necessary and proper to implement Chapter 1271. Section 36.001 provides that the Commissioner of Insurance may adopt any rules necessary and appropriate to implement the powers and duties of the Texas Department of Insurance under the Insurance Code and other laws of this state.

This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on December 30, 2005.

TRD-200506144

Gene C. Jarmon

General Counsel and Chief Clerk

Texas Department of Insurance

Effective date: January 19, 2006

Proposal publication date: November 11, 2005

For further information, please call: (512) 463-6327

Subchapter T. SUBMISSION OF CLEAN CLAIMS

28 TAC §§21.2802, 21.2807, 21.2815, 21.2821

The Commissioner of Insurance adopts amendments to §§21.2802, 21.2807, 21.2815, and 21.2821, concerning submission of clean claims. Sections 21.2802 and 21.2815 are adopted with changes to the proposed text as published in the August 5, 2005, issue of the Texas Register (30 TexReg 4442). Sections 21.2807 and 21.2821 are adopted without changes and will not be republished.

These amendments are necessary to ensure that carriers are aware of the responsibility to process a clean claim submitted together with deficient claims; to ensure that penalties for failure to meet the statutory claims payment period are calculated consistently and in accordance with statutory requirements; and to provide consistency between the date for quarterly reporting of claims data and the date for the annual reporting of the number of declinations of requests for verification and clarify the reporting period for the required verification data report.

The department held a hearing on the proposed amendments on September 7, 2005. Prior to the hearing, the department received comments from interested parties. In response to the written comments and comments from the hearing, the department has modified some of the proposed amendments in the adopted text of the rule. Many of the changes requested in the comments received would require statutory changes and were not made a part of the final adopted rules. Of the changes made as a result of comments, none introduce a new subject matter or affect persons in addition to those subject to the proposal as originally published.

Definition of "patient responsibility." The department has changed the proposed term "patient responsibility" in §21.2802(18) to "patient financial responsibility" and has changed the proposed definition in response to comments to more specifically reflect that "patient financial responsibility," as used in this rule, derives from the terms of the patient’s health benefit plan. Patient financial responsibility does not include amounts due from a patient, if any, that are not included as part of the fee schedule or contracted reimbursement amount. The department is aware that some carriers structure provider fee agreements in such a way that a copayment amount may be in addition to the amount listed in the fee schedule. In such a case, the contracted amount is the fee schedule amount, and any portion of the fee schedule amount that the patient owes is classified as "patient financial responsibility" under the rule. The copayment amount that does not make up a part of the fee schedule amount is not a part of "patient financial responsibility." When carriers structure provider fee agreements in such a way as to include copayment requirements to be a part of the fee schedule amount, the copayment amount would correctly be classified as "patient financial responsibility" under the rule. The department has also changed, as necessary, references to the term "patient responsibility" throughout the rule to "patient financial responsibility."

Penalty calculation for underpaid claims. The department also received comments on proposed §21.2815(b)(1), (d), and (e) regarding the manner in which penalties should be calculated when a carrier underpays a claim. One particular commenter requested that the department consider including a patient’s financial responsibility amounts as part of the underpayment penalty calculation. The commenter indicated that a carrier’s initial underpayment could frustrate or delay a provider’s ability to collect the correct patient financial responsibility amount and that the penalty should take this into account by including that amount as part of the carrier’s underpaid amount. The adopted amendment does not incorporate this change, as the change would be inconsistent with Insurance Code §§843.342 and 1301.137, which penalizes carriers based on amounts owed by the carriers and not amounts owed by patients. The statute penalizes a carrier for failure to timely and correctly pay only its portion of the claim by requiring the carrier to "pay a penalty on the balance of the claim" based on when the "balance of the claim" is eventually paid. If "the balance of the claim" were to include amounts the provider was delayed in collecting from the patient, the carrier’s penalty payment responsibilities would be tied to the date the patient paid any applicable patient financial responsibility amounts. Such a result potentially penalizes a carrier based on lack of payment by the patient, which is outside the carrier’s control. Therefore, the "balance of the claim" must be understood to be the balance of the claim owed by the carrier, and a penalty that includes any amounts that the patient must pay is not a "penalty on the balance of the claim."

Section 21.2802. Adopted §21.2802(2) sets forth a definition for "batch submission" to clarify use of the term in §21.2807 detailing a carrier’s obligations with respect to multiple claims submitted together. The department has additionally changed incorrect subsection references in the proposed definition of "clean claim" in §21.2802(6)(A)(i) - (ii).

Section 21.2807. Section 21.2807 is amended to provide that a carrier may not deny or refuse to process a clean electronic claim because the claim is submitted together with, or in a batch submission with, deficient claims. This amendment is consistent with statutory and regulatory requirements that, upon receipt of an electronic clean claim at the designated address for claims receipt, a carrier must pay, deny, or audit the claim within 30 days. SB 50, enacted by the 79th Legislature, Regular Session, requires that carriers include upon request a provision in the provider’s contract indicating that the carrier will not deny or refuse to process an otherwise clean claim submitted in a batch of claims that may contain deficient claims. The department has adopted amendments to rules in Chapters 3 and 11 of this title to implement SB 50; these amendments are also published in this edition of the Texas Register. While SB 50 enables providers to be better informed of their rights under their contracts with health benefit plans, adopted §21.2807 clarifies that the requirement to process an electronic claim exists independently of the existence of a provision in the contract addressing batch claim submissions. The adopted amendments also change specific references to other rules in this title to general references. These changes are necessary to reduce the need for the department to frequently update and revise this section because of amendments to the referenced rules that result in a change in the citations. These changes are also user friendly in that persons who must comply with the rules will not have to monitor frequent changes and updates.

Section 21.2815. The adopted amendments to §21.2815 clarify the methodology for calculating a penalty for failure to meet the statutory claims payment period, as specified in Insurance Code §1301.103 and §843.338, when applicable patient financial responsibility under the terms of the patient's health benefit plan is considered. The department has received inquiries regarding the issue of coinsurance responsibilities when calculating a penalty for underpayment. The adopted rule addresses the penalty section as a whole and includes examples that make use of patient financial responsibility to provide greater clarity in instances of late payments penalties and underpayment penalties. Section 21.2815(b)(1) clarifies that patient financial responsibility is included in the contracted rate used for calculating a penalty. Amended §21.2815(d) as adopted clarifies the method for calculating a penalty on an underpaid claim. Insurance Code §843.342(g) and §1301.137(g) requires the carrier to calculate "the ratio of the amount underpaid on the contracted rate to the contracted rate as applied to the billed charges." Thus, the carrier pays the billed charges rate for the portion of the claim the carrier fails to timely pay. Section 21.2815(d) as amended includes an example to clarify how coinsurance or other patient responsibility should be treated when calculating an underpayment penalty. The amendment also clarifies that the rate used in the calculation should be the balance the carrier owes on the claim to the total amount the provider is due under the contract with the health plan. This represents the amount left unpaid after the carrier’s initial payment. This is consistent with the statutory directive in Insurance Code §843.342(d) and §1301.137(d) that the carrier must pay "a penalty on the amount not timely paid." This percentage is then applied to the specific portion of the claim that was paid late. The adopted amendments include examples with patient financial responsibility amounts to assist providers and carriers in understanding the correct calculation methods. In response to comments, the department has modified the example in proposed §21.2815(e) which demonstrates how a secondary carrier should calculate penalties for its proportionate responsibility for a claim. The change in the proposed amendment indicates that the overall percentage of the claim owed by the secondary carrier will impact the penalty calculations such that the contracted rate and billed charges amounts are both reduced to be consistent with the secondary carrier’s obligation on the claim. The adoption also corrects the format for monetary amounts to include cents for consistency with subsection (d) as amended.

Amended §21.2821 as adopted changes the deadline for the annual verification reporting requirement from on or before July 31 to on or before to August 15 of each year for consistency with the date for quarterly reporting of claims data as required in §21.2821. The adopted amendments also specify that the 12-month period for reporting the number of declinations of requests for verification is July 1 of the prior year through June 30 of the current year. This amendment is necessary to clarify the time period for which reporting is required.

Section 21.2802 as adopted is amended to add a definition of "patient financial responsibility" to clarify that the amount reflected by this term derives from the patient’s health benefit plan and includes any portion of the contracted rate for which the patient is responsible under the patient's health benefit plan. Amended §21.2802 also defines "batch submission" to be consistent with the usage of that term in federal standardized electronic health care transactions.

The adopted amendments to §21.2807 provide that a carrier may not deny or refuse to process a clean electronic claim because the claim is submitted together with, or in a batch submission with, claims that are deficient and clarify that the requirement to process an electronic clean claim exists when the carrier receives the claim despite the claim being included among other claims that may or may not be clean. In addition, the adopted amendments substitute general references for the more specific references to other rules in this title which will reduce the need for frequent updating and revisions. Section 21.2815 as adopted includes amendments to the examples of penalty calculations for failure to meet the statutory claims payment period as specified in Insurance Code §§1301.105 and 843.338. These amendments clarify the methodology for calculating a penalty when applicable patient financial responsibility under the terms of the health care plan is taken into consideration. The amendments clarify that the contracted rate is the total amount the provider is due under the terms of the provider contract and includes patient financial responsibility for any portion of that amount. The adopted amendments also include an additional example in §21.2815(e) for calculating a penalty for claims that are subject to coordination of benefits for multiple carriers. The amendment indicates that the overall percentage of the claim owed by the secondary carrier will impact the penalty calculations such that the contracted rate and billed charges amounts are both reduced to be consistent with the secondary carrier’s obligation on the claim. The adopted amendments to §21.2821 change the deadline for the annual reporting requirement for the number of declinations of requests for verification and clarify the time period for which reporting is required.

§21.2802. Definitions: "Batch submission." Comment: Commenters support the department’s proposed definition, with one commenter noting that it is consistent with the term as applied to federal standardized health care transactions.

Agency Response: The department appreciates the supportive comments.

"Patient responsibility."

Comment: A commenter asks that the term "patient responsibility" as defined in proposed §21.2802(18) be changed to "patient financial responsibility" to be consistent with how the term is utilized in the rules.

Agency Response: The department agrees and has made the requested change.

Comment: Commenters ask that the definition take into account the various types of out-of-pocket expenses for which the patient may be responsible under the terms of the insurance contract or evidence of coverage. Another commenter opined that the definition appears to allow physicians and providers to balance bill patients.

Agency Response: At this time, the department declines to identify by rule particular types of cost-sharing mechanisms, such as copayments, deductibles, etc., to avoid any confusion due to the various methods in which health plans may treat these charges in relation to the provider’s contracted rate. Some carriers include all of a patient’s out-of-pocket expenses in the contracted rate. Others do not. For example, some plans treat the copayment requirements as an amount in addition to the contracted rate. Therefore, if a carrier and provider have agreed to a $100 contracted rate for a particular service, the patient’s $20 copayment will result in the provider receiving $120 for a service that is contracted for $100. The distinction the definition seeks to make is that only those patient financial responsibility amounts that are included as a portion of the amount agreed to between the provider and the carrier (the contracted rate) should be included in the penalty calculation. To include a list of particular types of cost-sharing mechanisms that may be treated differently by carriers is not helpful in making the distinction necessary for appropriate application of the definition of patient financial responsibility. The language in the definition does not affect a provider’s responsibilities or rights regarding whether patients may be billed for any balance after receipt of the carrier’s payment.

Comment: One commenter states the opinion that the proposed definition may lead to confusion that a provider’s agreed or contracted rate imposes financial responsibility on a patient. Another commenter notes that the patient financial responsibility amount is the amount the patient is required to pay for covered services pursuant to the policy or evidence of coverage, but it is not an amount that is part of the contracted rate.

Agency Response: The department agrees with the commenters that the patient’s coverage document establishes a patient’s financial responsibility through the use of particular cost-sharing mechanisms such as deductibles, copayments or coinsurance percentages. The contracted rate, however, does play a part in the calculation of the amount due from the patient when coinsurance percentages are involved. Nonetheless, the department has revised the definition to clarify that patient financial responsibility is a function of the coverage agreement rather than the provider contract.

§21.2807(d). Responsibility for batch submissions. Comment: A commenter opines that the reference to clearinghouses in SB 50 permits the department to directly regulate clearinghouses and other agents of carriers. The commenter suggests that subsection (d) be revised to include a reference to a carrier’s "agent" and that the department include an express statement on this issue in its response to comments.

Agency Response: The department does not believe that SB 50 provides broad and comprehensive regulatory authority over clearinghouses or other agents of carriers not specifically subject to a statutory licensure or certification requirement. Nonetheless, the department’s direct regulation of carriers and applicable prompt pay requirements operates to affect entities performing on behalf of carriers. For this reason, the department continues to look to carriers as the parties ultimately responsible for compliance with the requirements of the statute and this subchapter. The department thus declines to make the requested change.

§21.2815(b)(1), (d), and (e). Penalty calculations.

Comment: Commenters state that some contracts between carriers and providers prohibit the collection of patient deductibles or co-insurance until after the carrier adjudicates the claim and issues an explanation of benefits. The commenters assert that in such a situation, a carrier’s initial payment miscalculation prevents the provider from collecting the correct payment from the patient until the carrier corrects the error and issues a corrected explanation of benefits. Because the carrier’s initial miscalculation caused the delay of correct payment by the patient, the commenters ask that the penalty calculation account for those amounts the provider is delayed in collecting. Another commenter argues that patient responsibility amounts should be included in the penalty calculation against the carrier because providers have difficulty in confirming patient responsibility amounts due to the fact that deductibles may be met at any time after the initial provision of the services for which the carrier makes an initial underpayment, thus changing the calculation without notice to the provider.

Agency Response: It is the department's position that the statute does not support the requested revision. While the department recognizes providers do not always have the most current information regarding patient financial responsibility amounts, the statutory framework in Insurance Code §§843.342 and 1301.137 penalizes a carrier for failure to timely and correctly pay only its portion of the claim by requiring the carrier to "pay a penalty on the balance of the claim." The department interprets "the balance of the claim," as used in the statute, to include only those amounts due from but not initially paid by the carrier. This is reinforced by the fact that the date "the balance of the claim is paid" determines whether the carrier will pay 50% or 100% of the underpaid amount as a penalty. If "the balance of the claim" were to include amounts the provider was delayed in collecting from the patient, the carrier’s penalty payment responsibilities would be tied to the date the patient paid any applicable patient financial responsibility amounts. Such a result would potentially penalize a carrier based on lack of payment by the patient, which is outside the carrier’s control. Therefore, the "balance of the claim" must be understood to be the balance of the claim owed by the carrier and a penalty that includes any amounts that the patient must pay is not a "penalty on the balance of the claim."

Comment: A commenter expresses appreciation for the department’s desire to clarify the appropriate method of calculating both late payment and underpayment penalties and could support the proposed language provided that the department changes the definition for patient financial responsibility. The commenter suggests that the definition reflect that it is the amount that the patient is required to pay for certain covered health services and may be either a set dollar amount in the form of a deductible or copayment or a percentage of eligible expenses in the form of a coinsurance as set forth in a patient’s certificate of coverage or insurance policy.

Agency Response: The department appreciates the commenter’s support and believes that the adopted definition of "patient financial responsibility" is broad enough to address the commenter’s concern.

§21.2815(e). Penalty calculations and coordination of benefits. Comment: A commenter notes that secondary carriers often base their responsibility for a claim on their contracted rate rather than on the primary carrier’s contracted rate. Thus, when the primary carrier’s allowable amount is more than the secondary carrier’s allowable amount, the secondary carrier makes no additional payment. The commenter asks that the rule include additional examples demonstrating how to calculate a penalty in situations in which the secondary payer’s contracted rate is more than the primary payer’s rate and the secondary payer’s contracted rate is less than the primary payer’s rate.

Agency Response: The department has added language to the example in §21.2815(e) to adequately demonstrate how the secondary carrier should calculate penalties for its proportionate responsibility for a claim. The rule establishes the primary carrier’s contracted rate as the entire claim amount. Any amount owed by the secondary carrier is a percentage of that amount and this percentage is used to calculate the secondary carrier’s penalty.

The department declines to include additional examples based upon the contracted rate of the secondary carrier. Such examples, which would demonstrate a secondary carrier’s responsibility for the unpaid portion of the claim, are not appropriate for this rule. A secondary carrier’s payment responsibilities are dictated by the coordination of benefits language in the coverage document between the secondary carrier and the patient.

§21.2821(e). Verification reporting requirement.

Comments: A commenter agrees with the proposed language that makes the reporting date consistent with the existing dates for quarterly reporting of claims data.

Agency Response: The department appreciates the supportive comment.

For: None.

For with changes: America’s Health Insurance Plans, Texas Association of Health Plans, Texas Hospital Association.

Against: Seton Healthcare Network, Texas Medical Association.

The amendments are adopted under Insurance Code §§1301.007, 1301.103, 1301.137, 1212.001 - 1212.003, 843.151, 843.338, 843.342, and 36.001. Section 1301.007 authorizes the Commissioner to adopt rules necessary to implement Insurance Code Title 8 Chapter 1301, which regulates preferred provider benefit plans, and to ensure reasonable accessibility and availability of preferred provider benefits and basic level benefits to residents of this state. Section 843.151 authorizes the Commissioner to adopt reasonable rules as necessary and proper to implement Insurance Code Title 6 Chapter 843 and Chapter 20A, which regulate health maintenance organizations. Sections 1301.103 and 843.338 require carriers to pay clean claims upon receipt and within the statutory claims payment period. Sections 1301.137 and 843.342 provide for the calculation of penalties for violations of prompt pay requirements. Sections 1212.001 and 1212.002 create the Technical Advisory Committee on Claims Processing (TACCP) to advise the commissioner on claims processing, payment and adjudication. Section 1212.003 requires the TACCP to submit a biennial report to the legislature concerning the activities of the committee. The reporting requirements in this subchapter are necessary to provide information to the TACCP in fulfilling its statutory role. Section 36.001 provides that the Commissioner of Insurance may adopt any rules necessary and appropriate to implement the powers and duties of the Texas Department of Insurance under the Insurance Code and other laws of this state.

§21.2802.Definitions.

The following words and terms when used in this subchapter shall have the following meanings:

(1) Audit--A procedure authorized and described in §21.2809 of this title (relating to Audit Procedures) under which an HMO or preferred provider carrier may investigate a claim beyond the statutory claims payment period without incurring penalties under §21.2815 of this title (relating to Failure to Meet the Statutory Claims Payment Period).

(2) Batch submission--A group of electronic claims submitted for processing at the same time within a HIPAA standard ASC X12N 837 Transaction Set and identified by a batch control number.

(3) Billed charges--The charges for medical care or health care services included on a claim submitted by a physician or provider. For purposes of this subchapter, billed charges must comply with all other applicable requirements of law, including Texas Health and Safety Code §311.0025, Texas Occupations Code §105.002, and Texas Insurance Code Art. 21.79F.

(4) CMS--The Centers for Medicare and Medicaid Services of the U.S. Department of Health and Human Services.

(5) Catastrophic event--An event, including acts of God, civil or military authority, acts of public enemy, war, accidents, fires, explosions, earthquake, windstorm, flood or organized labor stoppages, that cannot reasonably be controlled or avoided and that causes an interruption in the claims submission or processing activities of an entity for more than two consecutive business days.

(6) Clean claim--

(A) For non-electronic claims, a claim submitted by a physician or provider for medical care or health care services rendered to an enrollee under a health care plan or to an insured under a health insurance policy that includes:

(i) the required data elements set forth in §21.2803(b) or (c) of this title (relating to Elements of a Clean Claim); and

(ii) if applicable, the amount paid by the primary plan or other valid coverage pursuant to §21.2803(d) of this title (relating to Elements of a Clean Claim);

(B) For electronic claims, a claim submitted by a physician or provider for medical care or health care services rendered to an enrollee under a health care plan or to an insured under a health insurance policy using the ASC X12N 837 format and in compliance with all applicable federal laws related to electronic health care claims, including applicable implementation guides, companion guides and trading partner agreements.

(7) Condition code--The code utilized by CMS to identify conditions that may affect processing of the claim.

(8) Contracted rate--Fee or reimbursement amount for a preferred provider's services, treatments, or supplies as established by agreement between the preferred provider and the HMO or preferred provider carrier.

(9) Corrected claim--A claim containing clarifying or additional information necessary to correct a previously submitted claim.

(10) Deficient claim--A submitted claim that does not comply with the requirements of §21.2803(b), (c) or (e) of this title.

(11) Diagnosis code--Numeric or alphanumeric codes from the International Classification of Diseases (ICD-9-CM), Diagnostic and Statistical Manual (DSM-IV), or their successors, valid at the time of service.

(12) Duplicate claim--Any claim submitted by a physician or provider for the same health care service provided to a particular individual on a particular date of service that was included in a previously submitted claim. The term does not include corrected claims, or claims submitted by a physician or provider at the request of the HMO or preferred provider carrier.

(13) HMO--A health maintenance organization as defined by Insurance Code §843.002(14).

(14) HMO delivery network--As defined by Insurance Code §843.002(15).

(15) Institutional provider--An institution providing health care services, including but not limited to hospitals, other licensed inpatient centers, ambulatory surgical centers, skilled nursing centers and residential treatment centers.

(16) Occurrence span code--The code utilized by CMS to define a specific event relating to the billing period.

(17) Patient control number--A unique alphanumeric identifier assigned by the institutional provider to facilitate retrieval of individual financial records and posting of payment.

(18) Patient financial responsibility--Any portion of the contracted rate for which the patient is responsible pursuant to the terms of the patient’s health benefit plan.

(19) Patient-status-at-discharge code--The code utilized by CMS to indicate the patient's status at time of discharge or billing.

(20) Physician--Anyone licensed to practice medicine in this state.

(21) Place of service code--The codes utilized by CMS that identify the place at which the service was rendered.

(22) Preferred provider--

(A) with regard to a preferred provider carrier, a preferred provider as defined by Insurance Code Article 3.70-3C, §1(10) (Preferred Provider Benefit Plans) or Article 3.70-3C, §1(1) (Use of Advanced Practice Nurses and Physician Assistants by Preferred Provider Plans).

(B) with regard to an HMO,

(i) a physician, as defined by Insurance Code §843.002(22), who is a member of that HMO's delivery network; or

(ii) a provider, as defined by Insurance Code §843.002(24), who is a member of that HMO's delivery network.

(23) Preferred provider carrier--An insurer that issues a preferred provider benefit plan as provided by Insurance Code Article 3.70-3C, Section 2 (Preferred Provider Benefit Plans).

(24) Primary plan--As defined in §3.3506 of this title (relating to Use of the Terms "Plan," "Primary Plan," "Secondary Plan," and "This Plan" in Policies, Certificates and Contracts).

(25) Procedure code--Any alphanumeric code representing a service or treatment that is part of a medical code set that is adopted by CMS as required by federal statute and valid at the time of service. In the absence of an existing federal code, and for non-electronic claims only, this definition may also include local codes developed specifically by Medicaid, Medicare, an HMO, or a preferred provider carrier to describe a specific service or procedure.

(26) Provider--Any practitioner, institutional provider, or other person or organization that furnishes health care services and that is licensed or otherwise authorized to practice in this state, other than a physician.

(27) Revenue code--The code assigned by CMS to each cost center for which a separate charge is billed.

(28) Secondary plan--As defined in §3.3506 of this title.

(29) Source of admission code--The code utilized by CMS to indicate the source of an inpatient admission.

(30) Statutory claims payment period--

(A) the 45-calendar-day period in which an HMO or preferred provider carrier shall make claim payment or denial, in whole or in part, after receipt of a non-electronic clean claim pursuant to Insurance Code Article 3.70-3C, §3A (Preferred Provider Benefit Plans) and Chapter 843;

(B) the 30-calendar-day period in which an HMO or preferred provider carrier shall make claim payment or denial, in whole or in part, after receipt of an electronically submitted clean claim pursuant to Insurance Code Article 3.70-3C, §3A (Preferred Provider Benefit Plans) and Chapter 843; or

(C) the 21-calendar-day period in which an HMO or preferred provider carrier shall make claim payment after affirmative adjudication of an electronically submitted clean claim for a prescription benefit pursuant to Insurance Code Article 3.70-3C, §3A(f) (Preferred Provider Benefit Plans) and §843.339, and §21.2814 of this title (relating to Electronic Adjudication of Prescription Benefits).

(31) Subscriber--If individual coverage, the individual who is the contract holder and is responsible for payment of premiums to the HMO or preferred provider carrier; or if group coverage, the individual who is the certificate holder and whose employment or other membership status, except for family dependency, is the basis for eligibility for enrollment in a group health benefit plan issued by the HMO or the preferred provider carrier.

(32) Type of bill code--The three-digit alphanumeric code utilized by CMS to identify the type of facility, the type of care, and the sequence of the bill in a particular episode of care.

§21.2815.Failure to Meet the Statutory Claims Payment Period.

(a) An HMO or preferred provider carrier that determines under §21.2807 of this title (relating to Effect of Filing a Clean Claim) that a claim is payable shall:

(1) if the claim is paid on or before the 45th day after the end of the applicable 21-, 30- or 45-day statutory claims payment period, pay to the preferred provider, in addition to the contracted rate owed on the claim, a penalty in the amount of the lesser of:

(A) 50% of the difference between the billed charges and the contracted rate; or

(B) $100,000.

(2) If the claim is paid on or after the 46th day and before the 91st day after the end of the applicable 21-, 30- or 45-day statutory claims payment period, pay to the preferred provider, in addition to the contracted rate owed on the claim, a penalty in the amount of the lesser of:

(A) 100% of the difference between the billed charges and the contracted rate; or

(B) $200,000.

(3) If the claim is paid on or after the 91st day after the end of the applicable 21-, 30- or 45-day statutory claims payment period, pay to the preferred provider, in addition to the contracted rate owed on the claim, a penalty computed under paragraph (2) of this subsection plus 18% annual interest on the penalty amount. Interest under this subsection accrues beginning on the date the HMO or preferred provider carrier was required to pay the claim and ending on the date the claim and the penalty are paid in full.

(b) The following examples demonstrate how to calculate penalty amounts under subsection (a) of this section:

(1) If the contracted rate, including any patient financial responsibility, is $10,000 and the billed charges are $15,000, and the HMO or preferred provider carrier pays the claim on or before the 45th day after the end of the applicable statutory claims payment period, the HMO or preferred provider carrier shall pay, in addition to the amount owed on the claim, 50% of the difference between the billed charges ($15,000) and the contracted rate ($10,000) or $2,500. The basis for the penalty is the difference between the total contracted amount, including any patient financial responsibility, and the provider’s billed charges;

(2) if the claim is paid on or after the 46th day and before the 91st day after the end of the applicable statutory claims payment period, the HMO or preferred provider carrier shall pay, in addition to the contracted rate owed on the claim, 100% of the difference between the billed charges and the contracted rate or $5,000; and

(3) if the claim is paid on or after the 91st day after the end of the applicable statutory claims payment period, the HMO or preferred provider carrier shall pay, in addition to the contracted rate owed on the claim, $5,000, plus 18% annual interest on the $5,000 penalty amount accruing from the statutory claim payment deadline.

(c) Except as provided by this section, an HMO or preferred provider carrier that determines under §21.2807 of this title that a claim is payable, pays only a portion of the amount of the claim on or before the end of the applicable 21-, 30- or 45-day statutory claims payment period, and pays the balance of the contracted rate owed for the claim after that date shall:

(1) If the balance of the claim is paid on or before the 45th day after the applicable 21-, 30- or 45-day statutory claims payment period, pay to the preferred provider, in addition to the contracted amount owed, a penalty on the amount not timely paid in the amount of the lesser of:

(A) 50% of the underpaid amount; or

(B) $100,000.

(2) If the balance of the claim is paid on or after the 46th day and before the 91st day after the end of the applicable 21-, 30- or 45-day statutory claims payment period, pay to the preferred provider, in addition to the contracted amount owed, a penalty in the amount of the lesser of:

(A) 100% of the underpaid amount; or

(B) $200,000.

(3) If the balance of the claim is paid on or after the 91st day after the end of the applicable 21-, 30- or 45-day statutory claims payment period, pay to the preferred provider, in addition to the contracted amount owed, a penalty computed under paragraph (2) of this subsection plus 18% annual interest on the penalty amount. Interest under this subsection accrues beginning on the date the HMO or preferred provider carrier was required to pay the claim and ending on the date the claim and the penalty are paid in full.

(d) For the purposes of subsection (c) of this section, the underpaid amount is calculated on the ratio of the balance owed by the carrier to the total contracted rate, including any patient financial responsibility, as applied to the billed charges. For example, a claim for a contracted rate of $1,000.00 and billed charges of $1,500.00 is initially underpaid at $600.00, with the insured owing $200.00 and the HMO or preferred provider carrier owing a balance of $200.00. The HMO or preferred provider carrier pays the $200.00 balance on the 30th day after the end of the applicable statutory claims payment period. The amount the HMO or preferred provider carrier initially underpaid, $200.00, is 20% of the contracted rate. To determine the penalty, the HMO or preferred provider carrier must calculate 20% of the billed charges, which is $300.00. This amount represents the underpaid amount for subsection (c)(1) of this section. Therefore, the HMO or preferred provider carrier must pay, as a penalty, 50% of $300.00, or $150.00.

(e) For purposes of calculating a penalty when an HMO or preferred provider carrier is a secondary carrier for a claim, the contracted rate and billed charges must be reduced in accordance with the percentage of the entire claim that is owed by the secondary carrier. The following example illustrates this method: Carrier A pays 80% of a claim for a contracted rate of $1,000.00 and billed charges of $1,500.00, leaving $200.00 unpaid as the patient's financial responsibility. The patient has coverage through Carrier B that is secondary and Carrier B will owe the $200.00 balance pursuant to the coordination of benefits provision of Carrier B’s policy. If Carrier B fails to pay the $200.00 within the applicable statutory claims payment period, Carrier B will pay a penalty based on the percentage of the claim that it owed. The contracted rate for Carrier B will therefore be $200.00 (20% of Carrier A’s $1,000.00 contracted rate), and the billed charges will be $300.00 (20% of $1,500.00). Although Carrier B may have a contracted rate with the provider that is different than Carrier A’s contracted rate, it is Carrier A’s contracted rate that establishes the entire claim amount for the purpose of calculating Carrier B’s penalty.

(f) An HMO or preferred provider carrier is not liable for a penalty under this section:

(1) if the failure to pay the claim in accordance with the applicable statutory claims payment period is a result of a catastrophic event that the HMO or preferred provider carrier certified according to the provisions of §21.2819 of this title (relating to Catastrophic Event); or

(2) if the claim was paid in accordance with §21.2807 of this title, but for less than the contracted rate, and:

(A) the preferred provider notifies the HMO or preferred provider carrier of the underpayment after the 180th day after the date the underpayment was received; and

(B) the HMO or preferred provider carrier pays the balance of the claim on or before the 45th day after the date the insurer receives the notice of underpayment.

(g) Subsection (f) of this section does not relieve the HMO or preferred provider carrier of the obligation to pay the remaining unpaid contracted rate owed the preferred provider.

(h) An HMO or preferred provider carrier that pays a penalty under this section shall clearly indicate on the explanation of payment the amount of the contracted rate paid, the amount of the billed charges as submitted by the physician or provider and the amount paid as a penalty. A non-electronic explanation of payment complies with this requirement if it clearly and prominently identifies the notice of the penalty amount.

This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on December 30, 2005.

TRD-200506148

Gene C. Jarmon

General Counsel and Chief Clerk

Texas Department of Insurance

Effective date: January 19, 2006

Proposal publication date: August 5, 2005

For further information, please call: (512) 463-6327

Subchapter DD. ELIGIBILITY STATEMENTS

28 TAC §§21.3801 - 21.3808

The Commissioner of Insurance adopts new Subchapter DD, §§21.3801 - 21.3808, concerning a health benefit plan issuer’s provision of enrollee eligibility statements to participating physicians and providers. Sections 21.3802 - 21.3805 are adopted with changes to the proposed text as published in the August 5, 2005, issue of the Texas Register (30 TexReg 4447). Sections 21.3801 and 21.3806 - 21.3808 are adopted without changes and will not be republished.

SB 1149, passed by the 79th Legislature, Regular Session, enacted Insurance Code Chapter 1274 relating to the transmission of the eligibility and payment status of enrollees of health benefit plans to contracted physicians and providers. These new sections are necessary to implement Chapter 1274, which requires health benefit plan issuers to provide certain enrollee eligibility, benefit, and financial information to participating physicians and providers (hereinafter referred to collectively as "providers"), upon a participating provider’s submission of the patient’s name, the patient’s relationship to the primary enrollee, and the patient's birth date, and certain eligibility, benefit, and financial information related to the enrollee. Consistent with SB 1149, the department consulted with the Technical Advisory Committee on Claims Processing (TACCP) at its June 30, 2005 meeting, and solicited advice prior to initiating the rulemaking process.

The department held a hearing on the proposed rules on September 7, 2005. Prior to the hearing, the department received comments from interested parties. In response to the written comments and comments from the hearing, the department has changed some of the proposed language in the text of the rule as adopted. None of the changes, however, introduce a new subject matter or affect persons in addition to those subject to the proposal as published.

The department also received a comment recommending that the requirements to provide information as set forth in §21.3805(c)(1)(B) - (D) apply only to health benefit plan issuers when the provider needs the information to obtain payment for covered services to be provided to the patient. Because the protection of personal information of enrollees and covered dependents is of prime importance, the department has changed these subparagraphs to require that a health benefit plan issuer provide the name, birth date, and gender of any affected covered dependents only when the provider needs such information to obtain payment for covered services.

Some commenters urged the department to modify the requirement set forth in proposed §21.3806 that a health benefit plan issuer automatically provide a written explanation every time the issuer refuses to provide protected information because such a requirement may impose an undue and unnecessary burden upon the issuer. The rule is consistent with Insurance Code §1274.002(b), which requires that the health benefit plan issuer provide information only to a participating provider authorized under state and federal law to receive personally identifiable information. The requirement that an issuer specify the reasons for its refusal to provide the information is necessary to give the provider an opportunity to determine whether the refusal is justified and to address the issuer’s concerns as applicable. Thus, the requirement allows an issuer to meet its legal obligation to protect personally identifiable information while contemporaneously providing adequate protection against potential abuses of the privacy exception set forth in §21.3806.

The department has modified §21.3802(2)(F) in response to comment to clarify that the definition of "health benefit plan" for purposes of this subchapter does not include Medicare Select, Medicare Advantage, or any successor policies regulated in accordance with federal law. Also in response to comment, the department has added in §21.3802(3)(C) a specific reference to an insurance company offering a preferred provider benefit plan operating under Insurance Code Chapter 1301. This addition is to clarify that such a company is a health benefit plan issuer for purposes of this subchapter.

The department has made minor grammatical and punctuation corrections to proposed §21.3803(a) and (b). The department has corrected a typographical error in §21.3804(c) to clarify that the subsection refers to a request for enrollee benefits submitted under §21.3805(c)(2)(B).

Section 21.3806 provides that a health benefit plan issuer may refuse to provide all or a portion of an eligibility statement if applicable privacy laws prevent disclosure. Section 21.3806 also requires the health benefit plan issuer, upon refusing to provide an eligibility statement, to describe the reason(s) for refusing to provide the information. The section further requires that within three days of refusing to provide an eligibility statement, the health benefit plan issuer must also provide a written explanation of the reason(s) for refusal and identify the applicable law(s) that prevent disclosure. Section 21.3807 specifies that an eligibility statement is not a verification under §19.1724 of this title. Section 21.3808 contains a severability provision.

§21.3802. Definitions of "health benefit plan" and "health benefit plan issuer." Comment: Some commenters express concern that these definitions do not clearly indicate that the provisions of Subchapter DD apply to preferred provider benefit plans.

Agency Response: While the department's position is that the general language referencing "insurance companies" in proposed §21.3802(3)(C) includes insurers issuing preferred provider benefit plans, the department has added a specific reference in the definition of "health benefit plan issuers" to clarify the rule’s applicability to an insurance company offering preferred provider benefit plans. Because a preferred provider benefit plan is an insurance policy as set forth in the definition of "health benefit plan" in proposed §21.3802(2), a change to the definition of that term is unnecessary.

Comment: A commenter requests that the definition of "health benefit plan" exclude Medicare Advantage plans and any successor plans that may be developed for the Medicare Program in the future.

Agency Response: The department agrees and has modified §21.3802(2)(F) to exclude Medicare Advantage or any successor policies regulated by federal law.

§21.3802. Definition of "participating provider."

Comment: A commenter believes that the definition of "participating provider" should be expressly limited to new Subchapter DD "to prevent overzealous interpretation by health plans."

Agency Response: The department disagrees that such a change is necessary, as §21.3802 indicates that all of the definitions apply to the words and terms as used in Subchapter DD. Therefore, these definitions do not apply to other subchapters.

§21.3803(b). Method for requesting eligibility statements.

Comment: A commenter expresses concern that the word "may" could lead persons to believe that a plan has discretion regarding acceptance of eligibility statement requests and asks that the word "shall" be used in its place.

Agency Response: The department disagrees that such a change is necessary because §21.3805(a) clearly states that a plan issuer "must" provide an eligibility statement upon receipt of a request. The use of the word "may" in §21.3803(b) relates to the options the plan issuer has in selecting how it may receive requests. Section 21.3803(a), however, requires issuers to communicate to providers the acceptable methods for making such requests.

§21.3804. Requests for eligibility statements.

Comment: A commenter supports the department’s proposed new subsection (b), which limits the information required for inclusion in an eligibility statement request to three elements. Other commenters believe that the department should expand the list of required elements in a request to include all information on a patient’s identification card, if available or, at a minimum, the enrollee’s identification number. The commenters believe that this information will assist the issuer in providing an eligibility statement in an expeditious manner while ensuring accuracy and privacy protection.

Agency Response: The department appreciates the supportive comment regarding the content of an eligibility request. Insurance Code §1274.002 limits the information required for inclusion in a request for an eligibility statement to the three information elements specified in §21.3804(b) and does not include the identification number. Instead, Insurance Code §1274.002 specifically requires that issuers provide the enrollee’s identification number in response to a request. Thus, the statute does not support a requirement that providers include the identification number as part of the initial request. While an issuer may not routinely require additional information, providers may choose to furnish available additional information to enable issuers to identify enrollees’ eligibility information more quickly and accurately.

§21.3805. Requirement to provide eligibility statements

Comment: A commenter notes that the intent of the statute and the rules is for the plan to provide the required information as soon as possible after a phone call from a physician or provider and asks whether the response can be verbal and whether the response must be provided within the plan’s normal business hours.

Agency Response: Insurance Code §1274.002 specifically contemplates telephonic exchanges of eligibility information. Therefore, an issuer may respond verbally to a request for an eligibility statement. Insurance Code §1274.002(a) governs the timeframe for a response to a request for an eligibility statement. An issuer must provide the information in order to allow a provider to determine the patient’s eligibility status at the time of the patient’s visit and must be available to both receive and respond to requests for eligibility statements during the issuer’s normal business hours.

§21.3805(b). Requirement to provide eligibility statements.

Comment: A commenter states that there should be a time limitation on a health benefit plan issuer’s ability to request additional information in response to a request for an eligibility statement and provides some suggested language.

Agency Response: The department agrees that if a plan issuer is initially unable to provide an eligibility statement and requests additional information from the provider, the health benefit plan issuer should provide the initial negative response and the request for additional information within the same time frame as is required for the eligibility statement. The department has changed §21.3805(b) accordingly.

§21.3805(c)(1)(B)-(D). Content of an eligibility statement.

Comment: A commenter recommends that these subparagraphs be contingent upon whether the information is necessary to obtain payment for covered services provided to the patient.

Agency Response: The department agrees and has changed the subparagraphs accordingly. The changes limit an issuer’s obligation to provide information regarding covered dependents to only those circumstances when provision of the eligibility information is necessary to obtain payment for services to be rendered. Incorporating a "minimum necessary standard" into this section is consistent with the HIPAA Privacy Regulation at 42 C.F.R. §164.502(b), and will effectively limit the burden on an issuer to provide an explanation regarding applicable privacy laws as set forth in §21.3806.

§21.3805(c)(2)(A). Content of an eligibility statement.

Comment: A commenter asks whether the obligation to provide individual excluded benefits or limitations requires the plan to provide the enrollee’s individual personal information that is provided to an employer for group coverage. Because SB 1149 applies only to group policies, the commenter seeks clarification as to the type of information that is being requested for individuals.

Agency Response: In the context of §21.3805(c)(2)(A), the term "group" refers to an exclusion that is applicable to all persons covered under the group policy, and the term "individual" refers to any exclusion that applies to an individual enrollee, such as a preexisting condition exclusion.

§21.3806. Privacy issues.

Comment: A commenter requests that the department modify the section on privacy issues to require health benefit plan issuers to obtain whatever authorization is necessary under applicable federal and state law to disclose a complete eligibility statement to a requesting physician or provider or strike the section in its entirety. Another commenter requests that the department caution carriers against pretext refusals and remind carriers that HIPAA privacy standards may not provide a blanket rationale for denial of eligibility statements. Other commenters believe that the requirement that issuers provide a written explanation every time they refuse to provide protected health information (e.g., name, birth date, and gender of other covered individuals) to a requesting physician or provider is unduly burdensome and unnecessary. These commenters request that such an explanation be required only upon a physician or provider’s request.

Agency Response: The department disagrees that the rule requires the plan issuer to obtain an authorization to disclose the requested information. Section 21.3806 is consistent with Insurance Code §1274.002(b), which states that the plan issuer must provide the information "only to a participating provider who is authorized under state and federal law to receive personally identifiable information." SB 1149 does not contain a provision that requires the health plan issuer to obtain any authorization. In addition, the rule requires a health plan issuer that refuses to provide information to specify the reasons for refusing to provide the information. The department believes that the requirement that issuers provide a written explanation of the reasons for refusing to provide certain eligibility information is necessary to ensure that requesting physicians and providers have an opportunity to evaluate and address any identified privacy concerns and also to protect against potential abuses of the privacy exception. The department believes that this requirement allows an issuer to meet its legal obligation to protect personally identifiable information while at the same time providing adequate protection against such potential abuses. To ensure that these goals are met, issuers must provide such explanations whenever they are unable to provide the requested information, rather than only upon request. In addition, it is important to note that adopted §21.3805(c) specifies that the name, birth date, and gender of other covered individuals are required as part of an eligibility statement only if the information is necessary to obtain payment for covered services. Because an issuer will not have to provide an explanation for every request, the requirement should not be unduly burdensome.

For: None.

For with changes: America’s Health Insurance Plans, Texas Association of Health Plans, Texas Association of Life and Health Insurers, and Texas Medical Association. Against: Texas Hospital Association.

The new sections are adopted under Insurance Code Chapter 1274 and §36.001. Chapter 1274 requires health benefit plan issuers to provide statutorily specified enrollee eligibility statements to participating providers upon request, and §1274.004 requires the Commissioner of Insurance to adopt rules as necessary to implement the chapter. Section 1274.005 provides that if the Commissioner, in consultation with the Commissioner of Health and Human Services, determines that a provision of §1274.002 will cause a negative fiscal impact on the state with respect to providing benefits or services under Subchapter XIX, Social Security Act (42 U.S.C. Section 1396 et seq.), or Subchapter XXI, Social Security Act (42 U.S.C. Section 1397aa et seq.), the Commissioner of Insurance by rule shall waive the application of that provision to the providing of those benefits or services. Section 36.001 provides that the Commissioner of Insurance may adopt any rules necessary and appropriate to implement the powers and duties of the Texas Department of Insurance under the Insurance Code and other laws of this state.

§21.3802.Definitions.

The following words and terms, when used in this subchapter, shall have the following meanings unless the context clearly indicates otherwise.

(1) Enrollee--An individual who is eligible for coverage under a health benefit plan, including a covered dependent.

(2) Health benefit plan--A group, blanket, or franchise insurance policy, a certificate issued under a group policy, a group hospital service contract, or a group subscriber contract or evidence of coverage issued by a health maintenance organization that provides benefits for health care services. The term does not include:

(A) accident-only or disability income insurance coverage or a combination of accident-only and disability income insurance coverage;

(B) credit-only insurance coverage;

(D) coverage only for a specified disease or illness;

(E) Medicare services under a federal contract;

(F) Medicare supplement, Medicare Select, Medicare Advantage, or any successor policies regulated in accordance with federal law;

(G) long-term care coverage or benefits, nursing home care coverage or benefits, home health care coverage or benefits, community-based care coverage or benefits, or any combination of those coverages or benefits;

(H) coverage that provides only dental or vision benefits;

(I) coverage provided by a single service health maintenance organization;

(J) coverage issued as a supplement to liability insurance;

(K) workers' compensation insurance coverage or similar insurance coverage;

(L) automobile medical payment insurance coverage;

(M) a jointly managed trust authorized under 29 U.S.C. Section 141 et seq. that contains a plan of benefits for employees that is negotiated in a collective bargaining agreement governing wages, hours, and working conditions of the employees that is authorized under 29 U.S.C. Section 157;

(N) hospital indemnity or other fixed indemnity insurance coverage;

(O) reinsurance contracts issued on a stop-loss, quota-share, or similar basis;

(P) liability insurance coverage, including general liability insurance and automobile liability insurance coverage; or

(Q) coverage that provides other limited benefits specified by federal regulations.

(3) Health benefit plan issuer--Any entity that issues a health benefit plan, including:

(A) a health maintenance organization operating under Insurance Code Chapter 843;

(B) an approved nonprofit health corporation that holds a certificate of authority under Insurance Code Chapter 844;

(C) an insurance company, including an insurance company offering a preferred provider benefit plan under Insurance Code Chapter 1301;

(D) a group hospital service corporation operating under Insurance Code Chapter 842;

(E) a fraternal benefit society operating under Insurance Code Chapter 885; or

(F) a stipulated premium company operating under Insurance Code Chapter 884.

(4) Health care provider--

(A) a person, other than a physician, who is licensed or otherwise authorized to provide a health care service in this state, including:

(i) a pharmacist or dentist; or

(ii) a pharmacy, hospital, or other institution or organization;

(B) a person who is wholly owned or controlled by a provider or by a group of providers who are licensed or otherwise authorized to provide the same health care service; or

(C) a person who is wholly owned or controlled by one or more hospitals and physicians, including a physician-hospital organization.

(5) Participating provider--

(A) a physician or health care provider who contracts with a health benefit plan issuer to provide medical care or health care to enrollees in a health benefit plan; or

(B) a physician or health care provider who accepts and treats a patient on a referral from a physician or provider described by subparagraph (A) of this paragraph.

(6) Physician--

(A) an individual licensed to practice medicine in this state under Subtitle B, Title 3, Occupations Code;

(B) a professional association organized under the Texas Professional Association Act (Article 1528f, Vernon's Texas Civil Statutes);

(D) a medical school or medical and dental unit, as defined or described by §§61.003, 61.501, or 74.601, Education Code, that employs or contracts with physicians to teach or provide medical services or employs physicians and contracts with physicians in a practice plan; or

(E) another entity wholly owned by physicians.

(7) Primary enrollee--The individual who is the certificate holder and whose employment or other membership status, except for family dependency, is the basis for eligibility under the health benefit plan.

§21.3803.Method for Requesting Eligibility Statements.

(a) Beginning January 31, 2006, a health benefit plan issuer shall, in writing, communicate to each participating provider that enters into or renews a contract with the health benefit plan issuer, the method or methods by which the provider may request an eligibility statement. The health benefit plan issuer may communicate the method or methods a provider may use to request an eligibility statement in existing materials, such as a provider manual, so long as the information is clearly identified and properly captioned with an underlined, bold-faced, or otherwise conspicuous heading.

(b) A health benefit plan issuer may accept a request for an eligibility statement by:

(1) telephone;

(2) Internet website portal; or

(3) other electronic means.

§21.3804.Requests for Eligibility Statements.

(a) A participating provider may, prior to providing services to an enrollee, request an eligibility statement using a method designated by the health benefit plan issuer.

(b) A request under subsection (a) of this section must include:

(1) the enrollee’s full name;

(2) the enrollee’s relationship to the primary enrollee; and

(3) the enrollee’s birth date.

(c) If the participating provider is seeking information concerning the enrollee’s benefits under §21.3805(c)(2)(B) of this subchapter (relating to Requirement to Provide Eligibility Statements), the request must also include a description of the specific type or category of service.

§21.3805.Requirement to Provide Eligibility Statements.

(a) A health benefit plan issuer shall maintain a system to enable it to provide eligibility statements to participating providers using the information provided under §21.3804(b) and (c) of this subchapter (relating to Requests for Eligibility Statements). On receipt of a request for an eligibility statement that complies with §21.3804 of this subchapter, a health benefit plan issuer must provide an eligibility statement to the participating provider allowing the provider access to the information at the time of the enrollee’s visit.

(b) If the health benefit plan issuer is unable to provide an eligibility statement, the health benefit plan issuer shall notify the participating provider such that the provider receives the response at the time of the patient’s visit and may contemporaneously request additional information to assist the health benefit plan issuer in providing an eligibility statement. A health benefit plan issuer may not use a request for additional information to satisfy the requirement that the issuer maintain a system to provide eligibility statements using the information described in §21.3804(b) and (c) of this subchapter.

(c) An eligibility statement provided under this section shall include information that will enable the participating provider to determine at the time of the request:

(1) the enrollee’s identification and eligibility under the health benefit plan, including:

(A) the enrollee's identification number assigned by the health benefit plan issuer;

(B) the name of the enrollee and, if necessary to obtain payment for services to be provided to the patient, the names of any affected covered dependents;

(C) the birth date of the enrollee and, if necessary to obtain payment for services to be provided to the patient, the birth dates of any affected covered dependents;

(D) the gender of the enrollee and, if necessary to obtain payment for services to be provided to the patient, the gender of any affected covered dependent; and

(E) the current enrollment and eligibility status of the enrollee under the health benefit plan;

(2) the enrollee's benefits, including:

(A) excluded benefits or limitations, both group and individual; and

(B) if the participating provider included the information required by §21.3804(c) of this subchapter, whether the specific type or category of service is a benefit under the policy; and

(3) the enrollee's financial information, including:

(A) copayment requirements, if any; and

(B) the unmet amount of the enrollee's deductible or enrollee financial responsibility.

(d) The information required to be provided under this section is limited to information in the possession of and maintained by the health benefit plan issuer in the ordinary course of business at the time of a request for an eligibility statement.

(e) A health benefit plan issuer may not directly or indirectly charge a participating provider for an eligibility statement.

This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on December 30, 2005.

TRD-200506147

Gene C. Jarmon

General Counsel and Chief Clerk

Texas Department of Insurance

Effective date: January 19, 2006

Proposal publication date: August 5, 2005

For further information, please call: (512) 463-6327