By Berlanga                                           H.R. No. 1086
       74R14042 PFG-D
                                  R E S O L U T I O N
    1-1        WHEREAS, The members of a dental provider plan purchase
    1-2  dental care at a discounted or predetermined rate from the network
    1-3  of participating dentists in the plan; however, unlike traditional
    1-4  health insurance, these plans do not prepay participating dentists
    1-5  or offer indemnification or reimbursement for the cost of dental
    1-6  care; and
    1-7        WHEREAS, Dental provider organizations in Texas recognize an
    1-8  urgent need to clarify this distinction and to set firm standards
    1-9  for the industry that will enable consumers to make informed
   1-10  decisions about this vital component of the health care system;
   1-11  now, therefore, be it
   1-12        RESOLVED, That the House of Representatives of the 74th Texas
   1-13  Legislature hereby recommend that the Texas Department of Insurance
   1-14  in conjunction with dental provider organizations in the state
   1-15  develop a clear set of guidelines and minimum standards for dental
   1-16  provider organizations to adhere to in order to ensure the solvency
   1-17  and efficiency of the industry and to provide adequate information
   1-18  and protection to dental plan members; and, be it further
   1-19        RESOLVED, That these guidelines direct each dental provider
   1-20  organization in the state to make readily available a copy of the
   1-21  following information to confirm its financial soundness and the
   1-22  adequacy of its management and dental provider plan: a copy of its
   1-23  articles of incorporation, articles of association, partnership
   1-24  agreement, trust agreement, or other organizational document,
    2-1  assumed name documents, and all amendments; a copy of the
    2-2  organization's rules, bylaws, or similar documents regulating
    2-3  internal affairs; a list of names, addresses, and official
    2-4  positions of the persons in authority, including members of the
    2-5  board of directors, board of trustees, executive committee, or
    2-6  other governing body or committee, the principal officers if a
    2-7  corporation, and the partners or members if a partnership or
    2-8  association; a sample copy of the form of contract between a
    2-9  dentist, other provider, marketing representative, or person in
   2-10  authority; a current audited financial statement; and a description
   2-11  of the geographic or metropolitan area served; and, be it further
   2-12        RESOLVED, That the guidelines direct dental care providers to
   2-13  furnish each member with a complete and easily understood schedule
   2-14  of dental care service fees and a list of participating dentists in
   2-15  the member's geographical area; the schedule should inform the
   2-16  member that the dental provider plan does not constitute dental
   2-17  insurance and is not a health maintenance organization contract and
   2-18  that the dental provider organization does not reimburse the
   2-19  dentists or indemnify its members for the cost of dental care
   2-20  services; and, be it further
   2-21        RESOLVED, That the guidelines direct dental provider
   2-22  organizations to establish a reasonable system for the resolution
   2-23  of complaints by members and to furnish information about the
   2-24  complaint resolution system; and, be it further
   2-25        RESOLVED, That the guidelines direct dental provider
   2-26  organizations to maintain a minimum surplus of $100,000, valued
   2-27  following generally accepted accounting principles, and to post a
    3-1  surety bond with the state treasury in the amount of $100,000 to
    3-2  secure the debts and obligations of the organization to its
    3-3  members, making a copy of the bond readily available; and, be it
    3-4  further
    3-5        RESOLVED, That the guidelines strongly discourage a dental
    3-6  provider organization from deliberately allowing the use of false
    3-7  or misleading advertising, solicitations, or fee schedules and
    3-8  require that an organization state in its marketing or advertising
    3-9  materials that the dental provider plan does not constitute dental
   3-10  insurance or a health maintenance organization contract and that
   3-11  the dental provider organization does not reimburse the dentists or
   3-12  indemnify its members for the cost of dental care services; and, be
   3-13  it further
   3-14        RESOLVED, That the Texas Department of Insurance prepare a
   3-15  report on the compliance of dental provider organizations with
   3-16  these guidelines, that the report be submitted to the governor, the
   3-17  lieutenant governor, the speaker of the house, and the legislature
   3-18  not later than August 31, 1996, and that a follow-up report be
   3-19  submitted by January 15, 1997.