Office of the Attorney General
AGO RQ-256-KP
No. RQ-0256-KP
Texas Attorney General Opinion
November 26, 2018
RECEIVED NOVEMBER 27, 2018 OPINION COMMITTEE
Office
of the Attorney General
Attention:
Opinion Committee
P.O.
Box 12548 | Austin, TX 78711-2548
Via
email to opinion.committee@oag.texas.gov
Re:
Request for opinion on prompt pay statute's application
to out-of-network claims
Dear
General Paxton:
I write
on behalf of a committee of a house of the legislature to
request a written opinion on several questions affecting the
public interest.
Background
The
Texas Prompt Pay Act ("TPPA") is codified in
chapters 1301 and 843 of the Texas Insurance Code, -which
govern preferred provider organizations ("PPOs")
and health maintenance organizations ("HMOs"),
respectively. These provisions are designed to ensure timely
processing and payment of insurance claims by financially
penalizing insurers that fail to meet statutory deadlines.
However, ambiguity in these laws has led to out-of-network
emergency care providers dealing with claims for fully
insured (i.e., non-KRISA) patients that arc paid
long after the TPPA requires, if they are paid at all.
Applicable
Legal Standards
PPOs
The
TPPA applies to a PPO as an "insurer" through the
"insurer's health insurance policy." Tex. Ins.
Conn. Ann. § 1301.0041. PPOs cannot reimburse covered
claims on a discounted fee basis unless the provider has
contracted -with the PPO. Id. § 1301.056.
Provisions relating to prompt payment are included in both
subchapter C and C-1 of chapter 1301, and section
1301.137's penalties are expressly tied to the entirety
of Subchapter C. Id. § 1301.137.
Section
1301.001 distinguishes between "preferred
providers" (those that have contracted with the PPO) and
"out-of-network providers" (those that have not
contracted with the PPO), facially suggesting that the
chapter's prompt payment requirements only apply to...