Relating to the submission, payment, and audit of certain claims for and utilization review of health services, including services provided under the Medicaid managed care and child health plan programs.

89(R) HB 4585 - Introduced version - Bill Text

89R7645 SCF-D

By: Spiller

H.B. No. 4585

A BILL TO BE ENTITLED

AN ACT

relating to the submission, payment, and audit of certain claims

for and utilization review of health services, including services

provided under the Medicaid managed care and child health plan

programs.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. The heading to Section 540.0265, Government

Code, as effective April 1, 2025, is amended to read as follows:

Sec. 540.0265.
SUBMISSION AND
[
PROMPT
] PAYMENT OF CLAIMS.

SECTION 2. Section 540.0265, Government Code, as effective

April 1, 2025, is amended by amending Subsection (a) and adding

Subsections (c), (d), (e), and (f) to read as follows:

(a) A contract to which this subchapter applies must require

the contracting Medicaid managed care organization to
determine

whether a claim is payable and
pay a physician or provider for

health care services provided to a recipient under a Medicaid

managed care plan on any
clean
claim for payment the organization

receives [
with documentation reasonably necessary for the

organization to process the claim
]:

(1) not later than:

(A) the 10th day after the date the organization

receives the claim if the claim relates to services a nursing

facility, intermediate care facility, or group home provided;

(B) the 30th day after the date the organization

receives the claim if the claim relates to the provision of

long-term services and supports not subject to Paragraph (A); and

(C) the 45th day after the date the organization

receives the claim if the claim is not subject to Paragraph (A) or

(B); or

(2) within a period, not to exceed 60 days, specified

by a written agreement between the physician or provider and the

organization.

(c)

A contract to which this subchapter applies must require

a contracting Medicaid managed care organization to disclose to a

physician or provider:

(1)

the address, including a physical address, where a

claim is sent for processing;

(2)

the telephone number a physician or provider may

call regarding a question or concern about a claim;

(3)

the name and physical address of any entity to

which the organization has delegated claim payment functions;

(4)

the mailing address, physical address, and

telephone number of any separate claims processing center used to

process claims for specific services; and

(5)

by providing written notice not later than the

61st day before the change, any change to an address, telephone

number, or entity described by Subdivisions (1)-(4).

(d)

A contract to which this subchapter applies must specify

that the contracting Medicaid managed care organization:

(1)

must allow a physician or provider to submit a

claim for payment during a period of not less than 95 days beginning

on the date the service for which the claim is made was provided;

and

(2)

is subject to the applicable penalties prescribed

by Section 1301.137, Insurance Code, if the organization fails to

comply with the payment requirements of this section.

(e) For purposes of this section:

(1)

a claim a physician or provider submits to a

Medicaid managed care organization is considered to be a clean

claim if the claim meets the requirements of Section 1301.131,

Insurance Code, and rules adopted under that section; and

(2)

the organization is considered to be the insurer

and the physician or provider is considered to be the preferred

provider with respect to the application of a provision of Chapter

1301, Insurance Code, to the organization, physician, or provider.

(f)

The provisions required under this section may not be

waived, modified, or voided under a contract to which this

subchapter applies or under a contract between a contracting

Medicaid managed care organization and a physician or provider,

except as provided by Subsection (a)(2).

SECTION 3. Subchapter F, Chapter 540, Government Code, as

effective April 1, 2025, is amended by adding Section 540.02651 to

read as follows:

Sec.

540.02651.

AUDIT OF CLAIM; OVERPAYMENT RECOVERY.

(a)

A contract to which this subchapter applies must require the

contracting Medicaid managed care organization to comply with

Sections 1301.105(b), (c), and (d), 1301.1051, and 1301.132,

Insurance Code.

(b)

For purposes of this section, the contracting Medicaid

managed care organization is considered to be the insurer and the

physician or provider is considered to be the preferred provider

with respect to the application of a provision of Chapter 1301,

Insurance Code, to the organization, physician, or provider.

(c)

The provisions required under this section may not be

waived, modified, or voided under a contract to which this

subchapter applies or under a contract between a contracting

Medicaid managed care organization and a physician or provider.

SECTION 4. Section 540.0267(a), Government Code, as

effective April 1, 2025, is amended to read as follows:

(a) A contract to which this subchapter applies must require

the contracting Medicaid managed care organization to develop,

implement, and maintain a system for tracking and resolving

provider appeals related to claims payment. The system must

include a process that requires:

(1) a tracking mechanism to document the status and

final disposition of each provider's claims payment appeal;

(2) contracting with physicians who are not network

providers and who are of the same or related specialty as the

appealing physician to resolve claims disputes that:

(A) relate to denial on the basis of medical

necessity; and

(B) remain unresolved after a provider appeal;

(3)
contracting with an independent review

organization overseen by the commission to resolve claims disputes

in the manner provided by Subchapter I, Chapter 4201, Insurance

Code, that remain unresolved after an appeal under Subdivision (2),

if applicable;

(4)
the determination of the
independent review

organization
[
physician
] resolving the dispute to be binding on the

organization and provider; and

(5)
[
(4)
] the organization to allow a provider to

initiate an appeal of a claim that has not been paid before the time

prescribed by Section 540.0265(a)(1)(B).

SECTION 5. Subchapter B, Chapter 62, Health and Safety

Code, is amended by adding Section 62.0551 to read as follows:

Sec.

62.0551.

REQUIRED CONTRACT PROVISIONS. (a)

A

contract between the commission and a child health plan provider

under Section 62.155 must include the requirements specified by

Sections 540.0265, 540.02651, and 540.0267, Government Code.

(b)

Sections 540.0265, 540.02651, and 540.0267, Government

Code, apply to a child health plan provider and health care provider

providing health care services under the child health plan in the

same manner and to the same extent those provisions apply to a

Medicaid managed care organization and a physician or provider

under the Medicaid program.

SECTION 6. Section 4201.251, Insurance Code, is amended to

read as follows:

Sec. 4201.251. DELEGATION OF UTILIZATION REVIEW.
(a)
A

utilization review agent may delegate utilization review to

qualified personnel in the hospital or other health care facility

in which the health care services to be reviewed were or are to be

provided. The delegation does not release the agent from the full

responsibility for compliance with this chapter or other applicable

law, including the conduct of those to whom utilization review has

been delegated.

(b)

A utilization review agent may not delegate utilization

review to an artificial intelligence application or other similar

computer software.

SECTION 7. Section 4201.252(a), Insurance Code, is amended

to read as follows:

(a) Personnel employed by or under contract with a

utilization review agent to perform utilization review
:

(1)
must be appropriately trained and qualified and

meet the requirements of this chapter and other applicable law,

including applicable licensing requirements
; and

(2)

may not delegate utilization review to an

artificial intelligence application or other similar computer

software
.

SECTION 8. (a) Sections 540.0265 and 540.0267, Government

Code, as amended by this Act, and Section 540.02651, Government

Code, as added by this Act, apply only to a contract between the

Health and Human Services Commission and a managed care

organization that is entered into or renewed on or after the

effective date of this Act.

(b) To the extent permitted by the terms of the contract,

the Health and Human Services Commission shall seek to amend a

contract entered into before the effective date of this Act with a

managed care organization to comply with Sections 540.0265 and

540.0267, Government Code, as amended by this Act, and Section

540.02651, Government Code, as added by this Act.

SECTION 9. (a) Section 62.0551, Health and Safety Code, as

added by this Act, applies only to a contract between the Health and

Human Services Commission and a child health plan provider under

Chapter 62, Health and Safety Code, that is entered into or renewed

on or after the effective date of this Act.

(b) To the extent permitted by the terms of the contract,

the Health and Human Services Commission shall seek to amend a

contract entered into before the effective date of this Act with a

child health plan provider to comply with Section 62.0551, Health

and Safety Code, as added by this Act.

SECTION 10. The changes to Chapter 4201, Insurance Code, as

amended by this Act, apply only to a health benefit plan delivered,

issued for delivery, or renewed on or after January 1, 2026. A

health benefit plan delivered, issued for delivery, or renewed

before January 1, 2026, is governed by the law as it existed

immediately before the effective date of this Act, and that law is

continued in effect for that purpose.

SECTION 11. If before implementing any provision of this

Act a state agency determines that a waiver or authorization from a

federal agency is necessary for implementation of that provision,

the agency affected by the provision shall request the waiver or

authorization and may delay implementing that provision until the

waiver or authorization is granted.

SECTION 12. This Act takes effect September 1, 2025.