Office of the Attorney General, 112618 TXAGO, AGO RQ-256-KP

Case DateNovember 26, 2018
CourtTexas
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...

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