State Law

Tennessee Code-Title 56-Chapter 60. Preferred Provider Organization Transparency Act

08/24/2023 Tennessee Sections 56-60-102, 56-60-103, 56-60-104, 56-60-105, 56-60-107 and 56-60-109

Chapter definitions; Exceptions; Registration as a contracting entity; Granting a third party access to a provider’s health care services and contractual discounts pursuant to a provider network contract; Subsequent grants of access to another third party; Requirements for granting a third party access to the contracting entity’s provider network — Refusal to accept contractual discount; Unfair insurance practice — Complaints for violations.

Rental Networks

Section 56-60-102. Chapter definitions

As used in this chapter:

(1) “Affiliate” means an individual or entity that directly or indirectly through one (1) or more intermediaries, controls or is controlled by or is under common control with a contracting entity;

(2) “Contracting entity” means any individual or entity that is engaged in the act of contracting with providers and that has entered into a provider network contract with a provider for the delivery of health care services. “Contracting entity” shall not include any self-funded employer-sponsored health insurance plan regulated under the Employee Retirement Income Security Act of 1974 (ERISA) (29 U.S.C. § 1001 et seq.). In addition, “contracting entity” shall not include any individual or entity that provides administrative services to a self-funded employer-sponsored health insurance plan; provided, however, that this exemption applies only to those administrative services performed for a self-funded employer-sponsored health insurance plan;

(3) “Control” or “controlled by” or “under common control with” means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of an individual or entity, whether through the ownership of voting securities, by contract other than a commercial contract for goods or nonmanagement services, or otherwise, unless the power is the result of an official position with or corporate office held by the individual or entity. “Control” is presumed to exist if any individual or entity, directly or indirectly, owns, controls, holds with the power to vote or holds proxies representing ten percent (10%) or more of the voting securities of any other individual or entity;

(4) “Covered individual” means an individual who is covered under a health insurance plan;

(5) “Department” means the department of commerce and insurance;

(6) “Discount medical plan organization” means an entity that, in exchange for fees, dues, charges or other consideration, provides access for plan members to providers of medical services and the right to receive medical services from those providers at a discount;

(7) “Entity” means a corporation, business trust, trust, partnership, limited liability company, association, joint venture, public corporation, government or governmental subdivision, agency or instrumentality, or any other legal or commercial entity;

(8) “Health care services” means services for the diagnosis, prevention, treatment or cure of a health condition, illness, injury or disease;

(9)(A) “Health insurance plan” means any hospital and medical expense incurred policy, nonprofit health care service plan contract, health maintenance organization subscriber contract or any other health care plan or arrangement that pays for or furnishes medical or health care services, whether by insurance or otherwise;

(B) “Health insurance plan” does not include one (1) or more, or any combination of, the following:

(i) Coverage only for accident, or disability income insurance;

(ii) Coverage issued as a supplement to liability insurance;

(iii) Liability insurance, including general liability insurance and automobile liability insurance;

(iv) Workers’ compensation or similar insurance;

(v) Automobile medical payment insurance;

(vi) Credit-only insurance;

(vii) Coverage for on-site medical clinics;

(viii) Coverage similar to subdivisions (9)(B)(i)-(vii) as specified in federal regulations issued pursuant to P.L. 104-191, under which benefits for medical care are secondary or incidental to other insurance benefits;

(ix) Dental or vision benefits;

(x) Benefits for long-term care, nursing home care, home health care or community-based care;

(xi) Specified disease or illness coverage, hospital indemnity or other fixed indemnity insurance, or such other similar, limited benefits as are specified in regulations;

(xii) Medicare supplemental health insurance, as defined under § 1882(g)(1) of the Social Security Act (42 U.S.C. § 1395ss(g)(1));

(xiii) Coverage supplemental to the coverage provided under 10 U.S.C. § 1071 et seq.; or

(xiv) Other similar limited benefit supplemental coverages;

(10) “Physician” means any individual licensed as a chiropractic physician under title 63, chapter 4; a medical doctor under title 63, chapter 6; or an osteopathic physician under title 63, chapter 9;

(11) “Physician hospital organization” means an organization that includes, but is not limited to, hospitals and physicians and that contracts with and provides administrative services to hospitals and physicians that have entered into or intend to enter into managed care arrangements;

(12) “Physician organization” means an organization that contracts with and provides administrative services to physicians who have entered into managed care arrangements;

(13) “Provider” means a physician, a physician organization or a physician hospital organization. “Provider” does not include a physician organization or physician hospital organization that leases or rents the physician organization’s or physician hospital organization’s network to a third party;

(14) “Provider network contract” or “provider agreement” means a direct contract between a contracting entity and a provider for the delivery of health care services specifying the rights and responsibilities of the contracting entity and the provider in relation to access and payment for health care services to covered individuals; and

(15) “Third party” means an organization that enters into a contract with a contracting entity or with another third party to gain access to a provider network contract. “Third party” also includes a contracting entity’s subsidiaries and affiliates, except as provided in § 56-60-103. “Third party” does not include any self-funded employer-sponsored health insurance plan regulated under the Employee Retirement Income Security Act of 1974 (ERISA) (29 U.S.C. § 1001 et seq.). In addition, “third party” does not include any individual or entity that provides administrative services to a self-funded employer-sponsored health insurance plan; provided, however, that this exemption applies only to those administrative services performed for a self-funded employer-sponsored health insurance plan.

See https://law.justia.com/codes/tennessee/2021/title-56/chapter-60/

Section 56-60-103. Exceptions

This chapter does not apply:

(1) In circumstances where access to the provider network contract is granted to an affiliate or a subsidiary of a contracting entity, or other entity if operating under the same brand licensee program as the contracting entity;

(2) To a contract between a contracting entity and a discount medical plan organization; or

(3) To the provision of any medical services for injuries covered by the Workers’ Compensation Law, compiled in title 50, chapter 6.

See https://law.justia.com/codes/tennessee/2021/title-56/chapter-60/

Section 56-60-104. Registration as a contracting entity

(a) Any individual or entity that commences business as a contracting entity shall register with the department within thirty (30) days of commencing business in this state unless the individual or entity is licensed by the department as an insurer or third party administrator. Any contracting entity not licensed by the department as an insurer or third party administrator shall register with the department within ninety (90) days of January 1, 2010. If a contracting entity fails to register with the department in compliance with this section, then the commissioner may assess penalties as set forth in § 56-2-305(a)(1) or (a)(2).

(b)(1) Registration shall consist of the submission of the following information:

(A) The official name of the contracting entity, including any doing business as (d/b/a) designations used in this state;

(B) The mailing address and official telephone number for the contracting entity’s principal headquarters;

(C) The name and telephone number of the contracting entity’s representative who will serve as the primary contact with the department; and

(D) Any other information as requested by the department.

(2) The information required by subdivision (b)(1) shall be submitted in written or electronic format, as prescribed by the department.

(c) The department may impose a registration fee to defray the cost of administering this section.

See https://law.justia.com/codes/tennessee/2021/title-56/chapter-60/

Section 56-60-105. Granting a third party access to a provider’s health care services and contractual discounts pursuant to a provider network contract

(a) A contracting entity shall only grant access to a provider’s health care services and contractual discounts pursuant to the contracting entity’s provider network contract if:

(1) The provider network contract clearly and plainly authorizes the contracting entity to enter into an agreement with a third party allowing the third party to exercise the contracting entity’s rights and responsibilities under the provider network contract as if the third party were the contracting entity; and

(2) The third party accessing a provider’s services and contractual discounts pursuant to the provider network contract is contractually obligated to comply with all applicable terms, limitations and conditions of the provider network contract.

(b) A contracting entity that grants a third party access to a provider’s health care services and contractual discounts pursuant to a provider network contract shall:

(1) Identify and supply to a provider, upon request at the time a provider network contract is entered into with the provider, a written or electronic list of all third parties known at the time of contracting to which the contracting entity has or will grant access to the provider’s health care services and contractual discounts pursuant to the provider network contract;

(2) Maintain an Internet web site or a toll-free telephone number through which a provider may obtain a listing, updated at least quarterly, of the third parties to which the contracting entity or another third party has executed contracts to grant access to the provider’s health care services and contractual discounts pursuant to the provider network contract;

(3) Provide each third party who contracts with the contracting entity to gain access to the provider network contract a summary of the contracting entity’s current standard provider contract terms;

(4) Require that each third party who contracts with the contracting entity to gain access to the provider network contract:

(A) Designate an individual or department responsible for responding to provider inquiries concerning the third party’s access to the provider network contract; and

(B) Include the following information on each remittance advice (RA), explanation of payment (EOP) or other similar documentation furnished to a provider when a contractual discount is exercised pursuant to the contracting entity’s provider network contract:

(i) The source of the contractual discount taken by the third party; and

(ii) A direct toll-free telephone number answerable Monday through Friday during normal business hours for the individual or department designated to be responsible for responding to provider inquiries pursuant to subdivision (b)(4)(A); and

(5)(A) Notify any third party who contracts with the contracting entity to gain access to a provider’s services and contractual discounts pursuant to the provider network contract of the termination of the provider network contract within thirty (30) calendar days of the contracting entity’s receipt of notification of the termination;

(B) The notice required by subdivision (b)(5)(A) shall be provided through written notice, electronic communication or an update to an electronic database of provider listings.

(c) Subject to any applicable continuity of care requirements, provisions of the provider network contract or contrary law:

(1) A third party’s right to access a provider’s health care services and contractual discounts pursuant to a provider network contract shall terminate on the date the provider network contract is terminated;

(2) Claims for health care services performed after the termination date of the provider network contract are not eligible for processing and payment in accordance with the provider network contract; and

(3) Claims for health care services performed before the termination date of the provider network contract, but processed after the termination date, are eligible for processing and payment in accordance with the provider network contract.

(d)(1) All information made available to a provider in accordance with the requirements of this chapter shall be confidential and shall not be disclosed to any individual or entity not involved in the provider’s practice or the administration of such practice without the prior written consent of the contracting entity.

(2) A contracting entity may reference or include within the contract or a related document the language contained in subdivision (d)(1), or language that is substantially similar in scope and purpose, in order to affirm each party’s knowledge of and agreement to comply with the confidentiality provision.

(3) This subsection (d) shall not preclude the information being disclosed for purposes of dispute resolution, enforcement of this chapter or assistance in enforcing this chapter.

See https://law.justia.com/codes/tennessee/2021/title-56/chapter-60/

Section 56-60-107. Requirements for granting a third party access to the contracting entity’s provider network — Refusal to accept contractual discount

(a) No contracting entity shall grant a third party access to the contracting entity’s provider network contract by lease, rent or by any other means unless the third party accessing the provider network contract is:

(1) A payer of claims or a third party administrator or other entity that administers or processes claims on behalf of the payer;

(2) A preferred provider organization or preferred provider network including a physician organization or physician hospital organization; or

(3) An entity engaged in the electronic claims transport between the contracting entity and the payer if the entity does not provide access to the provider’s services and contractual discounts to any other third party.

(b)(1) A provider may refuse the discount taken on the remittance advice (RA) or explanation of payment (EOP) if the discount is taken without a contractual basis or if the provider cannot obtain information relative to the discount because of a violation of § 56-60-105(b)(2) or § 56-60-106(c). The provider shall notify in writing the contracting entity or third party of the provider’s refusal to accept the contractual discount.

(2) The provider may require payment of the charge with no discount applied unless the contracting entity or third party within thirty (30) calendar days of receipt of notice of the apparent violation of the requirements of this section:

(A) Notifies the provider that the apparent violation resulted from an administrative oversight or other unintentional error and advises the provider of steps taken to remedy and avoid recurrence of the error; and

(B) Submits to the provider a corrected RA or EOP with documentation demonstrating eligibility for any discount applied.

See https://law.justia.com/codes/tennessee/2021/title-56/chapter-60/

Section 56-60-109. Unfair insurance practice — Complaints for violations

(a) It is an unfair insurance practice for the purposes of the Tennessee Unfair Trade Practices and Unfair Claims Settlement Act of 2009, compiled in chapter 8, part 1 of this title, to knowingly access a provider’s services or exercise a provider’s contractual discounts pursuant to a provider network contract if the access or exercise is not pursuant to a contractual relationship with the provider or with a contracting entity or third party who has a contractual relationship with the provider as specified in this chapter.

(b)(1) To effectuate the purposes of this section, the department shall develop a complaint form for providers or others to submit alleging violations of this chapter.

(2) Information provided in good faith to the department shall not make the provider or other individual or entity providing the information liable for civil damages as a result of providing the information.

See https://law.justia.com/codes/tennessee/2021/title-56/chapter-60/