By: Turner S.B. No. 1071
A BILL TO BE ENTITLED
AN ACT
1-1 relating to providing fairness and choice to patients and providers
1-2 under managed care health benefit plans; providing penalties.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. The Insurance Code is amended by adding Chapter
1-5 27 to read as follows:
1-6 CHAPTER 27. PATIENT PROTECTION ACT
1-7 SUBCHAPTER A. GENERAL PROVISIONS
1-8 Art. 27.01. SHORT TITLE. This chapter may be cited as the
1-9 Patient Protection Act.
1-10 Art. 27.02. DEFINITIONS. In this chapter:
1-11 (1) "Academic health center" means an entity that
1-12 operates or is affiliated with a hospital that receives payments
1-13 under Section 1886(d)(5)(B) or (h) federal Social Security Act, as
1-14 amended (42 U.S.C. Section 1395ww) relating to graduate medical
1-15 education.
1-16 (2) "Center of excellence" means a health facility,
1-17 including a children's hospital or other pediatric facility,
1-18 academic health center, teaching hospital, or other provider of
1-19 specialized care, that is so designated by the commissioner by
1-20 rule.
1-21 (3) "Commissioner" means the commissioner of
1-22 insurance.
1-23 (4) "Managed care contractor" means a person that:
2-1 (A) establishes, operates, or maintains a
2-2 network of participating providers;
2-3 (B) conducts or arranges for utilization review
2-4 activities; or
2-5 (C) contracts with an insurance company, a
2-6 hospital or medical service plan, or any other entity providing
2-7 coverage for health care services to operate a managed care plan.
2-8 (5) "Managed care entity" means a licensed insurance
2-9 company, hospital or medical service plan, health maintenance
2-10 organization, or managed care contractor that operates a managed
2-11 care plan.
2-12 (6) "Managed care plan" or "plan" means a plan
2-13 operated by a managed care entity that provides for the financing
2-14 and delivery of health care services to persons enrolled in such
2-15 plan through:
2-16 (A) arrangements with selected providers to
2-17 furnish health care services;
2-18 (B) explicit standards for the selection of
2-19 participating providers;
2-20 (C) organizational arrangements for ongoing
2-21 quality assurance, utilization review programs, and dispute
2-22 resolution; and
2-23 (D) financial incentives for persons enrolled in
2-24 the plan to use the participating providers and procedures provided
2-25 for by the plan.
3-1 (7) "Participating provider" means a physician,
3-2 dentist, hospital, pharmacy, laboratory, or other appropriately
3-3 state-licensed, registered, certified, or otherwise
3-4 state-recognized provider of health care services or supplies, that
3-5 has entered into an agreement with a managed care entity to provide
3-6 such services or supplies to a patient enrolled in a managed care
3-7 plan.
3-8 (8) "Qualified managed care plan" means a managed care
3-9 plan that the commissioner certifies, on application to the
3-10 program, as meeting the requirements of this chapter.
3-11 (9) "Utilization review law" means Article 21.58A of
3-12 this code.
3-13 Art. 27.03. PROTECTION OF CONSUMER CHOICE. Nothing in this
3-14 chapter shall be construed as prohibiting:
3-15 (1) an individual from purchasing any health care
3-16 services with that individual's own funds, whether such services
3-17 are covered within the individual's standard benefit package or
3-18 from another health care provider or plan; or
3-19 (2) employers from providing any additional coverages.
3-20 SUBCHAPTER B. CERTIFICATION OF MANAGED CARE PLANS
3-21 Art. 27.11. CERTIFICATION OF MANAGED CARE PLANS.
3-22 (a)(1) All managed care plans offering or providing services under
3-23 this code must be certified under the provisions of this 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 requirements 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 requirements of this chapter.
4-17 (6) The commissioner shall establish, collect, and
4-18 administer certification and renewal fees under this chapter in
4-19 amounts not greater than those 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 managed care plans that conduct business in this
4-23 state, including standards ensuring compliance with this
4-24 subsection.
4-25 (2) Prospective enrollees in a plan must be provided
5-1 information as to the terms and conditions of the plan so that they
5-2 can make informed decisions about accepting a certain system of
5-3 health care delivery. Easily understood, truthful, and objective
5-4 terms must be used when the plan is described orally to enrollees.
5-5 All written plan descriptions must be in a readable and
5-6 understandable format, consistent with standards developed for
5-7 supplemental insurance coverage under Title XVII, federal Social
5-8 Security Act, as amended (42 U.S.C. Section 1395 et seq.). The
5-9 format must be standardized so that customers can compare the
5-10 attributes of the plans. Specific items that must be included are:
5-11 (A) coverage provisions, benefits, including
5-12 prescription drug coverage, both generic and brand name, and any
5-13 exclusions by category of service, provider, or physician and, if
5-14 applicable, by specific service;
5-15 (B) all prior authorization or other review
5-16 requirements including preauthorization review, concurrent review,
5-17 postservice review, postpayment review, and any procedures that may
5-18 lead the patient to be denied coverage for or not be provided a
5-19 particular service;
5-20 (C) financial arrangements or contractual
5-21 provisions with hospitals, review companies, physicians, dentists,
5-22 or any other provider of health care services that would limit the
5-23 services offered, restrict referral or treatment options, require a
5-24 drug formulary or restrict the types of drugs available to
5-25 patients, or negatively affect the physician's or dentist's
6-1 fiduciary responsibility to his or her patients, including but not
6-2 limited to financial incentives not to provide medical, dental, or
6-3 other services;
6-4 (D) an explanation of how plan limitations
6-5 affect enrollees, including information on enrollee financial
6-6 responsibility for payment for coinsurance or other noncovered or
6-7 out-of-plan services;
6-8 (E) an explanation of the physician or, as
6-9 appropriate, dental network configuration that provides for patient
6-10 access to physicians or dentists including geographic distribution
6-11 of physicians and dentists by specialty and the
6-12 physician-to-enrollee and, as appropriate, dentist-to-enrollee
6-13 ratio by specialty;
6-14 (F) loss ratios; and
6-15 (G) enrollee satisfaction statistics, including
6-16 percentages of reenrollment and reasons for leaving the plan.
6-17 (3) The plan must demonstrate that covered enrollees
6-18 have reasonably prompt access through the entity's provider network
6-19 to all items and services contained in the package of benefits for
6-20 which coverage is provided, including access to emergency services
6-21 on a 24-hour basis where medically necessary, in a manner that
6-22 assures the continuity of the provision of such items and services.
6-23 Such access shall take into account the diverse needs of enrollees,
6-24 including special language requirements and proximity to the
6-25 workplaces or residences of enrollees.
7-1 (4) If contained within the package of benefits for
7-2 enrollees, the plan must demonstrate access to specialized
7-3 treatment expertise, including care for enrollees with chronic
7-4 diseases, through contracts with centers of excellence. Patients
7-5 in need of specialized treatment may request to receive specialized
7-6 care at an alternative center. As used in this subdivision, the
7-7 term "alternative center" means a center of excellence which is not
7-8 a member of the provider network of the entity providing the plan.
7-9 Such entities shall have an appeals process for patients who are
7-10 refused coverage at an alternative center. Each plan shall make
7-11 available to enrollees information in an easily understood and
7-12 useful form that allows enrollees to make valid comparisons among
7-13 centers of excellence offered by the plan.
7-14 (5) In its establishment of criteria for hospital
7-15 participation, a plan shall be required to accept hospital
7-16 licensure by the Texas Department of Health, certification by the
7-17 Medicare program under Title XVII, federal Social Security Act, as
7-18 amended (42 U.S.C. Section 1395 et seq.), or accreditation by the
7-19 Joint Commission on Accreditation of Healthcare Organizations.
7-20 (6) Plans must meet financial reserve requirements
7-21 that are established to assure proper payment for covered services
7-22 provided. An indemnity fund should be established to provide for
7-23 plan failures even when a plan has met the reserve requirements.
7-24 (7) 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 dental policy, including coverage of new technology and
8-3 procedures, the development and utilization of a prescription drug
8-4 formulary, utilization review criteria and procedures, quality and
8-5 certification criteria, and medical or dental management
8-6 procedures.
8-7 (8) All plans on request shall make available and
8-8 disclose the application process and qualification requirements for
8-9 certification as a provider in the plan. An applicant for initial
8-10 certification as a provider under the plan must be given the
8-11 reasons for denial as a provider if the application for initial
8-12 certification is denied or otherwise not accepted.
8-13 (9)(A) All plans that accept physicians and dentists
8-14 must certify those physicians and dentists.
8-15 (B) Each application shall be reviewed by a
8-16 certification committee with appropriate representation or input
8-17 from the applicant's medical or dental specialty.
8-18 (C) Certification shall be based on objective
8-19 standards of quality with input from physicians or dentists
8-20 certified in the plan, and such standards shall be available to
8-21 applicants and enrollees. When economic considerations are part of
8-22 the decision to select or deselect a provider from the plan,
8-23 objective criteria must be used and must be available to
8-24 applicants, participating physicians, dentists, and enrollees. Any
8-25 economic profile of physicians or dentists must be adjusted to
9-1 recognize case mix, diseases treated, physiologic and behavioral
9-2 severity of the diseases, including comorbidities, age and sex risk
9-3 adjustment of patients, and other features of a physician's or
9-4 dentist's practice that may account for higher than or lower than
9-5 expected costs to assure that fair comparisons are made. Profiles
9-6 must be made available to those so profiled. When graduate medical
9-7 education is a consideration in certification, equal recognition
9-8 will be given to training programs accredited by the Accrediting
9-9 Council on Graduate Medical Education and by the American
9-10 Osteopathic Association.
9-11 (D) Plans shall be prohibited from
9-12 discriminating against enrollees with medical conditions requiring
9-13 expensive tests and procedures for adequate diagnosis and treatment
9-14 by excluding practitioners who treat such enrollees.
9-15 (E) All decisions by the plan regarding
9-16 certification and contract renewal shall be made on the record, and
9-17 the applicant shall be provided with the reasons for certification
9-18 denial or contract nonrenewal.
9-19 (F) Plans shall not be allowed to include
9-20 clauses in physician, dentist, or other provider contracts that
9-21 allow for the plan to terminate the contract without cause.
9-22 (G) A physician, dentist, or other provider may
9-23 appeal an adverse ruling or decision of a plan. The commissioner
9-24 shall establish a due process appeals mechanism. The appeals
9-25 process will be presumed to be reasonable if it complies with the
10-1 appeals process set forth in the Health Care Quality Improvement
10-2 Act of 1986, as amended (42 U.S.C. Section 11101 et seq.).
10-3 (H) Prior to initiation of a proceeding leading
10-4 to termination of a contract for cause, the physician or dentist
10-5 shall be provided notice, an opportunity for discussion, and an
10-6 opportunity to enter into and complete a corrective action plan,
10-7 except in cases in which there is imminent harm to patient health
10-8 or an action by a state medical or dental board or other government
10-9 agency that effectively impairs the physician's or dentist's
10-10 ability to practice medicine or dentistry within the jurisdiction.
10-11 (10) Procedures shall be established to ensure that
10-12 all applicable federal and state laws designed to protect the
10-13 confidentiality of provider and individual medical and dental
10-14 records are followed.
10-15 (11) Plans must ensure that each enrollee is able to
10-16 choose a primary care physician and a dentist from among
10-17 participating physicians and dentists and change that selection as
10-18 appropriate.
10-19 (12) Plans must:
10-20 (A) cover medically necessary emergency care
10-21 services provided to covered individuals, including trauma services
10-22 such as those provided by designated trauma centers, without regard
10-23 to whether or not the provider furnishing such services has a
10-24 contractual or other arrangement with the entity to provide items
10-25 or services to covered individuals and, in the case of services
11-1 furnished for the treatment of an emergency medical condition as
11-2 defined in Section 1867(e)(1), federal Social Security Act, as
11-3 amended (42 U.S.C. Section 1395dd), without regard to prior
11-4 authorizations;
11-5 (B) provide that the prior authorization
11-6 requirement for medically necessary services or stabilizing
11-7 treatment in the emergency room shall be deemed to be approved
11-8 unless denied within one hour of a required request; and
11-9 (C) cover any screenings or evaluations that are
11-10 required to be performed in the emergency room pursuant to state or
11-11 federal law.
11-12 (13) A plan for which prior authorization is a
11-13 condition to coverage of a service must ensure that enrollees are
11-14 required to sign medical and dental information release consent
11-15 forms on enrollment for use when services requiring prior
11-16 authorization are recommended or proposed by the enrollee's
11-17 physician or dentist.
11-18 (14) When prior approval for a service or other
11-19 covered item is obtained, it shall be considered approval for all
11-20 purposes, and the service shall be considered to be covered unless
11-21 there was fraud or incorrect information provided at the time such
11-22 prior approval was obtained.
11-23 (15) When physicians or dentists are no longer
11-24 participating providers under the plan, continuity of patient care
11-25 is maintained by providing for the immediate reimbursement for
12-1 copies of medical or dental records that are created, kept, or
12-2 maintained by a physician or dentist and provided by the physician
12-3 or dentist to the patient or someone on the patient's behalf.
12-4 (16) Notwithstanding the provision of any other law,
12-5 all qualified managed care plans are subject to and shall meet the
12-6 requirements of the utilization review law.
12-7 (17) Initial standards shall be established under this
12-8 chapter within 12 months of the date of the enactment of this
12-9 chapter.
12-10 (18) The commissioner shall periodically review the
12-11 standards established under this chapter and may revise the
12-12 standards from time to time to assure that such standards continue
12-13 to reflect appropriate policies and practices for the
12-14 cost-effective and appropriate use of services in managed care
12-15 plans.
12-16 SUBCHAPTER C. CHOICE REQUIREMENTS AND PLANS
12-17 Art. 27.21. CHOICE REQUIREMENTS FOR POINT OF SERVICE PLANS.
12-18 (a) Each health benefit plan that restricts access to providers
12-19 shall offer to all eligible enrollees the opportunity to obtain
12-20 coverage for out-of-network services through a point-of-service
12-21 plan, as defined by Subsection (b) of this article, at the time of
12-22 enrollment and at least for a continuous one-month period annually
12-23 thereafter.
12-24 (b) For purposes of this chapter, an out-of-network or a
12-25 point-of-service plan provides additional coverage or access to
13-1 care provided by nonnetwork providers to an eligible enrollee of a
13-2 health plan that restricts access to items and services provided by
13-3 a health care provider who is not a member of the plan's provider
13-4 network, as defined in Subsection (c) of this article or that may
13-5 cover any other services the enrollee seeks, whether such services
13-6 are provided within or outside the enrollee's plan.
13-7 (c) "Provider network" means, with respect to a health plan
13-8 that restricts access, those providers who have entered into a
13-9 contract or agreement with the plan under which such providers are
13-10 obligated to provide items and services in the standard benefits
13-11 package to eligible individuals enrolled in the plan or who have an
13-12 agreement to provide services on a fee-for-service basis.
13-13 (d) A plan may charge an enrollee who opts to obtain
13-14 point-of-service coverage an alternative premium that takes into
13-15 account the actuarial value of such coverage.
13-16 (e) A point-of-service plan may require payment of
13-17 coinsurance for an out-of-network item or service, as follows:
13-18 (1) the applicable coinsurance percentage shall not be
13-19 greater than 20 percent of payment for items and services; and
13-20 (2) the applicable coinsurance percentage may be
13-21 applied differentially with respect to out-of-network items and
13-22 services, subject to the requirements of Article 27.11(b)(12) of
13-23 this code.
13-24 (f) All sponsors of point-of-service plans and physicians
13-25 and dentists participating in such plans shall be required to
14-1 disclose their fees, applicable payment schedules, coinsurance
14-2 requirements, or any other financial requirements that affect
14-3 patient payment levels.
14-4 SUBCHAPTER D. ENFORCEMENT; PENALTIES
14-5 Art. 27.31. VIOLATIONS. (a) If the commissioner believes
14-6 that a managed care entity or managed care contractor has violated
14-7 or is violating this chapter, the commissioner shall notify the
14-8 managed care entity or managed care contractor of the alleged
14-9 violation and may compel the production of any and all documents or
14-10 other information necessary to determine whether or not this
14-11 chapter has been or is being violated.
14-12 (b) The commissioner may bring an injunctive action to stop
14-13 a violation or potential violation of this chapter.
14-14 (c) If applicable and after notice and hearing, the
14-15 commissioner may, for a violation of this chapter:
14-16 (1) impose sanctions under Section 7, Article 1.10 of
14-17 this code; or
14-18 (2) issue a cease and desist order under Article 1.10A
14-19 of this code.
14-20 (d) The commissioner may recover reasonable costs, including
14-21 attorney's fees for an action brought under this subchapter.
14-22 SECTION 2. Sections 4 and 14, Article 21.58A, Insurance
14-23 Code, are amended to read as follows:
14-24 Sec. 4. Standards for utilization review. (a) As a
14-25 condition of certification or renewal thereof, a utilization review
15-1 agent shall be required to maintain compliance with the provisions
15-2 of this section.
15-3 (b) The utilization review plan, including reconsideration
15-4 and appeal requirements, shall be reviewed by a physician and
15-5 conducted in accordance with standards developed with input from
15-6 appropriate health care providers and approved by a physician.
15-7 (c)(1) Personnel employed by or under contract with the
15-8 utilization review agent to perform utilization review shall be
15-9 appropriately trained and qualified. Personnel who obtain
15-10 information directly from the physician or health care provider,
15-11 either orally or in writing, and who are not physicians shall be
15-12 nurses, physician assistants, registered records administrators, or
15-13 accredited records technicians, who are either licensed or
15-14 certified, or shall be individuals who have received formal
15-15 orientation and training in accordance with policies and procedures
15-16 established by the utilization review agent to assure compliance
15-17 with this section, and a description of such policies and
15-18 procedures shall be filed with the commissioner. This provision
15-19 shall not be interpreted to require such qualifications for
15-20 personnel who perform clerical or administrative tasks.
15-21 (2) On request, physicians or dentists will be
15-22 provided the names and credentials of all individuals conducting
15-23 utilization review, subject to reasonable safeguards and standards
15-24 determined by the commissioner.
15-25 (d) A utilization review agent shall not set or impose any
16-1 notice or other review procedures contrary to the requirements of
16-2 the health insurance policy or health benefit plan.
16-3 (e) Unless approved for an individual patient by the
16-4 provider of record or modified by contract, a utilization review
16-5 agent shall be prohibited from observing, participating in, or
16-6 otherwise being present during a patient's examination, treatment,
16-7 procedure, or therapy. In no event shall this section otherwise be
16-8 construed to limit or deny contact with a patient for purposes of
16-9 conducting utilization review unless otherwise specifically
16-10 prohibited by law.
16-11 (f) A utilization review agent may not permit or provide
16-12 compensation or any thing of value to its employees or agents,
16-13 condition employment of its employee or agent evaluations, or set
16-14 its employee or agent performance standards, based on the amount of
16-15 volume of adverse determinations, reductions or limitations on
16-16 lengths of stay, benefits, services, or charges or on the number or
16-17 frequency of telephone calls or other contacts with health care
16-18 providers or patients, which are inconsistent with the provisions
16-19 of this article.
16-20 (g) A health care provider may designate one or more
16-21 individuals as the initial contact or contacts for utilization
16-22 review agents seeking routine information or data. In no event
16-23 shall the designation of such an individual or individuals preclude
16-24 a utilization review agent or medical advisor from contacting a
16-25 health care provider or others in his or her employ where a review
17-1 might otherwise be unreasonably delayed or where the designated
17-2 individual is unable to provide the necessary information or data
17-3 requested by the utilization review agent.
17-4 (h) Utilization review conducted by a utilization review
17-5 agent shall be under the direction of a physician licensed to
17-6 practice medicine by the Texas State Board of Medical Examiners or,
17-7 as appropriate, a dentist licensed to practice dentistry by the
17-8 State Board of Dental Examiners <a state licensing agency in the
17-9 United States>.
17-10 (i) Each utilization review agent shall utilize written
17-11 medically acceptable screening criteria and review procedures which
17-12 are established and periodically evaluated and updated with
17-13 appropriate involvement from physicians, including practicing
17-14 physicians, and other health care providers. Such written
17-15 screening criteria and review procedures shall be available for
17-16 review and inspection by the commissioner and copying as necessary
17-17 for the commissioner to carry out his or her lawful duties under
17-18 this code, provided, however, that any information obtained or
17-19 acquired under the authority of this subsection and article is
17-20 confidential and privileged and not subject to the open records law
17-21 or subpoena except to the extent necessary for the board or
17-22 commissioner to enforce this article.
17-23 (j) A utilization review agent may not engage in unnecessary
17-24 or unreasonable repetitive contacts with the health care provider
17-25 or patient and shall base the frequency of contacts or reviews on
18-1 the severity or complexity of the patient's condition or on
18-2 necessary treatment and discharge planning activity.
18-3 (k) Subject to the notice requirements of Section 5 of this
18-4 article, in any instance where the utilization review agent is
18-5 questioning the medical necessity or appropriateness of health care
18-6 services, the health care provider who ordered the services shall
18-7 be afforded a reasonable opportunity to discuss the plan of
18-8 treatment for the patient and the clinical basis for the
18-9 utilization review agent's decision with a physician or, in the
18-10 case of a dental plan with a dentist, prior to issuance of an
18-11 adverse determination.
18-12 (l) A <Unless precluded or modified by contract, a>
18-13 utilization review agent shall reimburse health care providers for
18-14 the reasonable costs for providing medical information in writing,
18-15 including copying and transmitting any requested patient records or
18-16 other documents. A health care provider's charges for providing
18-17 medical information to a utilization review agent shall not exceed
18-18 the cost of copying set by rule of the Texas Workers' Compensation
18-19 Commission for records and may not include any costs that are
18-20 otherwise recouped as a part of the charge for health care.
18-21 (m) A utilization review agent shall establish and maintain
18-22 a complaint system that provides reasonable procedures for the
18-23 resolution of written complaints initiated by enrollees, patients,
18-24 or health care providers concerning the utilization review and
18-25 shall maintain records of such written complaints for two years
19-1 from the time the complaints are filed. The complaint procedure
19-2 shall include a written response to the complainant by the agent
19-3 within 60 days. The utilization review agent shall submit to the
19-4 commissioner a summary report of all complaints at such times and
19-5 in such forms as the board may require and shall permit the
19-6 commissioner to examine the complaints and all relevant documents
19-7 at any time.
19-8 (n) The utilization review agent may delegate utilization
19-9 review to qualified personnel in the hospital or health care
19-10 facility where the health care services were or are to be provided.
19-11 Sec. 14. Application. (a) This article shall not apply to
19-12 a person who provides information to enrollees about scope of
19-13 coverage or benefits provided under a health insurance policy or
19-14 health benefit plan and who does not determine whether particular
19-15 health care services provided or to be provided to an enrollee are
19-16 medically necessary or appropriate.
19-17 (b)(1) This article shall not apply to any contract with the
19-18 federal government for utilization review of patients eligible for
19-19 services under Title XVIII or XIX of the Social Security Act (42
19-20 U.S.C. Section 1395 et seq. or Section 1396 et seq.).
19-21 (2) This article shall not apply to <the Texas
19-22 Medicaid Program,> the chronically ill and disabled children's
19-23 services program created pursuant to Chapter 35, Health and Safety
19-24 Code, <any program administered under Title 2, Human Resources
19-25 Code,> any program of the Texas Department of Mental Health and
20-1 Mental Retardation, or any program of the Texas Department of
20-2 Criminal Justice.
20-3 (c) This article shall not apply to utilization review of
20-4 health care services provided to patients under the authority of
20-5 the Texas Workers' Compensation Act (Article 8308-1.01 et seq.,
20-6 Vernon's Texas Civil Statutes).
20-7 (d) <This article shall not apply to utilization review of
20-8 health care services provided under a policy or contract of
20-9 automobile insurance promulgated by the board under Subchapter A,
20-10 Chapter 5 of this code or issued pursuant to Article 1.14-2 of this
20-11 code.>
20-12 <(e)> This article shall not apply to the terms or benefits
20-13 of employee welfare benefit plans as defined in Section 31(I) of
20-14 the Employee Retirement Income Security Act of 1974 (29 U.S.C.
20-15 Section 1002).
20-16 (e) <(f)> Any regulations promulgated pursuant to this
20-17 article shall relate only to persons or entities subject to this
20-18 article.
20-19 (f) <(g) A health maintenance organization is not subject to
20-20 this article except as expressly provided in this subsection and
20-21 Subsection (i) of this section. If such health maintenance
20-22 organization performs utilization review as defined herein, it
20-23 shall, as a condition of licensure:>
20-24 <(1) comply with Sections 4(b), (c), (e), (f), (h),
20-25 (i), and (l) of this article, and the board shall promulgate rules
21-1 for appropriate verification and enforcement of compliance.
21-2 However, nothing in this article shall be construed to prohibit or
21-3 limit the distribution of a proportion of the savings from the
21-4 reduction or elimination of unnecessary medical services,
21-5 treatment, supplies, confinements, or days of confinement in a
21-6 health care facility through profit sharing, bonus, or withhold
21-7 arrangements to participating physicians or participating health
21-8 care providers for rendering health care services to enrollees;>
21-9 <(2) establish and maintain a system for:>
21-10 <(A) handling and responding to complaints by
21-11 enrollees, patients, or health care providers;>
21-12 <(B) providing health care providers with notice
21-13 of medical necessity or program requirements that have not been
21-14 met, including a reasonable opportunity to discuss the plan of
21-15 treatment and clinical basis for a utilization review determination
21-16 with a physician; and>
21-17 <(C) providing the enrollee, patient, and health
21-18 care provider an opportunity to appeal the determination; and>
21-19 <(3) submit to assessment of maintenance taxes under
21-20 Article 20A.33, Texas Health Maintenance Organization Act (Article
21-21 20A.33, Vernon's Texas Insurance Code), to cover the costs of
21-22 administering compliance of health maintenance organizations under
21-23 this section.>
21-24 <(h)> An insurer which delivers or issues for delivery a
21-25 health insurance policy in Texas and is subject to this code is not
22-1 subject to this article except as expressly provided in this
22-2 subsection and Subsection (g) <(i)> of this section. If an insurer
22-3 performs utilization review as defined herein it shall, as a
22-4 condition of licensure, comply with Sections 4 through 8 of this
22-5 article, and the board shall promulgate rules for appropriate
22-6 verification and enforcement of compliance. Such insurers shall be
22-7 subject to assessment of maintenance tax under Article 4.17 of this
22-8 code to cover the costs of administering compliance of insurers
22-9 under this section.
22-10 (g) <(i)> However, when an insurer subject to this code or a
22-11 health maintenance organization performs utilization review for a
22-12 person or entity subject to this article other than one for which
22-13 it is the payor, such insurer or health maintenance organization
22-14 shall be required to obtain a certificate under Section 3 of this
22-15 article and comply with all the provisions of this article.
22-16 SECTION 3. Chapter 27, Insurance Code, as added by Section 1
22-17 of this Act, takes effect June 1, 1996.
22-18 SECTION 4. The importance of this legislation and the
22-19 crowded condition of the calendars in both houses create an
22-20 emergency and an imperative public necessity that the
22-21 constitutional rule requiring bills to be read on three several
22-22 days in each house be suspended, and this rule is hereby suspended.