HB 1374: Insurance; methods of payment to healthcare providers; provide certain requirements

House Bill 1374 (AS PASSED HOUSE AND SENATE)

By: Representatives Hawkins of the 27th, Stephens of the 164th, Jasperse of the 11th, Newton of the 127th, and Clark of the 100th

A BILL TO BE ENTITLED

AN ACT

To amend Chapter 24 of Title 33 of the Official Code of Georgia Annotated, relating to insurance generally, so as to provide for certain requirements concerning methods of payment to healthcare providers; to provide for definitions; to provide for notification; to provide for the avoidance of additional fees; to prohibit contractual waivers of certain statutory requirements; to amend Part 1 of Article 3 of Chapter 5 of Title 50 of the Official Code of Georgia Annotated, relating to general authority, duties, and procedures relative to state purchasing, so as to revise provisions for the award of contracts to prequalified suppliers; to clarify competitive bidding requirements and procedures with respect to prequalified suppliers; to provide for a report to the General Assembly; to prohibit the renewal or extension of contracts under certain circumstances; to require the commissioner of administrative services to adopt rules, regulations, and procedures; to provide for related matters; to repeal conflicting laws; and for other purposes.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA:

PART I

SECTION 1-1.

Chapter 24 of Title 33 of the Official Code of Georgia Annotated, relating to insurance generally, is amended by revising Code Section 33-24-59.24, relating to restrictions on payment methods prohibited, waiver of provisions prohibited, and enforcement, as follows:

"33-24-59.24.

(a) As used in this chapter Code section, the term:

(1) 'Care management organization' means an entity that is organized for the purpose of providing or arranging health care healthcare, which has been granted a certificate of authority by the Commissioner as a health maintenance organization pursuant to Chapter 21 of this title, and which has entered into a contract with the Department of Community Health to provide or arrange health care healthcare services on a prepaid, capitated basis to members.

(2) 'Credit card payment' means a type of electronic funds transfer in which a health insurance plan or health insurer or its contracted vendor issues a single-use series of numbers associated with the payment of health care healthcare services performed by a health care healthcare provider and chargeable to a predetermined dollar amount, whereby the health care healthcare provider is responsible for processing the payment by a credit card terminal or Internet internet portal. Such term shall include virtual or online credit card payments, whereby no physical credit card is presented to the health care healthcare provider and the single-use credit card expires upon payment processing.

(3) 'Electronic funds transfer' means an electronic funds transfer through the federal Health Insurance Portability and Accountability Act of 1996, P.L. 104-191, standard automated clearing-house network.

(4) 'Express acceptance' means a clear and direct agreement to the terms of payment method, communicated explicitly by the health benefit plan to the healthcare provider, in writing, signifying acceptance of the payment method.

(4)(5) 'Healthcare 'Health care provider' means any physician, dentist, podiatrist, pharmacist, optometrist, psychologist, registered optician, licensed professional counselor, physical therapist, chiropractor, hospital, or other entity or person that is licensed or otherwise authorized in this state to furnish health care healthcare services.

(6) 'Healthcare provider's agent' means a third-party firm or individual contracted by a healthcare provider to handle administrative tasks, particularly billing, insurance claims, and payment processing, acting on the healthcare provider's behalf for financial transactions and often providing value-added services like data management or portal access. Such term shall also refer to a recruiter who acts as an agent for healthcare providers seeking jobs or healthcare practices seeking to hire healthcare providers, guiding them through hiring and contract negotiation.

(5)(7) 'Healthcare 'Health care services' means the examination or treatment of persons for the prevention of illness or the correction or treatment of any physical or mental condition resulting from illness, injury, or other human physical problem and includes, but is not limited to:

(A) Hospital services which include the general and usual services and care, supplies, and equipment furnished by hospitals;

(B) Medical services which include the general and usual services and care rendered and administered by doctors of medicine, doctors of dental surgery, and doctors of podiatry; and

(C) Other health care healthcare services which include appliances and supplies; nursing care by a registered nurse or a licensed practical nurse; care furnished by such other licensed practitioners; institutional services including the general and usual care, services, supplies, and equipment furnished by health care healthcare institutions and agencies or entities other than hospitals; physiotherapy; ambulance services; drugs and medications; therapeutic services and equipment including oxygen and the rental of oxygen equipment; hospital beds; iron lungs; orthopedic services and appliances including wheelchairs, trusses, braces, crutches, and prosthetic devices including artificial limbs and eyes; and any other appliance, supply, or service related to health care healthcare.

(6)(8) 'Health insurance plan' means any hospital or medical insurance policy or certificate; health plan contract or certificate; qualified higher deductible health plan; health maintenance organization subscriber contract; any contract providing benefits for dental care whether such contract is pursuant to a medical insurance policy or certificate; stand-alone dental plan, health maintenance provider contract, managed health care healthcare plan, self-insured plan, or otherwise; or any health insurance plan established pursuant to Article 1 of Chapter 18 of Title 45.

(7)(9) 'Health insurer' means any entity or person engaged as an indemnitor, surety, or contractor that issues insurance, annuity or endowment contracts, subscriber certificates, or other contracts of insurance by whatever name called. Health care Healthcare plans under Chapter 20A of this title and health maintenance organizations are health insurers within the meaning of this chapter.

(b) No Any health insurance plan issued, amended, or renewed on or after January 1, 2019 2027, between a health insurer or its contracted vendor or a care management organization and a health care healthcare provider for the provision of health care healthcare services to a plan enrollee shall not contain restrictions on methods of payment from the health insurer or its vendor or the care management organization to the health care healthcare provider in which the only acceptable payment method is a credit card payment or any other form of payment that requires fees or similar charges.

(c) If initiating or changing payments to a health care provider using electronic funds transfer payments, including virtual credit card payments, a health insurance plan, health insurer or its contracted vendor, or care management organization shall:

(1) Notify the health care provider if any fees are associated with a particular payment method; and

(2) Advise the provider of the available methods of payment and provide clear instructions to the health care provider as to how to select an alternative payment method.

(c) A health insurance plan or its contracted vendor or a care management organization may initiate or change payment methodology to a healthcare provider using electronic funds transfer payments, including virtual credit card payments, only if:

(1) The health insurance plan notifies the healthcare provider if any fees are associated with a particular payment method;

(2) The health insurance plan advises the healthcare provider of the available methods of payment and provides clear instructions to the healthcare provider as to how to select an alternative payment method that does not impose fees or similar charges on the provider; and

(3) The healthcare provider or the healthcare provider's agent, through express acceptance, accepts a payment for the claim using a credit card or electronic funds transfer payment method.

(d) A healthcare provider's selected form of claim payment methodology remains effective until such time as the healthcare provider chooses an alternative method of payment or by making an election in a new contract.

(e) A health insurance plan or its contracted vendor or a care management organization that initiates or changes payments to a healthcare provider through an electronic funds transfer in accordance with 45 C.F.R. Section 162.1602, as effective on January 1, 2026, shall not charge a fee solely to transmit the payment to a healthcare provider unless the healthcare provider has consented to the fee.

(f) A healthcare provider or the healthcare provider's agent may charge reasonable fees when transmitting an automated clearing-house network payment related to transaction management, data management, portal services, and other value-added services in addition to the bank transmittal.

(g) Any electronic funds transfer or remittance advice transaction under this Code section shall be the transmission of any of the following from a health insurance plan to a healthcare provider:

(1) Payment;

(2) Information about the transfer of funds;

(3) Payment processing information;

(4) Explanation of benefits; or

(5) Remittance advice.

(d)(h) The provisions of this Code section shall not be waived by contract, and any contractual clause in conflict with the provisions of this Code section or that purports to waive any requirements of this Code section are void.

(e)(i) Violations of this Code section shall be subject to enforcement by the Commissioner."

PART II

SECTION 2-1.

Part 1 of Article 3 of Chapter 5 of Title 50 of the Official Code of Georgia Annotated, relating to general authority, duties, and procedures relative to state purchasing, is amended by revising Code Section 50-5-68, relating to prequalification of prospective suppliers, as follows:

"50-5-68.

(a) Prospective suppliers may be prequalified for particular types of supplies, services, goods, materials, and equipment at the discretion of the Department of Administrative Services. Solicitation mailing lists of potential contractors shall include, but shall not be limited to, such prequalified suppliers. The award of contracts, however, may shall not be conditioned upon prequalification; provided, however, that prequalification may be included among evaluation factors and criteria used in making an award. (b)(1) The provisions of subsection (a) of this Code section shall not be construed or applied to abrogate the competitive bidding requirements and procedures provided for in Code Sections 50-5-67 and 50-5-69.

(2) The commissioner of administrative services shall adopt rules, regulations, and procedures to ensure and clarify that the discretion of the Department of Administrative Services to prequalify prospective suppliers for particular types of supplies, services, goods, materials, and equipment does not extend and shall not be exercised to abrogate or frustrate the competitive bidding requirements and procedures provided for in Code Sections 50-5-67 and 50-5-69. Such rules, regulations, and procedures shall ensure that the application of such competitive bidding requirements and procedures shall not be obviated solely on the basis that a prospective supplier is prequalified for a particular type of supply, service, good, material, or equipment.

(3) By November 1, 2026, the commissioner of administrative services shall prepare a report of the rules, regulations, and procedures that have been adopted in compliance with paragraph (2) of this subsection. Such report shall be submitted in writing to the Speaker of the House of Representatives, the President of the Senate, and the chairpersons of the House Committee on Appropriations and the Senate Appropriations Committee."

SECTION 2-2.

Said part is further amended by adding a new Code section to read as follows:

"50-5-69.1.

(a) No contract for any purchase that was effectuated without competitive bidding solely because the contract price did not exceed a threshold amount required for competitive bidding as set forth under this part shall be subsequently renewed or extended at any time for a contract price that exceeds such threshold amount.

(b) The commissioner of administrative services shall adopt rules, regulations, and procedures necessary to carry out the intent of this Code section.

(c) Nothing in this Code section shall apply to or affect the laws, rules, and regulations governing emergency purchases."

PART III

SECTION 3-1.

All laws and parts of laws in conflict with this Act are repealed.