(a) The purpose of this section is to implement Insurance Code Chapter 1213. This section applies to a contract between an issuer of a health benefit plan and a health care professional or health care facility (hereinafter referred to as "physicians or providers").     
      (b) Consistent with Insurance Code Chapter 1213 and this section, the issuer of a health benefit plan may, by contract, require physicians and providers to electronically submit the following:      
        (1) health care claims or equivalent encounter information;       
        (2) referral certifications; and/or       
        (3) any authorization or eligibility transactions.       
      (c) An issuer of a health benefit plan must give 90 calendar days written notice prior to requiring electronic filing of any information described in subsection (b) of this section.     
      (d) A contract between the issuer of a health benefit plan and a physician or provider that requires electronic submission of any information described in subsection (b) of this section must include a provision stating that in the event of a systems failure or a catastrophic event as defined in §21.2802 of this title (relating to Definitions) that substantially interferes with the business operations of the physician or provider, the physician or provider may submit non-electronic claims in accordance with the requirements in this subchapter and for the number of calendar days during which substantial interference with business operations occurs as of the date of the catastrophic event or systems failure. A physician or provider must provide written notice of the physician's or provider's intent to submit non-electronic claims to the issuer of the health benefit plan within five calendar days of the catastrophic event or systems failure.     
      (e) A contract between the issuer of a health benefit plan and a physician or provider that requires electronic submission of the information described in subsection (b) of this section must include a provision allowing for a waiver of the electronic submission requirements in any of the following circumstances:      
        (1) No method available for the submission of claims in electronic form. This exception applies to situations in which the federal standards for electronic submissions (45 C.F.R., Parts 160 and 162) do not support all of the information necessary to process the claim.       
        (2) The operation of small physician and provider practices. This exception applies to those physicians and providers with fewer than 10 full-time-equivalent employees, consistent with 42 C.F.R. §424.32(d)(1)(viii).       
        (3) Demonstrable undue hardship, including fiscal or operational hardship.       
        (4) Any other special circumstances that would justify a waiver.       
      (f) The physician's or provider's request for a waiver must be in writing and must include documentation supporting the issuance of a waiver.     
      (g) Upon receipt of a request for a waiver from a physician or provider, the issuer of a health benefit plan must, within 14 calendar days, issue or deny a waiver.     
      (h) A waiver or denial of a waiver must be issued in writing to the requesting physician or provider. A written waiver must contain any restrictions, conditions, or limitations related to the waiver. A written denial of a request for a waiver or the issuance of a qualified or conditional waiver must include the reason for the denial or any restrictions, conditions, or limitations, and notice of the physician's or provider's right to appeal the determination to the department.     
      (i) A physician or provider that is denied a waiver of the electronic submission requirements or granted a waiver with restrictions, conditions, or limitations, may, within 14 calendar days of receipt, appeal the waiver determination. The request for appeal and accompanying documentation must be sent to the Director of MCQA, MC-LH-MCQA, P.O. Box 12030, Austin, Texas 78711-2030 and to the issuer of the health benefit plan. The information must include:      
        (1) the physician's or provider's initial request for a waiver sent to the issuer of the health benefit plan, including the documentation required by subsection (f) of this section;       
        (2) the waiver determination received from the issuer of the health benefit plan;       
        (3) any additional documentation supporting issuance of a waiver or removal of restrictions, conditions or limitations of a granted waiver; and       
        (4) any additional information necessary for the determination of the appeal.       
      (j) Upon receipt of notice of a request for appeal under this section, an issuer of a health benefit plan must, within 14 calendar days, submit to the department and to the physician or provider:      
        (1) documentation supporting the waiver determination issued to the physician or provider; and       
        (2) any additional information necessary for the determination of the appeal.       
      (k) The department may request additional information from either party and may request the parties to appear at a hearing. Either party may choose to attend a hearing conducted at the department or participate in a hearing via telephone.     
      (l) Upon receipt of all information required by subsections (i) and (j) of this section, the Director of Managed Care Quality Assurance will issue a determination within 14 calendar days of the later of the receipt of all necessary information or the conclusion of the hearing.     
      (m) Either party may request a hearing before the Deputy Commissioner of Life and Health for reconsideration of the Director of the Managed Care Quality Assurance Office's determination. Either party may choose to attend a hearing conducted at the department or participate in a hearing via telephone. A request for reconsideration must be received by the Chief Clerk at MC-GC-CCO, P.O. Box 12030, Austin, Texas 78711-2030 within 14 calendar days of receiving notice of the appeal determination.     
      (n) The physician or provider requesting or receiving a waiver, appealing a waiver determination, or requesting reconsideration of an appeal determination under this section may elect to file the required electronic transactions in a non-electronic format until a final determination on the request is made.     
      (o) The issuer of a health benefit plan may not refuse to contract or to renew a contract with a physician or provider based in whole or in part on the physician or provider requesting or receiving a waiver, appealing a waiver determination, or requesting reconsideration of an appeal determination under this section.     
      (p) This section applies to:      
        (1) a contract between a physician or provider and an issuer of a health benefit plan that requires electronic submission of the information described in subsection (b) of this section and entered into or renewed on or after September 1, 2004; and       
        (2) existing contracts to the extent that any contract provisions related to electronic submission of the information described in subsection (b) of this section are made applicable to a physician or provider on or after September 1, 2004.       
     Source Note:        The provisions of this §21.3701 adopted to be effective August 29, 2004, 29 TexReg 8357; amended to be effective November 7, 2021, 46 TexReg 7408