(a) An MCC that determines under §21.2807 of this title (relating to Effect of Filing a Clean Claim) that a claim is payable must pay the contracted rate owed on the claim; and:
  (1) if the claim is paid on or before the 45th day after the end of the applicable statutory claims payment period, pay to a noninstitutional preferred provider a penalty in the amount of the lesser of:
    (A) 50 percent of the difference between the billed charges and the contracted rate; or
    (B) $100,000;
  (2) if the claim is paid on or after the 46th day and before the 91st day after the end of the applicable statutory claims payment period, pay to a noninstitutional preferred provider, a penalty in the amount of the lesser of:
    (A) 100 percent of the difference between the billed charges and the contracted rate; or
    (B) $200,000;
  (3) if the claim is paid on or after the 91st day after the end of the applicable statutory claims payment period:
    (A) pay to the noninstitutional preferred provider a penalty computed under paragraph (2) of this subsection; and
    (B) pay to the Texas Health Insurance Pool until its dissolution, and after its dissolution to Texas Department of Insurance (department) 18 percent annual interest on the penalty amount paid to a noninstitutional preferred provider under paragraph (2) of this subsection. Interest under this paragraph accrues beginning on the date the MCC was required to pay the claim and ending on the date the claim and the penalty are paid in full to the noninstitutional provider;
  (4) if the claim is paid to an institutional preferred provider on or before the 45th day after the end of the applicable statutory claims payment period, pay a penalty in the amount specified in subparagraph (A) or (B) of this paragraph. The MCC must pay 50 percent of the penalty to the institutional preferred provider and 50 percent of the penalty to the Texas Health Insurance Pool until its dissolution, and after its dissolution to the department. The penalty under this paragraph is in the amount of the lesser of:
    (A) 50 percent of the difference between the billed charges and the contracted rate; or
    (B) $100,000;
  (5) if the claim is paid to an institutional preferred provider on or after the 46th day and before the 91st day after the end of the applicable statutory claims payment period, pay a penalty in the amount specified in subparagraph (A) or (B) of this paragraph. The MCC must pay 50 percent of the penalty to the institutional preferred provider and 50 percent of the penalty to the Texas Health Insurance Pool until its dissolution, and after its dissolution to the department. The penalty under this paragraph is in the amount of the lesser of:
    (A) 100 percent of the difference between the billed charges and the contracted rate; or
    (B) $200,000; and
  (6) if the claim is paid to an institutional preferred provider on or after the 91st day after the end of the applicable statutory claims payment period:
    (A) pay the penalty amount to the institutional provider and the Texas Health Insurance Pool until its dissolution, and after its dissolution to the department as specified in paragraph (5) of this subsection; and
    (B) pay 18 percent annual interest on the penalty amount computed under paragraph (5) of this subsection. Interest under this paragraph accrues beginning on the date the MCC was required to pay the claim and ending on the date the claim and the institutional provider's portion of the penalty are paid in full. The MCC must pay 50 percent of the interest to the institutional preferred provider and 50 percent of the interest to the Texas Health Insurance Pool until its dissolution, and after its dissolution to the department.
(b) The following examples demonstrate how to calculate penalty amounts under subsection (a)(1) - (3) of this section:
  (1) if the contracted rate, including any patient financial responsibility, is $10,000 and the billed charges are $15,000, and the MCC pays the claim on or before the 45th day after the end of the applicable statutory claims payment period, the MCC must pay, in addition to the amount owed on the claim, 50 percent of the difference between the billed charges ($15,000) and the contracted rate ($10,000) or $2,500. The basis for the penalty is the difference between the total contracted amount, including any patient financial responsibility, and the noninstitutional provider's billed charges;
  (2) if the claim is paid on or after the 46th day and before the 91st day after the end of the applicable statutory claims payment period, the MCC must pay, in addition to the contracted rate owed on the claim, 100 percent of the difference between the billed charges and the contracted rate or $5,000; and
  (3) if the claim is paid on or after the 91st day after the end of the applicable statutory claims payment period, the MCC must pay to the noninstitutional provider, in addition to the contracted rate owed on the claim, the $5,000 penalty. The MCC must also pay to the Texas Health Insurance Pool until its dissolution, and after its dissolution to the department 18 percent annual interest on the $5,000 penalty amount accruing from the statutory claim payment deadline until the date the claim and penalty are paid in full to the noninstitutional provider.
(c) Except as provided by this section, an MCC that determines under §21.2807 of this title that a claim is payable, pays only a portion of the amount of the claim on or before the end of the applicable statutory claims payment period, and pays the balance of the contracted rate owed for the claim after that date must, in addition to paying the contracted amount owed:
  (1) if the balance of the claim is paid to a noninstitutional preferred provider on or before the 45th day after the applicable statutory claims payment period, pay to the preferred provider a penalty on the amount not timely paid in the amount of the lesser of:
    (A) 50 percent of the underpaid amount; or
    (B) $100,000;
  (2) if the balance of the claim is paid to a noninstitutional preferred provider on or after the 46th day and before the 91st day after the end of the applicable statutory claims payment period, pay to the preferred provider a penalty in the amount of the lesser of:
    (A) 100 percent of the underpaid amount; or
    (B) $200,000;
  (3) if the balance of the claim is paid to a noninstitutional preferred provider on or after the 91st day after the end of the applicable statutory claims payment period, pay to the preferred provider a penalty computed under paragraph (2) of this subsection plus 18 percent annual interest on the penalty amount. Interest under this subsection accrues beginning on the date the MCC was required to pay the claim and ending on the date the claim and the penalty are paid in full;
  (4) if the balance of the claim is paid to an institutional preferred provider on or before the 45th day after the applicable statutory claims payment period, pay a penalty in the amount specified in subparagraphs (A) and (B) of this paragraph. The MCC must pay 50 percent of the penalty to the institutional preferred provider and 50 percent of the penalty to the Texas Health Insurance Pool until its dissolution, and after its dissolution to the department. The penalty under this paragraph on the amount not timely paid is in the amount of the lesser of:
    (A) 50 percent of the underpaid amount; or
    (B) $100,000;
  (5) if the balance of the claim is paid to an institutional preferred provider on or after the 46th day and before the 91st day after the end of the applicable statutory claims payment period, pay a penalty in the amount specified in subparagraphs (A) and (B) of this paragraph. The MCC must pay 50 percent of the penalty to the institutional preferred provider and 50 percent of the penalty to the Texas Health Insurance Pool until its dissolution, and after its dissolution to the department. The penalty under this paragraph is in the amount of the lesser of:
    (A) 100 percent of the underpaid amount; or
    (B) $200,000; and
  (6) if the balance of the claim is paid to an institutional preferred provider on or after the 91st day after the end of the applicable statutory claims payment period, pay a penalty computed under paragraph (5) of this subsection plus 18 percent annual interest on the penalty amount. Interest under this subsection accrues beginning on the date the MCC was required to pay the claim and ending on the date the claim and the institutional provider's portion of the penalty are paid in full. The MCC must pay 50 percent of the interest to the institutional preferred provider and 50 percent of the interest to the Texas Health Insurance Pool until its dissolution, and after its dissolution to the department.
Cont'd...