1. (a) If an HMO or preferred provider carrier is unable to pay or deny a clean claim, in whole or in part, within the applicable statutory claims payment period specified in §21.2802(28) of this title (relating to Definitions) and intends to audit the claim to determine whether the claim is payable, the HMO or preferred provider carrier shall notify the preferred provider that the claim is being audited and pay 100% of the contracted rate within the applicable statutory claims payment period. An HMO or preferred provider carrier that fails to provide notification of the decision to audit the claim and pay 100% of the applicable contracted rate subject to copayments and deductibles within the applicable statutory claims payment period, or, if applicable, the extended periods allowed for by §21.2804(c) of this title (relating to Requests for Additional Information) or §21.2819(c) of this title (relating to Catastrophic Event), may not make use of the audit procedures set forth in this section. A preferred provider that receives less than 100% of the contracted rate in conjunction with a notice of intent to audit has received an underpayment and must notify the HMO or preferred provider carrier within 180 days in accordance with the provisions of §21.2815(e)(2) of this title (relating to Failure to Meet the Statutory Claims Payment Period) to qualify to receive a penalty for the underpaid amount.
2. (b) The HMO or preferred provider carrier shall clearly indicate on the explanation of payment that the claim is being audited and the preferred provider is being paid 100% of the contracted rate, subject to completion of the audit. A paper explanation of payment complies with this requirement if the notice of the audit is clearly and prominently identified.
3. (c) The HMO or preferred provider carrier shall complete the audit within 180 calendar days from receipt of the clean claim. The HMO or preferred provider carrier shall provide written notification of the results of the audit. The notice shall include a listing of the specific claims paid and not paid pursuant to the audit, as well as a listing of specific claims and amounts for which a refund is due and for each claim, the basis and specific reasons for requesting a refund. An HMO or preferred provider carrier seeking recovery of any refund under this section shall comply with the procedures set forth in §21.2818 of this title (relating to Overpayment of Claims).
4. (d) An HMO or preferred provider carrier may recover the total amount paid on the claim under subsection (a) of this section if a physician or provider fails to timely provide additional information requested pursuant to the requirements of Insurance Code Article 3.70-3C §3A(g) or §843.340(c). Section 21.2816 of this title (relating to Date of Receipt) applies to the submission and receipt of a request for information under this subsection.
5. (e) Prior to seeking a refund for a payment made under this section, an HMO or preferred provider carrier must provide a preferred provider with the opportunity to appeal the request for a refund in accordance with §21.2818 of this title. An HMO or preferred provider carrier may not seek to recover the refund until all of the preferred provider's internal appeal rights under §21.2818 of this title have been exhausted.
6. (f) Payments made pursuant to this section on a clean claim are not an admission that the HMO or preferred provider carrier acknowledges liability on that claim.

Source Note:The provisions of this §21.2809 adopted to be effective May 23, 2000, 25 TexReg 4543; amended to be effective February 14, 2001, 26 TexReg 1341; amended to be effective October 2, 2001, 26 TexReg 7542; amended to be effective October 5, 2003, 28 TexReg 8647.