1-1 By: Berlanga (Senate Sponsor - Sibley) H.B. No. 3111
1-2 (In the Senate - Received from the House May 11, 1995;
1-3 May 12, 1995, read first time and referred to Committee on Economic
1-4 Development; May 23, 1995, reported adversely, with favorable
1-5 Committee Substitute by the following vote: Yeas 6, Nays 1;
1-6 May 23, 1995, sent to printer.)
1-7 COMMITTEE SUBSTITUTE FOR H.B. No. 3111 By: Sibley
1-8 A BILL TO BE ENTITLED
1-9 AN ACT
1-10 relating to the delivery of health care by certain nonprofit health
1-11 corporations.
1-12 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-13 SECTION 1. Subchapter E, Chapter 21, Insurance Code, is
1-14 amended by adding Article 21.52F to read as follows:
1-15 Art. 21.52F. CERTIFICATION OF CERTAIN NONPROFIT HEALTH
1-16 CORPORATIONS
1-17 Sec. 1. DEFINITIONS. In this article:
1-18 (1) "Applicant" means an approved nonprofit health
1-19 corporation that has filed an application with the commissioner for
1-20 certification under this article.
1-21 (2) "Approved nonprofit health corporation" means a
1-22 nonprofit health corporation certified under Section 5.01(a),
1-23 Medical Practice Act (Article 4495b, Vernon's Texas Civil
1-24 Statutes).
1-25 (3) "Certificate holder" means an approved nonprofit
1-26 health corporation that holds a certificate of authority issued
1-27 under this article.
1-28 (4) "Health care plan" has the meaning assigned by
1-29 Section 2, Texas Health Maintenance Organization Act (Section
1-30 20A.02, Vernon's Texas Insurance Code).
1-31 (5) "Health maintenance organization" means a health
1-32 maintenance organization licensed under the Texas Health
1-33 Maintenance Organization Act (Chapter 20A, Vernon's Texas Insurance
1-34 Code).
1-35 Sec. 2. CERTIFICATE OF AUTHORITY REQUIRED; EXCEPTIONS. (a)
1-36 An approved nonprofit health corporation may arrange for or provide
1-37 a health care plan to enrollees on a prepaid basis only if the
1-38 corporation obtains and maintains a certificate of authority issued
1-39 by the department under this article.
1-40 (b) This article does not apply to:
1-41 (1) an approved nonprofit health corporation that
1-42 contracts to arrange for or provide health care services on a
1-43 fee-for-service basis;
1-44 (2) contracts entered into by a certificate holder to
1-45 arrange for or provide health care services on a fee-for-service
1-46 basis; or
1-47 (3) an activity exempt from regulation under Section
1-48 26(f), Texas Health Maintenance Organization Act (Chapter 20A,
1-49 Vernon's Texas Insurance Code).
1-50 (c) An approved nonprofit health corporation may arrange for
1-51 or provide health care services on a risk-sharing or capitated risk
1-52 arrangement on behalf of a health maintenance organization. An
1-53 approved nonprofit health corporation acting under this subsection
1-54 is not required to obtain a certificate of authority under this
1-55 article or under the Texas Health Maintenance Organization Act
1-56 (Chapter 20A, Vernon's Texas Insurance Code).
1-57 Sec. 3. QUALIFICATIONS FOR CERTIFICATE OF AUTHORITY. The
1-58 commissioner may issue a certificate of authority only to an
1-59 approved nonprofit health corporation that:
1-60 (1) meets each requirement for the issuance of a
1-61 certificate of authority as a health maintenance organization
1-62 imposed by the Texas Health Maintenance Organization Act (Chapter
1-63 20A, Vernon's Texas Insurance Code) as if the approved nonprofit
1-64 health corporation were a health maintenance organization; and
1-65 (2) is accredited under Section 4 of this article.
1-66 Sec. 4. ACCREDITATION REQUIRED. (a) An applicant must
1-67 establish and a certificate holder must maintain accreditation by:
1-68 (1) the National Committee on Quality Assurance;
2-1 (2) the Joint Commission on Accreditation of
2-2 Healthcare Organization's accreditation for health care networks;
2-3 or
2-4 (3) an accrediting organization recognized by rule of
2-5 the commissioner.
2-6 (b) The commissioner shall grant a provisional certificate
2-7 of authority to an applicant if:
2-8 (1) the applicant has applied for accreditation;
2-9 (2) the applicant is diligently pursuing
2-10 accreditation;
2-11 (3) the accrediting organization has not denied the
2-12 accreditation; and
2-13 (4) all other requirements of this article are
2-14 satisfied.
2-15 Sec. 5. UNFAIR COMPETITION. (a) A certificate holder may
2-16 not engage in unfair and disruptive provider hiring or contracting
2-17 practices, the purpose of which is to limit competition from
2-18 traditional community providers.
2-19 (b) The Texas State Board of Medical Examiners shall adopt
2-20 rules to implement this section.
2-21 Sec. 6. POWERS AND DUTIES OF CERTIFICATE HOLDER. A
2-22 certificate holder has all the powers granted to and duties imposed
2-23 on a health maintenance organization under the Texas Health
2-24 Maintenance Organization Act (Chapter 20A, Vernon's Texas Insurance
2-25 Code) and the insurance laws of this state, and is subject to
2-26 regulation and regulatory enforcement under those laws in the same
2-27 manner as a health maintenance organization.
2-28 Sec. 7. RULES. Except as provided by Section 5(b) of this
2-29 article, the commissioner shall adopt rules to implement this
2-30 article.
2-31 SECTION 2. (a) Not later than September 16, 1995, the
2-32 commissioner of insurance shall establish an advisory committee
2-33 composed of:
2-34 (1) five members representing nonprofit health
2-35 corporations certified under Section 5.01(a), Medical Practice Act
2-36 (Article 4495b, Vernon's Texas Civil Statutes); and
2-37 (2) four members representing the public, two of whom
2-38 are employers.
2-39 (b) Not later than October 16, 1995, the advisory committee
2-40 shall recommend to the commissioner of insurance rules necessary to
2-41 implement Article 21.52F, Insurance Code, as added by this Act.
2-42 (c) Not later than January 1, 1996, the commissioner of
2-43 insurance shall publish proposed rules necessary to implement
2-44 Article 21.52F, Insurance Code, as added by this Act. In
2-45 developing the rules, the commissioner of insurance shall consider
2-46 the recommendations of the advisory committee.
2-47 SECTION 3. The Texas Department of Insurance may not issue a
2-48 certificate of authority to an approved nonprofit health
2-49 corporation under Article 21.52F, Insurance Code, as added by this
2-50 Act, before April 1, 1996.
2-51 SECTION 4. This Act takes effect September 1, 1995.
2-52 SECTION 5. The importance of this legislation and the
2-53 crowded condition of the calendars in both houses create an
2-54 emergency and an imperative public necessity that the
2-55 constitutional rule requiring bills to be read on three several
2-56 days in each house be suspended, and this rule is hereby suspended.
2-57 * * * * *