SECTION 370.604. Managed Care Organization Requirements Concerning Out-of-Network Providers

(a) Network adequacy. Each MCO participating in CHIP must offer a network of providers that is sufficient to meet the needs of CHIP members enrolled in the MCO. HHSC uses reports from the MCOs and complaints received from providers and members to monitor MCO members' access to an adequate provider network. Subsection (c) of this section describes the reporting requirements with which an MCO must comply.

(b) MCO requirements concerning treatment of members by out-of-network providers.

(1) An MCO must allow a provider to submit a referral of its member(s) to an out-of-network provider, must timely issue the proper authorization for such referral consistent with managed care contract requirements for authorization of medically necessary services, and must reimburse the out-of-network provider for authorized services provided in accordance with statutory and contractual timeframes when:

(A) CHIP covered services are medically necessary, as described in section 370.4(49) of this chapter (relating to Definitions), and these services are not available through an in-network provider;

(B) a provider currently providing authorized services to the member requests authorization for such services to be provided to the member by an out-of-network provider; and

(C) the authorized services are provided within the time period specified in the MCO's authorization. If the services are not provided within the required time period, the requesting provider must submit a new referral request to the MCO prior to the provision of services.

(2) An MCO may not refuse to reimburse an out-of-network provider for emergency services.

(3) Health care MCO requirements concerning emergency services.

(A) A health care MCO must allow its members to be treated by any emergency services provider for emergency services, and for services to determine if an emergency condition exists. The health care MCO must pay for such services.

(B) A health care MCO may not require an authorization for emergency services or for services to determine if an emergency condition exists.

(C) A health care MCO may not refuse to reimburse an out-of-network provider for post-stabilization care services provided as a result of the MCO's failure to arrange for and authorize a timely transfer of a member.

(4) Dental MCO requirements concerning emergency services.

(A) A dental MCO must allow its members to be treated for covered emergency services provided outside of a hospital or ambulatory surgical center setting and for covered services provided outside of such settings to determine if an emergency condition exists. The dental MCO must pay for such services unless subparagraph (C) of this paragraph specifies otherwise.

(B) A dental MCO may not require an authorization for the services described in subparagraph (A) of this paragraph.

(C) A dental MCO is not responsible for payment of non-capitated emergency services and post-stabilization care provided in a hospital or ambulatory surgical center setting or for devices for craniofacial anomalies. A dental MCO is not responsible for hospital and physician services, anesthesia, drugs related to treatment, and post-stabilization care for:

(i) a dislocated jaw, traumatic damage to a tooth, or removal of a cyst;

(ii) an oral abscess of tooth or gum origin; or

(iii) craniofacial anomalies.

(D) The services and benefits described in subparagraph (C) of this paragraph are reimbursed through the health care MCO.

(5) An MCO may be required by contract with HHSC to allow members to obtain services from out-of-network providers in circumstances other than those described in paragraphs (1) - (4) of this subsection.

(c) Reporting requirements.

(1) Each MCO that contracts with HHSC to provide health care services or dental services to members in a service area must submit an Out-of-Network quarterly report to HHSC.

(2) Each Out-of-Network quarterly report must contain information about members enrolled in CHIP. The report must include the following information:

(A) For a health care MCO, the total number of hospital admissions, as well as the number of admissions that occur at each out-of-network hospital. Each out-of-network hospital must be identified.

(B) For a health care MCO, the total number of emergency room visits, as well as the total number of emergency room visits that occur at each out-of-network hospital. Each out-of-network hospital must be identified.

(C) Total dollars billed for services other than those described in subparagraphs (C) and (D) of this paragraph, as well as total dollars billed by out-of-network providers for other services.

(D) Any additional information that HHSC requires.

(3) HHSC will determine the specific form of the report described in this subsection and will include the report form as part of the CHIP managed care contract between HHSC and the MCOs.

(d) Utilization.

(1) Upon review of the reports described in subsection (c) of this section, HHSC may determine that an MCO exceeded the maximum out-of-network usage standards HHSC set for out-of-network access to health care services and dental services during the reporting period.

(2) Out-of-network usage standards.

(A) Inpatient admissions: No more than 15 percent of a health care MCO's total hospital admissions, by service area, may occur in out-of-network facilities.

(B) Emergency room visits: No more than 20 percent of a health care MCO's total emergency room visits, by service area, may occur in out-of-network facilities.

(C) Other services: For services that are not included in subparagraph (A) or (B) of this paragraph, no more than 20 percent of total dollars billed to an MCO may be billed by out-of-network providers.

(3) Special considerations in calculating a health care MCO's out-of-network usage of inpatient admissions and emergency room visits.

(A) In the event that a health care MCO exceeds the maximum out-of-network usage standard set by HHSC for inpatient admissions or emergency room visits, HHSC may modify the calculation of that health care MCO's out-of-network usage for that standard if:

(i) the admissions or visits to a single out-of-network facility account for 25 percent or more of the health care MCO's admissions or visits in a reporting period; and

(ii) HHSC determines that the health care MCO has made all reasonable efforts to contract with that out-of-network facility as a network provider without success.

(B) In determining whether a health care MCO has made all reasonable efforts to contract with the single out-of-network facility described in subparagraph (A) of this paragraph, HHSC will consider at least the following information:

(i) How long the health care MCO has been trying to negotiate a contract with the out-of-network facility;

(ii) The in-network payment rates the health care MCO has offered to the out-of-network facility;

(iii) The other, non-financial contractual terms the health care MCO has offered to the out-of-network facility, particularly those relating to prior authorization and other utilization management policies and procedures;

(iv) The health care MCO's history with respect to claims payment timeliness, overturned claims denials, and provider complaints;

(v) The health care MCO's solvency status; and

(vi) The out-of-network facility's reasons for not contracting with the health care MCO.

(C) If the conditions described in subparagraph (A) of this paragraph are met, HHSC may modify the calculation of the health care MCO's out-of-network usage for the relevant reporting period and standard by excluding from the calculation the inpatient admissions or emergency room visits to that single out-of-network facility.

(e) Reimbursement rates.

(1) HHSC does not set reimbursement rate standards for out-of-network CHIP providers. MCOs are required to reimburse providers for emergency services and assessments in accordance with Texas Insurance Code §1271.155.

(2) A health care or dental MCO providing CHIP out-of-network services must comply with the reimbursement standards set forth by the Texas Department of Insurance for out-of-network providers.

(f) Provider complaints.

(1) HHSC accepts and investigates provider complaints regarding overuse of out-of-network providers.

(2) Not later than the 60th day after HHSC receives a provider complaint, HHSC notifies the provider who initiated the complaint of the conclusions of HHSC's investigation into the complaint. The notification to the complaining provider will include a description of the corrective action plan, if required, that HHSC has initiated under subsection (g) of this section.

(3) Provider complaints regarding reimbursement rates should be submitted to the Texas Department of Insurance.

(g) Corrective action plan.

(1) HHSC initiates a corrective action plan with an MCO if HHSC determines through investigation that:

(A) the MCO did not comply with the out-of-network utilization standards for health care services and dental services described in subsection (d) of this section; and

(B) HHSC has not granted a special consideration under subsection (d)(3).

(2) HHSC may impose other contractual remedies as appropriate.

(h) Application to Pharmacy Providers. The requirements of this section do not apply to providers of outpatient pharmacy benefits.

Source Note: The provisions of this §370.604 adopted to be effective January 22, 2014, 39 TexReg 9890