S.B. No. 555
                                        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.  Subsection (s), Section 2, Texas Health
    1-5  Maintenance Organization Act (Article 20A.02, Vernon's Texas
    1-6  Insurance Code), is amended to read as follows:
    1-7        (s)  "Single health care service plan" means a plan under
    1-8  which any person undertakes to provide, arrange for, pay for, or
    1-9  reimburse any part of the cost of a single health care service,
   1-10  provided<,> that a part of the plan consists of arranging for or
   1-11  the provision of the single health care service<,> as distinguished
   1-12  from an indemnification against the cost of that service, on a
   1-13  prepaid basis through insurance or otherwise and that no part of
   1-14  that plan consists of arranging for the provision of more than one
   1-15  health care need of a single specified nature.  A plan that
   1-16  provides only mental health services and substance abuse services
   1-17  is a single health care service plan.
   1-18        SECTION 2.  Section 6, Texas Health Maintenance Organization
   1-19  Act (Article 20A.06, Vernon's Texas Insurance Code), is amended by
   1-20  adding Subsections (c) and (d) to read as follows:
   1-21        (c)  A health maintenance organization may furnish or arrange
   1-22  mental health services and substance abuse services through
   1-23  contract with a single service health maintenance organization.
   1-24        (d)  Unless this section and the powers specified in
    2-1  Subsection (a) of this section are specifically amended, no other
    2-2  law or rule shall be construed to prohibit or restrict a group
    2-3  model health maintenance organization from:  (1) selectively
    2-4  contracting with or declining to contract with any or all providers
    2-5  as the health maintenance organization deems necessary;
    2-6  (2) contracting for or declining to contract for an individual
    2-7  health care service or full range of health care services as the
    2-8  health maintenance organization deems necessary, provided that such
    2-9  service or services may be legally provided by the contracting
   2-10  provider; or (3) requiring enrolled members of the health
   2-11  maintenance organization who wish to obtain the services covered by
   2-12  the health maintenance organization to use the providers specified
   2-13  by the health maintenance organization.  In this subsection, a
   2-14  group model health maintenance organization is a health maintenance
   2-15  organization which provides the majority of its professional
   2-16  services through a single group medical practice and such group
   2-17  medical practice is formally affiliated with the medical school
   2-18  component of a Texas state-supported public college or university.
   2-19        SECTION 3.  Article 3.51-14, Insurance Code, is amended by
   2-20  adding Section 4 to read as follows:
   2-21        Sec. 4.  SINGLE SERVICE HEALTH MAINTENANCE ORGANIZATIONS;
   2-22  EXCEPTION.  (a)  An insurer, nonprofit hospital service plan
   2-23  corporation, health maintenance organization, or self-funded or
   2-24  self-insured welfare or benefit plan, program, or arrangement
   2-25  subject to Section 2 of this article may satisfy the requirements
   2-26  of this article by offering the required coverage through a
   2-27  contract with a single service health maintenance organization.
    3-1        (b)  An insurer, nonprofit hospital service plan corporation,
    3-2  health maintenance organization, or self-funded or self-insured
    3-3  welfare or benefit plan, program, or arrangement subject to Section
    3-4  2 of this article is not required to comply with this article if
    3-5  the required coverage is provided to the group under a contract
    3-6  between the group policy holder, contract holder, employer,
    3-7  multiple employer, union, association, or trustee and a single
    3-8  service health maintenance organization.
    3-9        SECTION 4.  Section 2A, Article 3.51-9, Insurance Code, is
   3-10  amended by adding Subsection (f) to read as follows:
   3-11        (f)  An insurer, nonprofit hospital and medical service plan
   3-12  corporation, health maintenance organization, or self-funded or
   3-13  self-insured plan or arrangement subject to Subsection (a) of this
   3-14  section is not required to comply with this article if the required
   3-15  coverage is provided to the group under a contract between the
   3-16  group policy holder, contract holder, employer, or other entity
   3-17  acting on behalf of the group and a single service health
   3-18  maintenance organization.
   3-19        SECTION 5.  (a)  An existing organization that provides only
   3-20  mental health services and substance abuse services which is
   3-21  required by this Act to apply for a certificate of authority to
   3-22  operate as a health maintenance organization must submit an
   3-23  application as provided by the Texas Health Maintenance
   3-24  Organization Act (Chapter 20A, Vernon's Texas Insurance Code).
   3-25  Such application must be postmarked by no later than 5:00 p.m. on
   3-26  December 31, 1993.  An applicant may continue to operate until the
   3-27  commissioner of insurance acts on the application.  If an
    4-1  application is denied, the applicant shall be treated as a health
    4-2  maintenance organization whose certificate of authority has been
    4-3  revoked.
    4-4        (b)  This Act takes effect September 1, 1993, and applies
    4-5  only to an insurance policy, contract, or self-funded or
    4-6  self-insured plan, program, or arrangement that is delivered,
    4-7  issued for delivery, or renewed on or after January 1, 1994.  An
    4-8  insurance policy, contract, or self-funded or self-insured plan,
    4-9  program, or arrangement that is delivered, issued for delivery, or
   4-10  renewed before January 1, 1994, is governed by the law as it
   4-11  existed immediately before the effective date of this  Act, and
   4-12  that law is continued in effect for that purpose.
   4-13        SECTION 6.  The importance of this legislation and the
   4-14  crowded condition of the calendars in both houses create an
   4-15  emergency and an imperative public necessity that the
   4-16  constitutional rule requiring bills to be read on three several
   4-17  days in each house be suspended, and this rule is hereby suspended.