By Smithee, Van de Putte H.B. No. 2766
Substitute the following for H.B. No. 2766:
By Smithee C.S.H.B. No. 2766
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to providing fairness and choice to patient and providers
1-3 under managed care health benefit plans; providing penalties.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. The Insurance Code is amended by adding
1-6 Subchapter G to Chapter 21.
1-7 SUBCHAPTER G. PATIENT PROTECTION ACT
1-8 Art. 21.101. SHORT TITLE. This chapter may be cited as the
1-9 Patient Protection Act.
1-10 Art. 21.102. DEFINITIONS. In this subchapter:
1-11 (1) "Commissioner" means the Commissioner of
1-12 Insurance.
1-13 (2) "Emergency care services" means medical services
1-14 provided for an emergency medical condition.
1-15 (3) "Emergency medical condition" means:
1-16 (A) a medical condition manifesting itself by
1-17 acute symptoms of sufficient severity, including severe pain, such
1-18 that the absence of immediate medical attention could reasonably be
1-19 expected to result in:
1-20 (i) placing the health of the individual
1-21 (or, with respect to a pregnant woman, the health of the woman or
1-22 her unborn child) in serious jeopardy;
1-23 (ii) serious impairment to bodily
2-1 functions; or
2-2 (iii) serious dysfunction of any bodily
2-3 organ or part; or
2-4 (B) with respect to a pregnant woman who is
2-5 having contractions,
2-6 (i) that there is inadequate time to
2-7 effect a safe transfer to another hospital before delivery, or
2-8 (ii) that transfer may pose a threat to
2-9 the health or safety of the woman or the unborn child.
2-10 (4) "Managed care entity" means a licensed insurance
2-11 company, group hospital service corporation licensed under Chapter
2-12 20, Texas Ins. Code, or health maintenance organization.
2-13 (5) "Managed care plan" or "plan" means a plan
2-14 operated by a licensed insurance company, group hospital service
2-15 plan, or health maintenance organization that provides for the
2-16 financing and delivery of health care services to persons enrolled
2-17 in such plan through:
2-18 (A) arrangements with selected providers to
2-19 furnish health care services;
2-20 (B) explicit standards for the selection of
2-21 participating providers;
2-22 (C) organizational arrangements for ongoing
2-23 quality assurance, utilization review programs, and dispute
2-24 resolution; or
2-25 (D) differential coverage or payments or
3-1 financial incentives for persons enrolled in the plan to use the
3-2 participating providers and procedures provided for by the plan.
3-3 (6) "Prospective enrollee" means an individual
3-4 eligible for enrollment in a managed care plan offered by that
3-5 individual's employer.
3-6 (7) "Utilization review law" means Article 21.58A of
3-7 this code.
3-8 Art. 21.103. STANDARDS. (a)(1) The commissioner shall
3-9 promulgate rules for managed care entities that conduct business in
3-10 this state, including standards ensuring compliance with this
3-11 subsection.
3-12 (2) Prospective enrollees in managed care plans must
3-13 be provided information as to the terms and conditions of the plan.
3-14 All written plan descriptions must be in a readable and
3-15 understandable format. Specific items that must be included are:
3-16 (A) coverage provisions, benefits, including
3-17 prescription drug coverage, both generic and brand name, and any
3-18 exclusions by category of service, provider, or physician and, if
3-19 applicable, by specific service, or types of drugs;
3-20 (B) All prior authorization or other review
3-21 requirements including preauthorization review, concurrent review,
3-22 postservice review, and postpayment review,
3-23 (C) an explanation of enrollee financial
3-24 responsibility for payment for coinsurance or other noncovered or
3-25 out-of-plan services;
4-1 (D) Disclosure to enrollees that includes the
4-2 following language:
4-3 YOUR RIGHTS UNDER TEXAS LAW:
4-4 "As a participant in this medical plan, you have the right to
4-5 information about the plan, such as how it operates, what general
4-6 types of financial arrangements exist between providers and the
4-7 plan, names and locations of providers, the numbers of enrollees
4-8 and providers in the plan, the percentages of premiums allocated
4-9 for medical care, administrative costs and profit, and an
4-10 explanation of the benefits to which participants are entitled
4-11 under the terms of the plan".
4-12 (E) The plan shall provide a phone number and
4-13 address for the prospective enrollee to obtain additional
4-14 information concerning the items in subsection D.
4-15 (F) The plan may comply with the requirement in
4-16 subsection D regarding the percentage of premium allocated for
4-17 medical care, administrative costs, and profit by providing the
4-18 information in its latest annual financial statement submitted to
4-19 the Texas Department of Insurance.
4-20 (3) The entity must demonstrate that covered enrollees
4-21 have adequate access through the entity's provider network to all
4-22 items and services contained in the package of benefits for which
4-23 coverage is provided, including access to emergency services on a
4-24 24-hour basis where medically necessary. Such access shall take
4-25 into account the diverse needs of enrollees.
5-1 (4) The plan shall provide to the Commissioner, for
5-2 information, an explanation of the targeted physician or, as
5-3 appropriate, dental network configuration including geographic
5-4 distribution of physicians and dentists by specialty and the
5-5 physician and, as appropriate, dentist to enrollee ratio by
5-6 specialty. Such information shall be filed upon establishment of a
5-7 new plan, expansion of a service area, no less than annually, and
5-8 when such network configuration targets are significantly modified.
5-9 (5) In the development of the plan's criteria for
5-10 hospital participation, if a hospital is certified by the Medicare
5-11 program (Title XVIII of the Social Security Act (42 U.S.C. 1395, et
5-12 seq.)), or accredited by the Joint Commission on Accreditation of
5-13 Healthcare Organizations, the managed care plan shall accept such
5-14 certification or accreditation.
5-15 (6) Financial incentive program shall not limit
5-16 medically necessary and appropriate services.
5-17 (7) All plans shall be required to establish a
5-18 mechanism under which physicians or, as appropriate, dentists
5-19 participating in the plan provide consultation and advice on the
5-20 plan's medical or dental policy including coverage of new
5-21 technology and procedures, the development and utilization of a
5-22 prescription drug formulary, utilization review criteria and
5-23 procedures, quality and credentialing criteria, and medical or
5-24 dental management procedures.
5-25 (8) All plans on request shall make available and
6-1 disclose to providers, the application process and qualification
6-2 requirements for participation as a provider in the plan. Each
6-3 physician or dentist not selected upon initial application shall be
6-4 given the reason or reasons for non-selection.
6-5 (9)(A) When plans accept physicians and dentists, they
6-6 must credential those physicians and dentists.
6-7 (B) Each application shall be reviewed by a
6-8 credentialing committee composed of network participating
6-9 physicians or dentists.
6-10 (C) Credentialing shall be based on identified
6-11 standards with consultation from physicians or dentists
6-12 credentialed in the plan, and such standards shall be available to
6-13 applicants. When economic considerations are part of the decision
6-14 to select or deselect a provider from the plan, identified criteria
6-15 must be used and must be available to applicants, participating
6-16 physicians, and dentists. Any economic profile of physicians or
6-17 dentists must be adjusted to recognize the characteristics of a
6-18 physician's or dentist's practice that may account for variations
6-19 from expected costs.
6-20 (D) Plans that conduct or utilize economic
6-21 profiling of physicians or dentists within the plan shall, on a
6-22 periodic basis, make the profile available to the appropriate
6-23 provider.
6-24 (E) Plans may not exclude a physician or dentist
6-25 solely on the basis of specialty practice nor the anticipated
7-1 patient characteristics of that physician or dentist. However,
7-2 nothing in this Act prohibits a plan from rejecting an application
7-3 based upon the plan's determination that it has a sufficient number
7-4 of qualified providers.
7-5 (F) Applicants shall be provided with the
7-6 reasons for credentialing denial or contract nonrenewal.
7-7 (G) Prior to termination of a contract the
7-8 physician or dentist shall be provided a written explanation of the
7-9 reasons for termination, an opportunity for discussion, and an
7-10 opportunity to enter into and complete a corrective action plan, if
7-11 appropriate, as determined by the plan. Except in cases in which
7-12 there is imminent harm to patient health or an action by a state
7-13 medical or dental board or other government agency that effectively
7-14 impairs the physician's or dentist's ability to practice medicine
7-15 or dentistry within the jurisdiction, or in cases of fraud or
7-16 malfeasance, upon request and prior to termination, the physician
7-17 or dentist is entitled to a review by a plan advisory panel
7-18 composed of his or her peers of the proposed action of the plan.
7-19 Such review may include the appropriateness and requirements of a
7-20 corrective action plan. The decision of the advisory panel shall
7-21 be considered but is not binding on the plan.
7-22 (H) If the action that is under consideration is
7-23 of a type that must be reported to the National Practitioner Data
7-24 Bank or a state medical board under federal or state law, the
7-25 physician's procedural rights, must meet the standards set forth in
8-1 the federal Health Care Quality Improvement Act of 1986, 42 U.S.C.,
8-2 Secs. 11101-11152. For purposes of this subdivision (H), a managed
8-3 care entity shall be considered a health care entity as defined in
8-4 Article 4495(b) Texas Revised Civil Statutes, Section 1.03(a)(5).
8-5 (I) The plan must establish reasonable
8-6 procedures for assuring a transition of enrollees of the plan to
8-7 new physicians or dentists.
8-8 (J) When contracts with physicians or dentists
8-9 are terminated under the plan, the plan shall reimburse the
8-10 physician or dentist the reasonable cost for copies of medical or
8-11 dental records that are created, kept, or maintained by a physician
8-12 or dentist and requested by the patient to be provided by the
8-13 physician or dentist to another physician or dentist. If a
8-14 physician or dentist terminates the contract with the plan, the
8-15 physician or dentist shall bear the reasonable cost of providing
8-16 copies of medical or dental records that are created, kept, or
8-17 maintained by a physician or dentist and provided upon request from
8-18 the patient, by the physician or dentist to a provider designated
8-19 by the patient.
8-20 (10) Plans must: (A) cover emergency care services
8-21 provided to covered individuals, without regard to whether or not
8-22 the provider furnishing such services has a contractual or other
8-23 arrangement with the entity to provide items or services to covered
8-24 individuals including the treatment and stabilization of an
8-25 emergency medical condition, as defined herein;
9-1 (B) provide that the prior authorization
9-2 requirement for medically necessary services provided or
9-3 originating in a hospital emergency department following treatment
9-4 or stabilization of an emergency medical condition shall be deemed
9-5 to be approved unless denied in the time appropriate to the
9-6 circumstances relating to the delivery of such services and the
9-7 condition of the patient, as determined by the treating physician;
9-8 and
9-9 (C) cover any medical screening examination to
9-10 determine whether or not an emergency medical condition exists or
9-11 other evaluation required by state or federal law to be provided in
9-12 the emergency department of a hospital.
9-13 (11) A plan for which prior authorization is a
9-14 condition to coverage of a service must ensure that enrollees are
9-15 required to sign medical and dental information release consent
9-16 forms on enrollment.
9-17 (12) Notwithstanding the provision of any other law,
9-18 all managed care plans are subject to and shall meet the
9-19 requirements of the utilization review law.
9-20 Art. 21.105. VIOLATIONS. (a) If applicable and after
9-21 notice and hearing, the commissioner may, for a violation of this
9-22 chapter:
9-23 (1) impose sanctions under Section 7, Article 1.10 of
9-24 this code; or
9-25 (2) issue a cease and desist order under Article 1.10A
10-1 of this code.
10-2 (b) The authority vested in the Commissioner under this
10-3 Article shall not be construed in any way to limit the authority
10-4 vested in the Commissioner under Chapter One of this Code to
10-5 administer, enforce and carry out the provisions of this Act.
10-6 (c) Nothing in this Subchapter nor rules promulgated
10-7 thereunder shall:
10-8 (1) provide a private cause of action for damages or
10-9 create a standard of care, obligation or duty which provides the
10-10 basis for a private cause of action for damages; or
10-11 (2) abrogate any statutory or common law cause of
10-12 action, administrative remedy or defense otherwise available and
10-13 existing prior to the effective date of this Act.
10-14 (d) A health care provider aggrieved by the action of a
10-15 health care plan may petition the Commissioner for relief within 30
10-16 days of the action. The health care provider must provide notice
10-17 of the petition to the health care plan. The Commissioner may:
10-18 (1) deny the petition;
10-19 (2) issue a cease and desist order; or
10-20 (3) decide to conduct a contested case hearing in
10-21 accordance with the Administrative Procedures Act after providing
10-22 notice to the health care provider and the managed care plan. If
10-23 the Commissioner does not act within 90 days of the date the
10-24 petition is filed, the petition is deemed to have been denied. If
10-25 the Commissioner elects to conduct a contested case hearing and the
11-1 Commissioner does not render a decision within 180 days of the date
11-2 the petition was filed, the petition is deemed to have been denied.
11-3 The parties may agree to extend the deadline provided in this
11-4 subsection.
11-5 SECTION 2. Section 14, Article 21.58A, Insurance Code, is
11-6 amended to read as follows:
11-7 Sec. 14. Application. (a) This article shall not apply to
11-8 a person who provides information to enrollees about scope of
11-9 coverage or benefits provided under a health insurance policy or
11-10 health benefit plan and who does not determine whether particular
11-11 health care services provided or to be provided to and are
11-12 medically necessary or appropriate.
11-13 (b)(1) This article shall not apply to any contract with the
11-14 federal government for utilization review of patients eligible for
11-15 services under Title XVIII or XIX of the Social Security Act (42
11-16 U.S.C. Section 1395 et seq. or Section 1396 et seq.).
11-17 (2) This article shall not apply to the Texas Medicaid
11-18 Program, the chronically ill and disabled children's services
11-19 program created pursuant to Chapter 35, Health and Safety Code, any
11-20 program administered under Title 2, Human Resources Code, any
11-21 program of the Texas Department of Mental Health and Mental
11-22 Retardation, or any program of the Texas Department of Criminal
11-23 Justice.
11-24 (c) This article shall not apply to utilization review of
11-25 health care services provided to patients under the authority of
12-1 the Texas Workers' Compensation Act (Article 8308-1.01 et seq.,
12-2 Vernon's Texas Civil Statutes).
12-3 (d) This article shall not apply to utilization review of
12-4 health care services provided under a policy of contract of
12-5 automobile insurance promulgated by the board under Subchapter A,
12-6 Chapter 5 of this code of issued pursuant to Article 1.14-2 of this
12-7 code.
12-8 (e) This article shall not apply to the terms or benefits of
12-9 employee welfare benefit plans as defined in Section 31(I) of the
12-10 Employee Retirement Income Security Act of 1974 (29 U.S.C. Section
12-11 1002).
12-12 (f) Any regulations promulgated pursuant to this article
12-13 shall relate only to persons or entities subject to this article.
12-14 (g) <A health maintenance organization is not subject to
12-15 this article except as expressly provided in this subsection and
12-16 Subsection (i) of this section. If such health maintenance
12-17 organization performs utilization review as defined herein, it
12-18 shall, as a condition of licensure:>
12-19 <(1) comply with Sections 4(b), (c), (e), (f), (h),
12-20 (i), and (l) of this article, and the board shall promulgate rules
12-21 for appropriate verification and enforcement of compliance.>
12-22 However, nothing in this article shall be construed to prohibit or
12-23 limit the distribution of a proportion of the savings from the
12-24 reduction or elimination of unnecessary medical services,
12-25 treatment, supplies, confinements, or days of confinement in a
13-1 health care facility through profit sharing, bonus, or withhold
13-2 arrangements to participating physicians or participating health
13-3 care providers for rendering health care services to enrollees;
13-4 <(2) establish and maintain a system for:>
13-5 <(A) handling and responding to complaints by
13-6 enrollees, patients, or health care providers;>
13-7 <(B) providing health care providers with notice
13-8 of medical necessity or program requirements that have not been
13-9 met, including a reasonable opportunity to discuss the plan of
13-10 treatment and clinical basis for a utilization review determination
13-11 with a physician; and>
13-12 <(C) providing the enrollee, patient, and health
13-13 care provider an opportunity to appeal the determination; and>
13-14 <(3) submit to assessment of maintenance taxes under
13-15 Article 20A.33, Texas Health Maintenance Organization Act (Article
13-16 20A.33, Vernon's Texas Insurance Code), to cover the costs of
13-17 administering compliance of health maintenance organizations under
13-18 this section.>
13-19 (h) An insurer or HMO which delivers or issues for delivery
13-20 a health insurance policy or coverage agreement in Texas and is
13-21 subject to this code is not subject to this article except as
13-22 expressly provided in this subsection and Subsection (i) of this
13-23 section. If an insurer performs utilization review as defined
13-24 herein it shall, as a condition of licensure, comply with Sections
13-25 4 through 8 of this article, and the board shall promulgate rules
14-1 for appropriate verification and enforcement of compliance. If a
14-2 health maintenance organization performs utilization review as
14-3 defined herein, it shall, as a condition of licensure, comply with
14-4 this article, and the board shall promulgate rules for appropriate
14-5 verification and enforcement of compliance. Such insurers and HMOs
14-6 shall be subject to assessment of maintenance tax under Article
14-7 4.17 of this code or Article 20A.33, Texas Health Maintenance
14-8 Organization Act, to cover the costs of administering compliance of
14-9 insurers and HMOs under this section.
14-10 (i) However, when an insurer subject to this code or a
14-11 health maintenance organization performs utilization review for a
14-12 person or entity subject to this article other than one for which
14-13 it is the payor, such insurer or health maintenance organization
14-14 shall be required to obtain a certificate under Section 3 of this
14-15 article and comply with all the provisions of this article.
14-16 SECTION 3. Subchapter G. Chapter 21, Insurance Code, as
14-17 added by Section 1 of this Act, takes effect June 1, 1996.
14-18 SECTION 4. The importance of this legislation and the
14-19 crowded condition of the calendars in both houses create an
14-20 emergency and an imperative public necessity that the
14-21 constitutional rule requiring bills to be read on three several
14-22 days in each house be suspended, and this rule is hereby suspended.