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.