By Cook                                               H.B. No. 1058
       74R1813 MWV-D
                                 A BILL TO BE ENTITLED
    1-1                                AN ACT
    1-2  relating to the creation of limited liability health maintenance
    1-3  organizations and limiting the liability of health care providers
    1-4  and physicians providing services through a limited liability
    1-5  health maintenance organization.
    1-6        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
    1-7        SECTION 1.  The Texas Health Maintenance Organization Act
    1-8  (Chapter 20A, Vernon's Texas Insurance Code), is amended by
    1-9  designating Sections 1 through 36 as Subchapter A to read as
   1-10  follows:
   1-11                   SUBCHAPTER A.  GENERAL PROVISIONS
   1-12        SECTION 2.  Section 2, Texas Health Maintenance Organization
   1-13  Act (Chapter 20A, Vernon's Texas Insurance Code), is amended by
   1-14  adding Subsection (u) to read as follows:
   1-15        (u)  "Limited liability health maintenance organization"
   1-16  means a health maintenance organization established under
   1-17  Subchapter B of this Act.
   1-18        SECTION 3.  Section 14(f), Texas Health Maintenance
   1-19  Organization Act (Chapter 20A, Vernon's Texas Insurance Code), is
   1-20  amended to read as follows:
   1-21        (f)  Only those persons who comply with the provisions of
   1-22  this Act and are issued a certificate of authority by the
   1-23  commissioner may use the phrases <phrase> "health maintenance
   1-24  organization," "limited liability health maintenance organization,"
    2-1  or "limited liability HMO" or "LLHMO," <or> "HMO," or similar
    2-2  designations in the course of operation.
    2-3        SECTION 4.  Section 16, Texas Health Maintenance Organization
    2-4  Act (Chapter 20A, Vernon's Texas Insurance Code), is amended to
    2-5  read as follows:
    2-6        Sec. 16.  Powers of Insurers and Others.  (a)  An insurance
    2-7  company licensed in this state, pursuant to Chapter 2, 3, or 15 of
    2-8  the Insurance Code, or a group hospital service corporation
    2-9  authorized to do business in this state, may either directly or
   2-10  through a subsidiary or affiliate organize and operate a health
   2-11  maintenance organization or a limited liability health maintenance
   2-12  organization under the provisions of this Act.  Notwithstanding any
   2-13  other law which may be inconsistent herewith, any two or more such
   2-14  insurance companies or group hospital service corporations, or
   2-15  subsidiaries or affiliates thereof, may jointly organize and
   2-16  operate a health maintenance organization or a limited liability
   2-17  health maintenance organization under the provisions of this Act.
   2-18        (b)  Notwithstanding any provision of insurance or group
   2-19  hospital service corporation laws, an insurer or group hospital
   2-20  service corporation may contract with a health maintenance
   2-21  organization or a limited liability health maintenance organization
   2-22  to provide insurance or similar protection against the cost of care
   2-23  provided by a health maintenance organization or a limited
   2-24  liability health maintenance organization and to provide coverage
   2-25  in the event of failure of a health maintenance organization or a
   2-26  limited liability health maintenance organization to meet its
   2-27  obligations.  Among other things, under such contracts, the insurer
    3-1  or group hospital service corporation may make benefit payments to
    3-2  a health maintenance organization or a limited liability health
    3-3  maintenance organization for health care services rendered by
    3-4  physicians or providers pursuant to health care plans.
    3-5        SECTION 5.  The Texas Health Maintenance Organization Act
    3-6  (Chapter 20A, Vernon's Texas Insurance Code), is amended by adding
    3-7  Subchapter B to read as follows:
    3-8          SUBCHAPTER B.  LIMITED LIABILITY HEALTH MAINTENANCE
    3-9                             ORGANIZATION
   3-10        Sec. 61.  ESTABLISHMENT OF LIMITED LIABILITY HEALTH
   3-11  MAINTENANCE ORGANIZATION.  A person may apply to the commissioner
   3-12  and obtain a certificate of authority to establish and operate a
   3-13  limited liability health maintenance organization in compliance
   3-14  with this Act.
   3-15        Sec. 62.  LIMITED LIABILITY.  In a cause of action for
   3-16  treatment, lack of treatment, or other claimed departure from
   3-17  accepted standards of medical care or health care or safety that
   3-18  proximately results in injury to or death of a patient, whether the
   3-19  patient's claim or cause of action sounds in tort or contract, a
   3-20  limited liability health maintenance organization or an employee of
   3-21  or person providing services through a limited liability health
   3-22  maintenance organization is not liable in a civil lawsuit for:
   3-23              (1)  exemplary damages; or
   3-24              (2)  damages in a wrongful death cause of action under
   3-25  Chapter 71, Civil Practice and Remedies Code.
   3-26        Sec. 63.  REQUIREMENTS APPLICABLE.  A limited liability
   3-27  health maintenance organization shall meet all of the requirements
    4-1  of this Act applicable to a health maintenance organization.
    4-2        Sec. 64.  POWERS.  (a)  A limited liability health
    4-3  maintenance organization has all of the powers of a health
    4-4  maintenance organization.
    4-5        (b)  A limited liability health maintenance organization may
    4-6  contract with a school to provide health services to the students
    4-7  of that school.
    4-8        Sec. 65.  REQUIRED SERVICE TO LOW-INCOME PATIENTS.  (a)  A
    4-9  limited liability health maintenance organization shall maintain an
   4-10  enrollment of more than 50 percent low-income patients.
   4-11        (b)  The Texas Department of Health shall adopt rules
   4-12  specifying the income level necessary to qualify as a low-income
   4-13  patient for purposes of this subchapter.
   4-14        Sec. 66.  GOVERNING BODY.  The governing body of a limited
   4-15  liability health maintenance organization:
   4-16              (1)  may include physicians, providers, or other
   4-17  individuals;
   4-18              (2)  must have at least six and not more than nine
   4-19  members; and
   4-20              (3)  may not have a member residing outside the
   4-21  geographical area served by the limited liability health
   4-22  maintenance organization.
   4-23        Sec. 67.  AGENTS.  (a)  A health maintenance organization
   4-24  agent may represent a limited liability health maintenance
   4-25  organization.
   4-26        (b)  An agent representing a limited liability health
   4-27  maintenance organization is subject to all requirements applicable
    5-1  to a health maintenance organization agent under this Act.
    5-2        (c)  An agent acting under this subchapter has all of the
    5-3  powers of a health maintenance organization agent under this Act.
    5-4        SECTION 6.  The importance of this legislation and the
    5-5  crowded condition of the calendars in both houses create an
    5-6  emergency and an imperative public necessity that the
    5-7  constitutional rule requiring bills to be read on three several
    5-8  days in each house be suspended, and this rule is hereby suspended,
    5-9  and that this Act take effect and be in force from and after its
   5-10  passage, and it is so enacted.