By:  Patterson                                         S.B. No. 555
                                 A BILL TO BE ENTITLED
                                        AN ACT
    1-1  relating to provision of certain mental health and substance abuse
    1-2  services through single service health maintenance organizations.
    1-3        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
    1-4        SECTION 1.  Section 2, Texas Health Maintenance Organization
    1-5  Act (Article 20A.02, Vernon's Texas Insurance Code), is amended by
    1-6  amending Subsection (s) and adding Subsection (u) to read as
    1-7  follows:
    1-8        (s)  "Single health care service plan" means a plan under
    1-9  which any person undertakes to provide, arrange for, pay for, or
   1-10  reimburse any part of the cost of a single health care service,
   1-11  provided<,> that a part of the plan consists of arranging for or
   1-12  the provision of the single health care service<,> as distinguished
   1-13  from an indemnification against the cost of that service, on a
   1-14  prepaid basis through insurance or otherwise and that no part of
   1-15  that plan consists of arranging for the provision of more than one
   1-16  health care need of a single specified nature.  A plan that
   1-17  provides only mental health services and substance abuse services
   1-18  is a single health care service plan.
   1-19        (u)  "Prepaid" means payment is made by or on behalf of an
   1-20  enrollee in advance of receiving services which results in the
   1-21  elimination or reduction of the amount to be paid by the enrollee
   1-22  at the time services are received by the enrollee.
   1-23        SECTION 2.  Section 6, Texas Health Maintenance Organization
   1-24  Act (Article 20A.06, Vernon's Texas Insurance Code), is amended by
    2-1  adding Subsection (c) to read as follows:
    2-2        (c)  A health maintenance organization may furnish or arrange
    2-3  mental health services and substance abuse services through
    2-4  contract with a single service health maintenance organization.
    2-5        SECTION 3.  Article 3.51-14, Insurance Code, is amended by
    2-6  adding Section 4 to read as follows:
    2-7        Sec. 4.  SINGLE SERVICE HEALTH MAINTENANCE ORGANIZATIONS;
    2-8  EXCEPTION.  (a)  An insurer, nonprofit hospital service plan
    2-9  corporation, health maintenance organization, or self-funded or
   2-10  self-insured welfare or benefit plan, program, or arrangement
   2-11  subject to Section 2 of this article may satisfy the requirements
   2-12  of this article by offering the required coverage through a
   2-13  contract with a single service health maintenance organization.
   2-14        (b)  An insurer, nonprofit hospital service plan corporation,
   2-15  health maintenance organization, or self-funded or self-insured
   2-16  welfare or benefit plan, program, or arrangement subject to Section
   2-17  2 of this article is not required to comply with this article if
   2-18  the required coverage is provided to the group under a contract
   2-19  between the group policy holder, contract holder, employer,
   2-20  multiple employer, union, association, or trustee and a single
   2-21  service health maintenance organization.
   2-22        SECTION 4.  Section 2A, Article 3.51-9, Insurance Code, is
   2-23  amended by adding Subsection (f) to read as follows:
   2-24        (f)  An insurer, nonprofit hospital and medical service plan
   2-25  corporation, health maintenance organization, or self-funded or
   2-26  self-insured plan or arrangement subject to Subsection (a) of this
   2-27  section is not required to comply with this article if the required
    3-1  coverage is provided to the group under a contract between the
    3-2  group policy holder, contract holder, employer, or other entity
    3-3  acting on behalf of the group and a single service health
    3-4  maintenance organization.
    3-5        SECTION 5.  (a)  An existing organization that provides only
    3-6  mental health services and substance abuse services which is
    3-7  required by this Act to apply for a certificate of authority to
    3-8  operate as a health maintenance organization must submit an
    3-9  application as provided by the Texas Health Maintenance
   3-10  Organization Act (Chapter 20A, Vernon's Texas Insurance Code).
   3-11  Such application must be postmarked by no later than 5:00 p.m. on
   3-12  December 31, 1993.  An applicant may continue to operate until the
   3-13  commissioner of insurance acts on the application.  If an
   3-14  application is denied, the applicant shall be treated as a health
   3-15  maintenance organization whose certificate of authority has been
   3-16  revoked.
   3-17        (b)  This Act takes effect September 1, 1993, and applies
   3-18  only to an insurance policy, contract, or self-funded or
   3-19  self-insured plan, program, or arrangement that is delivered,
   3-20  issued for delivery, or renewed on or after January 1, 1994.  An
   3-21  insurance policy, contract, or self-funded or self-insured plan,
   3-22  program, or arrangement that is delivered, issued for delivery, or
   3-23  renewed before January 1, 1994, is governed by the law as it
   3-24  existed immediately before the effective date of this  Act, and
   3-25  that law is continued in effect for that purpose.
   3-26        SECTION 6.  The importance of this legislation and the
   3-27  crowded condition of the calendars in both houses create an
    4-1  emergency and an imperative public necessity that the
    4-2  constitutional rule requiring bills to be read on three several
    4-3  days in each house be suspended, and this rule is hereby suspended.