An Attorney General Opinion (KP-0250) released on May 22 provides that a court would likely find that the deadline provisions in the Texas Insurance Code applicable to Health Maintenance Organizations (“HMOs”) and Preferred Provider Organizations (“PPOs”) relating to prompt payment apply to out-of-network emergency care providers, while the penalty provisions contained do not apply to these claims. The deadlines provided in sections 843.338 and 1301.103 provide timeliness requirements for when an HMO or PPO must pay on an eligible clean claim submitted by a provider. In the case of non-electronic claims, they must be paid “not later than the 45th day” following receipt of the clean claim by the HMO or PPO. In the case of electronic claims, they must be paid within 30 days. Where an HMO or PPO fails to pay an eligible clean claim within the deadline, they must pay “the contracted rate owed on the claim plus a penalty.” See §§843.342(a), 1301.137(a). However, where there is an out-of-network claim, a contracted rate doesn’t exist and prevents the calculation of the penalty contemplated under the statute. As such, the Attorney General provides that “a court would likely conclude that the penalty provisions in sections 843.342 and 1301.137 cannot apply to claims filed by out-of-network emergency care providers pursuant to sections 843.351 or 1301.069.”
The Attorney General agreed with the Department of Insurance view that the “plain language of the statute precludes [Department] rulemaking that would apply the penalties of Sections 1301.137 and 843.342 to out-of-network providers.” The opinion provides that while the Legislature has provided for where penalties are appropriate, a Court may determine that compelling a claim payment as required by the statute is not a penalty. Attorney General Paxton concludes by stating that:
Depending on the circumstances, a court could conclude that a particular enforcement action to compel the claim payment required by statute is not in the nature of a penalty and is within the Department’s authority to implement.
Chapter 843 may be found here.
Chapter 1301 may be found here.