(a) A health maintenance organization or insurer may not deny or reduce payment to a physician or provider for a health care service for which the physician or provider has qualified for an exemption from preauthorization requirements under § 4201.653 based on medical necessity or appropriateness of care unless the physician or provider:
(1) knowingly and materially misrepresented the health care service in a request for payment submitted to the health maintenance organization or insurer with the specific intent to deceive and obtain an unlawful payment from the health maintenance organization or insurer; or
(2) failed to substantially perform the health care service.
(b) A health maintenance organization or an insurer may not conduct a retrospective review of a health care service subject to an exemption except:
(1) to determine if the physician or provider still qualifies for an exemption under this subchapter; or
(2) if the health maintenance organization or insurer has a reasonable cause to suspect a basis for denial exists under Subsection (a).

(c) For a retrospective review described by Subsection (b)(2), nothing in this subchapter may be construed to modify or otherwise affect:
(1) the requirements under or application of § 4201.305, including any timeframes specified by that section; or
(2) any other applicable law, except to prescribe the only circumstances under which:
(A) a retrospective utilization review may occur as specified by Subsection (b)(2); or
(B) payment may be denied or reduced as specified by Subsection (a).
(d) Not later than five days after qualifying for an exemption from preauthorization requirements under § 4201.653, a health maintenance organization or insurer must provide to a physician or provider a notice that includes:
(1) a statement that the physician or provider qualifies for an exemption from preauthorization requirements under § 4201.653;
(2) a list of the health care services and health benefit plans to which the exemption applies; and
(3) a statement of the duration of the exemption.
(e) If a physician or provider submits a preauthorization request for a health care service for which the physician or provider qualifies for an exemption from preauthorization requirements under § 4201.653, the health maintenance organization or insurer must promptly provide a notice to the physician or provider that includes:
(1) the information described by Subsection (d); and
(2) a notification of the health maintenance organization’s or insurer’s payment requirements.
(f) Nothing in this subchapter may be construed to:
(1) authorize a physician or provider to provide a health care service outside the scope of the provider’s applicable license issued under Title 3, Occupations Code; or
(2) require a health maintenance organization or insurer to pay for a health care service described by Subdivision (1) that is performed in violation of the laws of this state.