The Texas Department of Insurance (TDI) is the state agency responsible for overseeing and enforcing the Prompt Payment rules and procedures. SB418 is the current prompt pay/clean claims law effective for contracts that were new or renewed on or after August 16, 2003. For answers to Frequently Asked Questions concerning the Prompt Pay rules... For other Physician & Health Providers Resources...
(Claims that were processed before SB418 became effective would fall under the older HB610 ruling.)
In general, the SB418 prompt pay law applies to fully-insured HMO and PPO products licensed and sold in Texas. It does not apply to other plans, i.e., Medicare, Medicaid, Workers' Compensation, TriCare, self-funded employer ERISA plans, state and federal employee plans, indemnity policies, and out-of-state Blue Cross plans filed to Blue Cross and Blue Shield of Texas. Your patient's health plan identification card will indicate if the plan is fully-insured and regulated by TDI or not. Plans that are self-funded by the employer are not 'insurance' but are considered an employee benefit and fall under the jurisdication of the federal Department of Labor. (For those plans for which the prompt pay rules do not apply, check your contract with the carrier for the claims processing and payment arrangements.)
The SB418 rules define a 'clean claim' and also contain provisions concerning preauthorization and verification of medical services, which shorten the time in which carriers must respond, and streamline the process for requesting verifications. Timely claim submission and payment requirements are also defined, as well as overpayment/recoupment requirements. An additional provision of great benefit to physicians is the requirement that, upon written request, a carrier must disclose information such as fee schedules to its contracted physician.
'Verification for guarantee of payment ' is a defined term that is different than either a request for preauthorization of treatment, or a routine request for information about a patient's coverage/eligibility and a description of the insurance benefits. For a 'verification for guarantee of payment,' certain required elements about the patient and the proposed procedures to be performed must be given to the carrier. The carrier may request additional information and then have a certain amount of time/days to either issue a verification for guarantee or decline to issue one. Although a request for 'verification for guarantee of payment' would not be practical for routine office visits, it would be especially useful for patient care involving scheduled surgery, extensive treatment, or hospitalization.
The disclosure requirement is of real help to physicians. The carrier must disclose certain information, including fee schedules, to contracted physicians who request such information. The carrier must furnish claims payment information at a level of detail sufficient to determine the payment to be made in accordance with the contract. This provision also requires a carrier to give a 90-day advance written notice to the physician of an amendment to the contract. Retroactive changes to the contract are no longer allowed.
The links below provide detailed information about the prompt pay rules.
Does this patient's health plan fall under prompt pay rules?
Applicability of rules - to determine if the prompt pay rules apply to a particular plan.
Patient identification card - the patient's ID card will indicate if the plan is subject ot prompt pay rules.
Helpful charts and info concerning the prompt pay rules and guidelines:
Submission, Timelines and Prompt Pay of Clean Claims - this chart details the requirements for claims filing, payment periods, requests for addt'l info, audit periods, penalties, overpayments, underpayments, etc. of SB418.
Timelines - a quick-reference chart with the timeframes for claim submissions, payments, penalties, etc.
Frequently Asked Questions - TDI answers your questions concerning the prompt pay rules and requirements.
Penalty payments required by health plans - commissioner's Bulletin #B-0008-05 (Feb 24, 2005) stating health plans must make the required penalty payments to physicians when delays in processing a clean claim have occurred.
How to calculate underpaid amount in prompt pay rules - helpful information from Texas Medical Assocation.
Information requests and prompt pay - How can we show proof we have submitted the information requested by the health plan? HCMS Physician Newsletter, July 2008 issue
What are the procedures and requirements for requesting either a preauthorization or a verification for guarantee of payment? What are the differences between the two?
Verification and Preauthorization Procedures - this chart explains in detail the definitions and differences of each as well as the the requirements and timeframes.
Verification Requirements - chart gives the 13 required elements for requesting a guarantee and the health plan's obligations.
Guarantee of payment from PPOs and HMOs - addt'l info from HCMS Physician Newsletter, April 15, 2007 issue
Verification Form - helpful form for gathering the required info prior to requesting a verification for guarantee of payment. .gif)
Refusal by a health plan to verify for guarantee of payment - commissioner's Bulletin #B-0041-3 (Oct 29, 2003) and Bulletin #B-0042-03 (Oct 29, 2003) concerning a health plan's declination to verify.
What about my request for info concerning the plan's fee schedules and bundling edits? What if I want to terminate with the plan?
Disclosure of fee schedules, bundling edits - commissioner's Bulletin #B-0017-04 (March 30, 2004) concerning the carrier's requirement to disclose requested info.
Provider Contracting Requirements - chart detailing access to information, timeframes, contract termination, etc.
Requesting contracted fee schedules - from HCMS Physician Newsletter, September 15, 2008 issue (also refer to above chart for specific rules.)
What fields of the CMS-1500 (08/05) claim form do I need to complete for the claim to be considered 'clean'?
The Texas Department of Insurance has updated the "submission of clean claims" information to correspond with claim form CMS-1500 (08/05). See Commisioner's Bulletin #B-0030-07 (of July 17, 2007).
Elements of a Clean Claim - the Texas Administrative Code provides a 'field by field' description for CMS-1500 (08/05).
Color-coded CMS-1500 form - a helpful reference indicating the required and conditional fields (from Texas Medical Association).
Texas Administrative Code / Texas Dept of Insurance / Texas Insurance Code
Link to the rules and regulations for 'submission of clean claims' (TAC-Texas Admin Code: Title 28, Part 1, Chapter 21, Subchapter T) (see references below).
Links to TX Dept of Insurance bulletins and rules for physicians.
Link to all insurance statutes (TIC-Texas Insurance Code: for PPO-Chapter 1301; for HMO-Chapter 843) (see references below).
Reference for PPO contracts - application of statutes and rules relating to PPO contracts.
Reference for HMO coverage - application of statutes and rules relating to HMO coverage.
Resources for Self-Funded Plans:
Who regulates self-funded ERISA plans? - HCMS Physician Newsletter, Jan 15, 2007 issue
Appointment of Authorized Representative Form - sample form
Department of Labor - health plans and benefit information
ERISA or TDI? Verify which health plans are exempt from prompt pay laws - from Texas Medical Association