H.B. No. 3111
1-1 AN ACT
1-2 relating to the delivery of health care by certain nonprofit health
1-3 corporations.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Subchapter E, Chapter 21, Insurance Code, is
1-6 amended by adding Article 21.52F to read as follows:
1-7 Art. 21.52F. CERTIFICATION OF CERTAIN NONPROFIT HEALTH
1-8 CORPORATIONS
1-9 Sec. 1. DEFINITIONS. In this article:
1-10 (1) "Applicant" means an approved nonprofit health
1-11 corporation that has filed an application with the commissioner for
1-12 certification under this article.
1-13 (2) "Approved nonprofit health corporation" means a
1-14 nonprofit health corporation certified under Section 5.01(a),
1-15 Medical Practice Act (Article 4495b, Vernon's Texas Civil
1-16 Statutes).
1-17 (3) "Certificate holder" means an approved nonprofit
1-18 health corporation that holds a certificate of authority issued
1-19 under this article.
1-20 (4) "Health care plan" has the meaning assigned by
1-21 Section 2, Texas Health Maintenance Organization Act (Section
1-22 20A.02, Vernon's Texas Insurance Code).
1-23 (5) "Health maintenance organization" means a health
2-1 maintenance organization licensed under the Texas Health
2-2 Maintenance Organization Act (Chapter 20A, Vernon's Texas Insurance
2-3 Code).
2-4 Sec. 2. CERTIFICATE OF AUTHORITY REQUIRED; EXCEPTIONS. (a)
2-5 An approved nonprofit health corporation may arrange for or provide
2-6 a health care plan to enrollees on a prepaid basis only if the
2-7 corporation obtains and maintains a certificate of authority issued
2-8 by the department under this article.
2-9 (b) This article does not apply to:
2-10 (1) an approved nonprofit health corporation that
2-11 contracts to arrange for or provide health care services on a
2-12 fee-for-service basis;
2-13 (2) contracts entered into by a certificate holder to
2-14 arrange for or provide health care services on a fee-for-service
2-15 basis; or
2-16 (3) an activity exempt from regulation under Section
2-17 26(f), Texas Health Maintenance Organization Act (Chapter 20A,
2-18 Vernon's Texas Insurance Code).
2-19 (c) An approved nonprofit health corporation may arrange for
2-20 or provide health care services on a risk-sharing or capitated risk
2-21 arrangement on behalf of a health maintenance organization. An
2-22 approved nonprofit health corporation acting under this subsection
2-23 is not required to obtain a certificate of authority under this
2-24 article or under the Texas Health Maintenance Organization Act
2-25 (Chapter 20A, Vernon's Texas Insurance Code).
3-1 (d) This article shall not be construed to alter the
3-2 exceptions set out in Section 26(f), Texas Health Maintenance
3-3 Organization Act (Chapter 20A, Vernon's Texas Insurance Code).
3-4 Sec. 3. QUALIFICATIONS FOR CERTIFICATE OF AUTHORITY. The
3-5 commissioner may issue a certificate of authority only to an
3-6 approved nonprofit health corporation that:
3-7 (1) meets each requirement for the issuance of a
3-8 certificate of authority as a health maintenance organization
3-9 imposed by the Texas Health Maintenance Organization Act (Chapter
3-10 20A, Vernon's Texas Insurance Code) as if the approved nonprofit
3-11 health corporation were a health maintenance organization; and
3-12 (2) is accredited under Section 4 of this article.
3-13 Sec. 4. ACCREDITATION REQUIRED. (a) An applicant must
3-14 establish and a certificate holder must maintain accreditation by:
3-15 (1) the National Committee on Quality Assurance;
3-16 (2) the Joint Commission on Accreditation of
3-17 Healthcare Organization's accreditation for health care networks;
3-18 or
3-19 (3) an accrediting organization recognized by rule of
3-20 the commissioner.
3-21 (b) The commissioner shall grant a provisional certificate
3-22 of authority to an applicant if:
3-23 (1) the applicant has applied for accreditation;
3-24 (2) the applicant is diligently pursuing
3-25 accreditation;
4-1 (3) the accrediting organization has not denied the
4-2 accreditation; and
4-3 (4) all other requirements of this article are
4-4 satisfied.
4-5 Sec. 5. UNFAIR COMPETITION. (a) A certificate holder may
4-6 not engage in unfair and disruptive provider hiring or contracting
4-7 practices, the purpose of which is to limit competition from
4-8 traditional community providers.
4-9 (b) The Texas State Board of Medical Examiners shall adopt
4-10 rules to implement this section.
4-11 Sec. 6. POWERS AND DUTIES OF CERTIFICATE HOLDER. A
4-12 certificate holder has all the powers granted to and duties imposed
4-13 on a health maintenance organization under the Texas Health
4-14 Maintenance Organization Act (Chapter 20A, Vernon's Texas Insurance
4-15 Code) and the insurance laws of this state, and is subject to
4-16 regulation and regulatory enforcement under those laws in the same
4-17 manner as a health maintenance organization.
4-18 Sec. 7. RULES. Except as provided by Section 5(b) of this
4-19 article, the commissioner shall adopt rules to implement this
4-20 article.
4-21 SECTION 2. (a) Not later than September 16, 1995, the
4-22 commissioner of insurance shall establish an advisory committee
4-23 composed of:
4-24 (1) five members representing nonprofit health
4-25 corporations certified under Section 5.01(a), Medical Practice Act
5-1 (Article 4495b, Vernon's Texas Civil Statutes); and
5-2 (2) four members representing the public, two of whom
5-3 are employers.
5-4 (b) Not later than October 16, 1995, the advisory committee
5-5 shall recommend to the commissioner of insurance rules necessary to
5-6 implement Article 21.52F, Insurance Code, as added by this Act.
5-7 (c) Not later than January 1, 1996, the commissioner of
5-8 insurance shall publish proposed rules necessary to implement
5-9 Article 21.52F, Insurance Code, as added by this Act. In
5-10 developing the rules, the commissioner of insurance shall consider
5-11 the recommendations of the advisory committee.
5-12 SECTION 3. The Texas Department of Insurance may not issue a
5-13 certificate of authority to an approved nonprofit health
5-14 corporation under Article 21.52F, Insurance Code, as added by this
5-15 Act, before April 1, 1996.
5-16 SECTION 4. This Act takes effect September 1, 1995.
5-17 SECTION 5. The importance of this legislation and the
5-18 crowded condition of the calendars in both houses create an
5-19 emergency and an imperative public necessity that the
5-20 constitutional rule requiring bills to be read on three several
5-21 days in each house be suspended, and this rule is hereby suspended.