By Smithee, Van de Putte H.B. No. 2766
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to fairness and choice to patients and providers under
1-3 managed care health benefit plans; providing a penalty.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. This Act may be cited as the Patient Protection
1-6 Act.
1-7 SECTION 2. The Insurance Code is amended by adding Chapter
1-8 27 to read as follows:
1-9 SUBCHAPTER A. GENERAL PROVISIONS.
1-10 Art. 27.01. Short Title. This chapter may be cited as the
1-11 Patient Protection Act.
1-12 Art. 27.02. Definitions. In this chapter:
1-13 (1) "Academic health center" means an entity that
1-14 operates, or is affiliated with a hospital that receives payments
1-15 under subsection (d)(5)(B) or (h) of section 1886 of the Social
1-16 Security Act (relating to graduate medical education).
1-17 (2) "Centers of excellence" means health facilities,
1-18 including children's hospitals and other pediatric facilities,
1-19 academic health centers, teaching hospitals, and other providers of
1-20 specialized care that are so designated by the commissioner by
1-21 rule.
1-22 (3) "Commissioner" means the Commissioner of
1-23 Insurance.
2-1 (4) "Qualified managed care plan" means a managed care
2-2 plan that the Commissioner certifies, upon application to the
2-3 program, as meeting the requirements of this section.
2-4 (5) "Utilization review law" means Article 21.58A,
2-5 Insurance Code.
2-6 (6) "Managed care plan" means a plan operated by a
2-7 managed care entity that provides for the financing and delivery of
2-8 health care services to persons enrolled in such plan through
2-9 (A) arrangements with selected providers to
2-10 furnish health care services;
2-11 (B) explicit standards for the selection of
2-12 participating providers;
2-13 (C) organizational arrangements for ongoing
2-14 quality assurance, utilization review programs, and dispute
2-15 resolution; and
2-16 (D) financial incentives for persons enrolled in
2-17 the plan to use the participating providers and procedures provided
2-18 for by the plan.
2-19 (7) "Managed care entity" means a licensed insurance
2-20 company, hospital or medical service plan, health maintenance
2-21 organization, or a managed care contractor that operates a managed
2-22 care plan.
2-23 (8) "Managed care contractor" means a person that
2-24 (A) establishes, operates or maintains a network
2-25 of participating providers;
3-1 (B) conducts or arranges for utilization review
3-2 activities; or
3-3 (C) contracts with an insurance company, a
3-4 hospital or medical service plan, or any other entity providing
3-5 coverage for health care services to operate a managed care plan.
3-6 (9) "Participating provider" means a physician,
3-7 dentist, hospital, pharmacy, laboratory, or other appropriately
3-8 state licensed, registered, certified or otherwise state recognized
3-9 provider of health care services or supplies, that has entered into
3-10 an agreement with a managed care entity to provide such services or
3-11 supplies to a patient enrolled in a managed care plan.
3-12 Art. 27.03. Protection of Consumer Choice. Nothing in this
3-13 Act shall be construed as prohibiting the following:
3-14 (1) An individual from purchasing any health care
3-15 services with that individual's own funds, whether such services
3-16 are covered within the individual's standard benefit package or
3-17 from another health care provider or plan.
3-18 (2) Employers from providing any additional coverages.
3-19 SUBCHAPTER B. CERTIFICATION OF MANAGED CARE PLANS.
3-20 Art. 27.11. Certification of Managed Care Plans.
3-21 (a)(1) All managed care plans offering or providing services
3-22 under this Code must be certified under the provisions of this
3-23 chapter.
3-24 (2) The Commissioner shall establish a process for
3-25 certification of managed care plans meeting the requirements of
4-1 this chapter.
4-2 (3) The Commissioner shall establish procedures for
4-3 the periodic review and recertification of qualified managed care
4-4 plans.
4-5 (4) The Commissioner shall terminate the certification
4-6 of a previously qualified managed care plan if the Commissioner
4-7 determines that such plan or program no longer meets the applicable
4-8 requirements for certification. Before effecting a termination,
4-9 the Commissioner shall provide the plan notice and opportunity for
4-10 a hearing on the proposed termination.
4-11 (5) If the Commissioner finds that a national
4-12 accreditation body establishes a requirement or requirements for
4-13 accreditation of a managed care plan that are at least equivalent
4-14 to the requirement(s) established under this chapter the
4-15 Commissioner may, to the extent appropriate, treat a managed care
4-16 plan thus accredited as meeting the requirement(s) of this chapter.
4-17 (6) The Commissioner shall establish, administer and
4-18 enforce certification and renewal fees under this chapter in
4-19 amounts not greater than that necessary to cover the cost of
4-20 administering and enforcing this chapter.
4-21 (b)(1) The Commissioner shall establish standards for the
4-22 certification of qualified managed care plans that conduct business
4-23 in this state, including standards whereby
4-24 (A) Prospective enrollees in a plan must be
4-25 provided information as to the terms and conditions of the plan so
5-1 that they can make informed decisions about accepting a certain
5-2 system of health care delivery. Where the plan is described orally
5-3 to enrollees, easily understood, truthful, and objective terms must
5-4 be used. All written plan descriptions must be in a readable and
5-5 understandable format, consistent with standards developed for
5-6 supplemental insurance coverage under Title XVII of the Social
5-7 Security Act. This format must be standardized so that customers
5-8 can compare the attributes of the plans. Specific items that must
5-9 be included are:
5-10 (i) coverage provisions, benefits,
5-11 including prescription drug coverage, both generic and brand name
5-12 and any exclusions by category of service, provider or physician,
5-13 and if applicable, by specific service;
5-14 (ii) any and all prior authorization or
5-15 other review requirements including preauthorization review,
5-16 concurrent review, post-service review, post payment review and any
5-17 procedures that may lead the patient to be denied coverage for or
5-18 not be provided a particular service;
5-19 (iii) financial arrangements or
5-20 contractual provisions with hospitals, review companies,
5-21 physicians, dentists or any other provider of health care services
5-22 that would limit the services offered, restrict referral or
5-23 treatment options, require a drug formulary or restrict the types
5-24 of drugs available to patients, or negatively affect the
5-25 physician's or dentist's fiduciary responsibility to his or her
6-1 patients, including but not limited to financial incentives not to
6-2 provide medical, dental or other services.
6-3 (iv) explanation of how plan limitations
6-4 impact enrollees, including information on enrollee financial
6-5 responsibility for payment for coinsurance or other non-covered or
6-6 out-of-plan services;
6-7 (v) explanation of the physician or, as
6-8 appropriate, dental network configuration that provides for patient
6-9 access to physicians or dentists including geographic distribution
6-10 of physicians and dentists by specialty and the physician and, as
6-11 appropriate, dentist to enrollee ratio by specialty;
6-12 (vi) loss ratios; and
6-13 (vii) enrollee satisfaction statistics
6-14 (including percent re-enrollment and reasons for leaving plan).
6-15 (B) The plan must demonstrate that covered
6-16 enrollees have reasonably prompt access through the entity's
6-17 provider network to all items and services contained in the package
6-18 of benefits for which coverage is provided (including access to
6-19 emergency services on a 24-hour basis where medically necessary),
6-20 in a manner that assures the continuity of the provision of such
6-21 items and services. Such access shall take into account the
6-22 diverse needs of enrollees, including special language
6-23 requirements, and proximity to the workplaces or residences of
6-24 enrollees.
6-25 (C) If contained within the package of benefits
7-1 for enrollees, the plan must demonstrate access to specialized
7-2 treatment expertise, including care for enrollees with chronic
7-3 diseases, through contracts with centers of excellence. Patients
7-4 in need of specialized treatment may request to receive specialized
7-5 care at an alternative center. As used in this paragraph, the term
7-6 "alternative center" means a center of excellence which is not a
7-7 member of the provider network of the entity providing the plan.
7-8 Such entities shall have an appeals process for patients who are
7-9 refused coverage at an alternative center of excellence. Each plan
7-10 shall make available to enrollees information in an easily
7-11 understood and useful form, that allows such enrollees to make
7-12 valid comparisons among centers of excellence offered by the plan.
7-13 (D) In its establishment of criteria for
7-14 hospital participation, a plan shall be required to accept hospital
7-15 licensure by the Texas Department of Health, certification by the
7-16 Medicare program, (Title XVII of the Social Security Act (42 U.S.C.
7-17 1395, et seq)) or accreditation by the Joint Commission on
7-18 Accreditation of Healthcare Organizations.
7-19 (E) Plans must meet financial reserve
7-20 requirements that are established to assure proper payment for
7-21 covered services provided. An indemnity fund should be established
7-22 to provide for plan failures even when a plan has met the reserve
7-23 requirements.
7-24 (F) All plans shall be required to establish a
7-25 mechanism, with defined rights, under which physicians and dentists
8-1 participating in the plan provide meaningful input into the plan's
8-2 medical or, as appropriate, dental policy, (including coverage for
8-3 new technology and procedures), the development and utilization of
8-4 a prescription drug formulary, utilization review criteria and
8-5 procedures, quality and credentialing criteria, and medical or
8-6 dental management procedures.
8-7 (G) All plans upon request shall make available
8-8 and disclose the application process and qualification requirements
8-9 for credentialing as a provider in the plan. An applicant for
8-10 initial credentials as a provider under the plan must be given the
8-11 reason(s) for denial as a provider if the application for initial
8-12 credentials is denied or otherwise not accepted.
8-13 (H) All plans that accept physicians and
8-14 dentists into their plans must credential those physicians and
8-15 dentists.
8-16 (i) Each application shall be reviewed by
8-17 a credentialing committee with appropriate representation or input
8-18 from the applicant's medical or, as appropriate, dental specialty.
8-19 (ii) Credentialing shall be based on
8-20 objective standards of quality with input from physicians or, as
8-21 appropriate, dentists credentialed in the plan and such standards
8-22 shall be available to applicants and enrollees. When economic
8-23 considerations are part of the decision to select or deselect a
8-24 provider from the plan, objective criteria must be used and must be
8-25 available to applicants, participating physicians, dentists and
9-1 enrollees. Any economic profiling of physicians or dentists must
9-2 be adjusted to recognize case mix, disease, physiologic and
9-3 behavioral severity of the disease, including comorbidities, age
9-4 and sex risk adjustment of patients and other features of a
9-5 physician's or dentist's practice that may account for higher than
9-6 or lower than expected costs to assure fair comparisons are made.
9-7 Profiles must be made available to those so profiled. When
9-8 graduate medical education is a consideration in credentialing,
9-9 equal recognition will be given to training programs accredited by
9-10 the Accrediting Council on Graduate Medical Education and by the
9-11 American Osteopathic Association.
9-12 (iii) Plans shall be prohibited from
9-13 discriminating against enrollees with expensive medical conditions
9-14 requiring expensive tests and procedures to adequately diagnose and
9-15 treat enrollees by excluding practitioners who treat such
9-16 enrollees.
9-17 (iv) All decisions shall be made on the
9-18 record, and the applicant shall be provided with all reasons used
9-19 if the application is denied or the contract not renewed.
9-20 (v) Plans shall not be allowed to include
9-21 clauses in physician, dentist or other provider contracts that
9-22 allow for the plan to terminate the contract "without cause."
9-23 (vi) There shall be a due process appeal
9-24 from all adverse decisions. The Commissioner shall establish a due
9-25 process appeal mechanism. The appeals process will be presumed to
10-1 be reasonable if it complies with the appeals process set forth in
10-2 the Health Care Quality Improvement Act of 1986, 42 U.S.C. Sec.
10-3 11101-11151.
10-4 (vii) Prior to initiation of a proceeding
10-5 leading to termination of a contract "for cause," the physician or,
10-6 as appropriate, dentists shall be provided notice, an opportunity
10-7 for discussion, and an opportunity to enter into and complete a
10-8 corrective action plan, except in cases where there is imminent
10-9 harm to patient health or an action by a state medical or, as
10-10 appropriate, dental board or other government agency that
10-11 effectively impairs the physician's or dentist's ability to
10-12 practice medicine or dentistry within the jurisdiction.
10-13 (I) Procedures shall be established to ensure
10-14 that all applicable Federal and State laws designed to protect the
10-15 confidentiality of provider and individual medical and dental
10-16 records are followed.
10-17 (J) Plans must ensure that each enrollee is able
10-18 to choose a primary care physician and, as appropriate, dentist
10-19 from among participating physicians and dentists and change that
10-20 selection as appropriate.
10-21 (K) Plans must:
10-22 (i) cover medically necessary emergency
10-23 care services provided to covered individuals (including trauma
10-24 services, such as those provided by designated trauma centers),
10-25 without regard to whether or not the provider furnishing such
11-1 services has a contractual (or other) arrangement with the entity
11-2 to provide items or services to covered individuals and, in the
11-3 case of services furnished for the treatment of an emergency
11-4 medical condition (as defined in section 1867(e)(1) of the Social
11-5 Security Act), without regard to prior authorizations;
11-6 (ii) provide that the prior authorization
11-7 requirement for medically necessary services or stabilizing
11-8 treatment in the emergency room shall be deemed to be approved
11-9 unless denied within 1 hour of a required request; and
11-10 (iii) cover any screenings or evaluations
11-11 that are required to be performed in the emergency room pursuant to
11-12 state or federal law.
11-13 (2) Plans must ensure that enrollees, in plans where
11-14 prior authorization is a condition to coverage of a service, are
11-15 required to sign medical and dental information release consent
11-16 forms upon enrollment for use where services requiring prior
11-17 authorization are recommended or proposed by their physician or
11-18 dentist;
11-19 (3) When prior approval for a service or other covered
11-20 item is obtained, it shall be considered approval for all purposes,
11-21 and the service shall be considered to be covered unless there was
11-22 fraud or incorrect information provided at the time such prior
11-23 approval was obtained.
11-24 (4) Continuity of patient care is maintained when
11-25 physicians or dentists are deselected or otherwise are no longer
12-1 participating providers under the plan by providing for the
12-2 immediate reimbursement for copies of medical or dental records
12-3 that are created, kept or maintained by a physician or dentist and
12-4 provided by the physician or dentist for the patient or someone on
12-5 his behalf.
12-6 (5) Not withstanding the provision of any other law,
12-7 all qualified managed care programs are subject to and shall meet
12-8 the requirements of the utilization review law.
12-9 (6) Standards shall first be established under this
12-10 chapter by not later than 12 months after the date of the enactment
12-11 of this chapter.
12-12 (7) The Commissioner shall periodically review the
12-13 standards established under this chapter, and may revise the
12-14 standards from time to time to assure that such standards continue
12-15 to reflect appropriate policies and practices for the
12-16 cost-effective and medically and dentally appropriate use of
12-17 services within managed care plans.
12-18 SUBCHAPTER C. CHOICE REQUIREMENTS AND PLANS.
12-19 Art. 27.21. Choice Requirements for Point of Service Plans.
12-20 (1) Each health benefit plan that restricts access to
12-21 providers shall offer to all eligible enrollees the opportunity to
12-22 obtain coverage for out-of-network services through a "point of
12-23 service" plan, as defined by subparagraph (2), at the time of
12-24 enrollment and at least for a continuous one-month period annually
12-25 thereafter.
13-1 (2) For purposes of this chapter, an "out-of-network"
13-2 or "point of service" plan provides additional coverage and/or
13-3 access to care provided by non-network providers to an eligible
13-4 enrollee of a health plan that restricts access to items and
13-5 services provided by a health care provider who is not a member of
13-6 the plan's provider network (as defined in subparagraph (3)), or,
13-7 that may cover any other services the enrollees seeks, whether such
13-8 services are provided in or outside of the enrollee's plan.
13-9 (3) A "provider network" means, with respect to a
13-10 health plan that restricts access, those providers who have entered
13-11 into a contract or agreement with the plan under which such
13-12 providers are obligated to provide items and services in the
13-13 standard benefits package to eligible individuals enrolled in the
13-14 plan, or have an agreement to provide services on a fee-for-service
13-15 basis.
13-16 (4) Premiums. A plan may charge an enrollee who opts
13-17 to obtain point of service coverage an alternative premium that
13-18 takes into account the actuarial value of such coverage.
13-19 (5) Co-payments. A point of service plan may require
13-20 payment of coinsurance for an out-of-network item or service, as
13-21 follows:
13-22 (A) The applicable coinsurance percentage shall
13-23 not be greater than 20 percent of payment for items and services;
13-24 and
13-25 (B) The applicable coinsurance percentage may be
14-1 applied differentially with respect to out-of-network items and
14-2 services, subject to the requirements of section 27.11(b)(1)(K) of
14-3 this chapter.
14-4 (6) Payment Disclosure Requirement. All sponsors of
14-5 point of service plans and physicians and dentists participating in
14-6 such plans shall be required to disclose their fees, applicable
14-7 payment schedules, coinsurance requirements or any other financial
14-8 requirements that affect patient payment levels.
14-9 SUBCHAPTER D. ENFORCEMENT; PENALTIES.
14-10 Art. 27.31. Violations.
14-11 (a) If the Commissioner believes that a managed care entity
14-12 or managed care contractor has violated or is violating this
14-13 chapter, the Commissioner shall notify the managed care entity or
14-14 managed care contractor of the alleged violation and may compel the
14-15 production of any and all documents or other information necessary
14-16 to determine whether or not this chapter has been or is being
14-17 violated.
14-18 (b) The Commissioner may bring an injunctive action to stop
14-19 a violation or potential violation of this chapter.
14-20 (c) If applicable and after notice and hearing, the
14-21 Commissioner may for a violation of this chapter:
14-22 (1) impose sanctions under Section 7, Article 1.10 of
14-23 this Code; or
14-24 (2) issue a cease and desist order under Article 1.10A
14-25 of this Code.
15-1 (d) The Commissioner may recover reasonable costs, including
15-2 attorneys' fees for an action brought under this subchapter.
15-3 SECTION 3. Art. 21.58A, Sections (4) and (14), Insurance
15-4 Code are amended to read as follows:
15-5 Sec. 4. Standards for utilization review. (a) As a
15-6 condition of certification or renewal thereof, a utilization review
15-7 agent shall be required to maintain compliance with the provisions
15-8 of this section.
15-9 (b) The utilization review plan, including reconsideration
15-10 and appeal requirements, shall be reviewed by a physician and
15-11 conducted in accordance with standards developed with input from
15-12 appropriate health care providers and approved by a physician.
15-13 (c)(1) Personnel employed by or under contract with the
15-14 utilization review agent to perform utilization review shall be
15-15 appropriately trained and qualified. Personnel who obtain
15-16 information directly from the physician or health care provider,
15-17 either orally or in writing, and who are not physicians shall be
15-18 nurses, physician assistants, registered records administrators, or
15-19 accredited records technicians, who are either licensed or
15-20 certified, or shall be individuals who have received formal
15-21 orientation and training in accordance with policies and procedures
15-22 established by the utilization review agent to assure compliance
15-23 with this section, and a description of such policies and
15-24 procedures shall be filed with the commissioner. This provision
15-25 shall not be interpreted to require such qualifications for
16-1 personnel who perform clerical or administrative tasks.
16-2 (2) Upon request, physicians or as appropriate,
16-3 dentists, will be provided the names and credentials of all
16-4 individuals conducting utilization review, subject to reasonable
16-5 safeguards and standards.
16-6 (d) A utilization review agent shall not set or impose any
16-7 notice or other review procedures contrary to the requirements of
16-8 the health insurance policy or health benefit plan.
16-9 (e) Unless approved for an individual patient by the
16-10 provider of record or modified by contract, a utilization review
16-11 agent shall be prohibited from observing, participating in, or
16-12 otherwise being present during a patient's examination, treatment,
16-13 procedure, or therapy. In no event shall this section otherwise be
16-14 construed to limit or deny contact with a patient for purposes of
16-15 conducting utilization review unless otherwise specifically
16-16 prohibited by law.
16-17 (f) A utilization review agent may not permit or provide
16-18 compensation or any thing of value to its employees or agents,
16-19 condition employment of its employee or agent evaluations, or set
16-20 its employee or agent performance standards, based on the amount of
16-21 volume of adverse determinations, reductions or limitations on
16-22 lengths of stay, benefits, services, or charges or on the number of
16-23 frequency of telephone calls or other contacts with health care
16-24 providers or patients, which are inconsistent with the provisions
16-25 of this article.
17-1 (g) A health care provider may designate one or more
17-2 individuals as the initial contact or contacts for utilization
17-3 review agents seeking routine information or data. In no event
17-4 shall the designation of such an individual or individuals preclude
17-5 a utilization review agent or medical advisor from contacting a
17-6 health care provider or others in his or her employ where a review
17-7 might otherwise be unreasonably delayed or where the designated
17-8 individual is unable to provide the necessary information or data
17-9 requested by the utilization review agent.
17-10 (h) Utilization review conducted by a utilization review
17-11 agent shall be under the direction of a physician licensed to
17-12 practice medicine by the Texas State Board of Medical Examiners <a
17-13 state licensing agency in the United States.> or, as appropriate, a
17-14 dentist licensed to practice dentistry by the State Board of Dental
17-15 Examiners.
17-16 (i) Each utilization review agent shall utilize written
17-17 medically acceptable screening criteria and review procedures which
17-18 are established and periodically evaluated and updated with
17-19 appropriate involvement from physicians, including practicing
17-20 physicians, and other health care providers. Such written
17-21 screening criteria and review procedures shall be available for
17-22 review and inspection by the commissioner and copying as necessary
17-23 for the commissioner to carry out his or her lawful duties under
17-24 this code, provided, however, that any information obtained or
17-25 acquired under the authority of this subsection and article is
18-1 confidential and privileged and not subject to the open records law
18-2 or subpoena except to the extent necessary for the board of
18-3 commissioner to enforce this article.
18-4 (j) A utilization review agent may not engage in unnecessary
18-5 or unreasonable repetitive contacts with the health care provider
18-6 or patient and shall base the frequency of contacts or reviews on
18-7 the severity or complexity of the patient's condition or on
18-8 necessary treatment and discharge planning activity.
18-9 (k) Subject to the notice requirements of Section 5 of this
18-10 article, in any instance where the utilization review agent is
18-11 questioning the medical necessity or appropriateness of health care
18-12 services, the health care provider who ordered the services shall
18-13 be afforded a reasonable opportunity to discuss the plan of
18-14 treatment for the patient and the clinical basis for the
18-15 utilization review agent's decision with a physician or, in the
18-16 case of a dental plan with a dentist, prior to issuance of an
18-17 adverse determination.
18-18 (l) <Unless precluded or modified by contract, a> A
18-19 utilization review agent shall reimburse health care providers for
18-20 the reasonable costs for providing medical information in writing,
18-21 including copying and transmitting any requested patient records or
18-22 other documents. A health care provider's charges for providing
18-23 medical information to a utilization review agent shall not exceed
18-24 the cost of copying set by rule of the Texas Workers' Compensation
18-25 Commission for records and may not include any costs that are
19-1 otherwise recouped as a part of the charge for health care.
19-2 (m) A utilization review agent shall establish and maintain
19-3 a complaint system that provides reasonable procedures for the
19-4 resolution of written complaints initiated by enrollees, patients,
19-5 or health care providers concerning the utilization review and
19-6 shall maintain records of such written complaints for two years
19-7 from the time the complaints are filed. The complaint procedure
19-8 shall include a written response to the complainant by the agent
19-9 within 60 days. The utilization review agent shall submit to the
19-10 commissioner a summary report of all complaints at such times and
19-11 in such forms as the board may require and shall permit the
19-12 commissioner to examine the complaints and all relevant documents
19-13 at any time.
19-14 (n) The utilization review agent may delegate utilization
19-15 review to qualified personnel in the hospital or health care
19-16 facility where the health care services were or are to be provided.
19-17 Sec. 14(a) This article shall not apply to a person who
19-18 provides information to enrollees about scope of coverage or
19-19 benefits provided under a health insurance policy or health benefit
19-20 plan and who does not determine whether particular health care
19-21 services provided or to be provided to an enrollee are medically
19-22 necessary or appropriate.
19-23 (b)(1) This article shall not apply to any contract with the
19-24 federal government for utilization review of patients eligible for
19-25 services under Title XVIII or XIX of the Social Security Act (42
20-1 U.S.C. Section 1395 et seq. or Section 1396 et seq.).
20-2 (b)(2) This article shall not apply to <the Texas Medicaid
20-3 Program,> the chronically ill and disabled children's services
20-4 program created pursuant to Chapter 35, Health and Safety Code,
20-5 <any program administered under Title 2, Human Resources Code> any
20-6 program of the Texas Department of Mental Health and Mental
20-7 Retardation, or any program of the Texas Department of Criminal
20-8 Justice.
20-9 (c) This article shall not apply to utilization review of
20-10 health care services provided to patients under the authority of
20-11 the Texas Workers' Compensation Act (Article 8308-1.01 et seq.,
20-12 Vernon's Texas Civil Statutes).
20-13 <(d) This article shall not apply to utilization review of
20-14 health care services provided under a policy or contract of
20-15 automobile insurance promulgated by the board under Subchapter A,
20-16 Chapter 5 of this code or issued pursuant to Article 1.14-2 of this
20-17 code.>
20-18 (d) <(e)> This article shall not apply to the terms or
20-19 benefits of employee welfare benefit plans as defined in Section
20-20 31(I) of the Employee Retirement Income Security Act of 1974 (29
20-21 U.S.C. Section 1002).
20-22 (e) <(f)> Any regulations promulgated pursuant to this
20-23 article shall relate only to persons or entities subject to this
20-24 article.
20-25 <(g) A health maintenance organization is not subject to
21-1 this article except as expressly provided in this subsection and
21-2 Subsection (i) of this section. If such health maintenance
21-3 organization performs utilization review as defined herein, it
21-4 shall, as a condition of licensure:>
21-5 <(1) comply with Sections 4(b), (c), (e), (f), (h),
21-6 (i), and (l) of this article, and the board shall promulgate rules
21-7 for appropriate verification and enforcement of compliance.
21-8 However, nothing in this article shall be construed to prohibit or
21-9 limit the distribution of a proportion of the savings from the
21-10 reduction or elimination of unnecessary medical services,
21-11 treatment, supplies, confinements, or days of confinement, in a
21-12 health care facility through profit sharing, bonus, or withhold
21-13 arrangements to participating physicians or participating health
21-14 care providers for rendering health care services to enrollees;>
21-15 <(2) establish and maintain a system for:>
21-16 <(A) handling and responding to complaints by
21-17 enrollees, patients, or health care providers;>
21-18 <(B) providing health care providers with notice
21-19 of medical necessity or program requirements that have not been
21-20 met, including a reasonable opportunity to discuss the plan of
21-21 treatment and clinical basis for a utilization review determination
21-22 with a physician; and>
21-23 <(C) providing the enrollee, patient, and health
21-24 care provider an opportunity to appeal the determination; and>
21-25 <(3) submit to assessment of maintenance taxes under
22-1 Article 20A.33, Texas Health Maintenance Organization Act (Article
22-2 20A.33, Vernon's Texas Insurance Code), to cover the costs of
22-3 administering compliance of health maintenance organizations under
22-4 this section.>
22-5 (f) <(h)> An insurer which delivers or issues for delivery a
22-6 health insurance policy in Texas and is subject to this code is not
22-7 subject to this article except as expressly provided in this
22-8 subsection and Subsection (i) of this section. If an insurer
22-9 performs utilization review as defined herein it shall, as a
22-10 condition of licensure, comply with Sections 4 through 8 of this
22-11 article, and the board shall promulgate rules for appropriate
22-12 verification and enforcement of compliance. Such insurers shall be
22-13 subject to assessment of maintenance tax under Article 4.17 of this
22-14 code to cover the costs of administering compliance of insurers
22-15 under this section.
22-16 (g) <(i)> However, when an insurer subject to this code or a
22-17 health maintenance organization performs utilization review for a
22-18 person or entity subject to this article other than the one for
22-19 which it is the payor, such insurer or health maintenance
22-20 organization shall be required to obtain a certificate under
22-21 section 3 of this article and comply with all the provisions of
22-22 this article.
22-23 SECTION 4. Effective date. Chapter 27, Insurance Code, as
22-24 added by this section, takes effect June 1, 1996.
22-25 SECTION 5. Emergency. The importance of this legislation
23-1 and the crowded condition of the calendars in both houses create an
23-2 emergency and an imperative public necessity that the
23-3 constitutional rule requiring bills to be read on three several
23-4 days in each house be suspended, and this rule is hereby suspended.