By: Sibley S.B. No. 1183
A BILL TO BE ENTITLED
AN ACT
1-1 relating to the delivery of health care by nonprofit health
1-2 corporations.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. Subchapter E, Chapter 21, Insurance Code, is
1-5 amended by adding Article 21.52E to read as follows:
1-6 Art. 21.52E. CERTIFICATION OF CERTAIN NONPROFIT HEALTH
1-7 CORPORATIONS
1-8 Sec. 1. DEFINITIONS. In this article:
1-9 (1) "Applicant" means an approved nonprofit health
1-10 corporation that has filed an application with the commissioner for
1-11 certification under this article.
1-12 (2) "Certificate holder" means an approved nonprofit
1-13 health corporation that holds a valid certificate issued under this
1-14 article.
1-15 (3) "Approved nonprofit health corporation" means a
1-16 nonprofit health corporation certified under Section 5.01(a),
1-17 Medical Practice Act (Article 4495b, Vernon's Texas Civil
1-18 Statutes).
1-19 (4) "Deliver" means to provide or arrange to provide.
1-20 (5) "Financial reserves" means actuarially certified
1-21 and separately maintained assets held in a trust account or as
1-22 provided by rules adopted by the commissioner.
1-23 (6) "Insurance carrier" means an insurance carrier
2-1 licensed by the commissioner to write insurance in Texas. The term
2-2 includes a health maintenance organization.
2-3 Sec. 2. CERTIFICATE REQUIRED; EXCEPTIONS. (a) An approved
2-4 nonprofit health corporation may deliver health care under a
2-5 contract if the corporation obtains and maintains a valid
2-6 certificate issued by the commissioner in accordance with this
2-7 article.
2-8 (b) Except as provided by Subsection (c), this article does
2-9 not apply to an approved nonprofit health corporation that only
2-10 contracts to deliver health care:
2-11 (1) on a fee-for-service basis; or
2-12 (2) on behalf of and with primary liability remaining
2-13 with:
2-14 (A) an insurance carrier;
2-15 (B) the federal government;
2-16 (C) the state government; or
2-17 (D) a political subdivision of the state.
2-18 (c) An approved nonprofit health corporation has the powers
2-19 granted to a certificate holder under Section 9 for the purpose of
2-20 implementing contracts covered by Subsection (b)(2).
2-21 Sec. 3. QUALIFICATIONS FOR A CERTIFICATE. The commissioner
2-22 may issue a certificate only to an approved nonprofit health
2-23 corporation that:
2-24 (1) files a sworn application with the department;
2-25 (2) pays a filing fee as provided by Section 10;
3-1 (3) is accredited as provided by Section 4;
3-2 (4) demonstrates minimum net worth as provided by
3-3 Section 5;
3-4 (5) demonstrates financial security as provided by
3-5 Section 6; and
3-6 (6) demonstrates compliance with the contracting
3-7 requirements provided by Section 7.
3-8 Sec. 4. ACCREDITATION REQUIRED. (a) An applicant must
3-9 establish and a certificate holder must maintain accreditation by:
3-10 (1) the National Committee on Quality Assurance;
3-11 (2) the Joint Commission on Accreditation of
3-12 Healthcare Organization's accreditation for health care networks;
3-13 or
3-14 (3) an accrediting organization recognized by rule of
3-15 the commissioner.
3-16 (b) The commissioner shall grant a provisional certificate
3-17 to an applicant if:
3-18 (1) the applicant has applied for accreditation;
3-19 (2) the applicant is diligently pursuing
3-20 accreditation;
3-21 (3) the accrediting organization has not denied the
3-22 accreditation; and
3-23 (4) all other requirements of this article are
3-24 satisfied.
3-25 Sec. 5. MINIMUM NET WORTH REQUIRED. (a) An applicant must
4-1 demonstrate and a certificate holder must maintain minimum net
4-2 worth as provided by rules of the commissioner.
4-3 (b) The minimum net worth may not be less than $1 million
4-4 unless the applicant or certificate holder demonstrates equivalent
4-5 financial strength satisfactory to the commissioner.
4-6 (c) The commissioner shall consider the net worth of members
4-7 of an approved nonprofit health corporation if the members
4-8 guarantee the payment of the corporation's liabilities.
4-9 Sec. 6. FINANCIAL SECURITY REQUIRED. (a) An applicant must
4-10 establish and a certificate holder must maintain minimum financial
4-11 security acceptable to the commissioner. The minimum financial
4-12 security must include:
4-13 (1) excess insurance or reinsurance as provided by
4-14 rules of the commissioner; and
4-15 (2) financial reserves.
4-16 (b) In establishing the minimum financial security, the
4-17 commissioner may not consider contracts between the certificate
4-18 holder and a party listed in Section 2(b)(2) or contracts based
4-19 only on a fee-for-service basis.
4-20 (c) An excess insurance policy must be written by an
4-21 insurance carrier licensed to write excess insurance in Texas.
4-22 (d) The commissioner may not require financial reserves
4-23 greater than necessary to provide 60 days of health care under all
4-24 of the certificate holder's active contracts to deliver health
4-25 care.
5-1 (e) All contracts in which the certificate holder agrees to
5-2 deliver health care must require payment to the certificate holder
5-3 on a monthly or more frequent schedule.
5-4 Sec. 7. LIMITATIONS ON CONTRACTS FOR HEALTH CARE. A
5-5 contract between a certificate holder and a health care provider
5-6 for the health care provider to provide health care shall:
5-7 (1) require 90 days or more written notice to all
5-8 parties to the contract before termination of the contract without
5-9 cause; and
5-10 (2) prohibit the health care provider from collecting
5-11 from a patient any fees not specifically established in the
5-12 contract.
5-13 Sec. 8. REPORTS REQUIRED. (a) Each certificate holder must
5-14 file:
5-15 (1) an annual report;
5-16 (2) quarterly reports; and
5-17 (3) monthly reports, if required by the commissioner
5-18 under Section 10.
5-19 (b) Reports must be filed with the department on the form
5-20 and in the manner prescribed by rules of the commissioner.
5-21 Sec. 9. POWERS OF A CERTIFICATE HOLDER. A certificate
5-22 holder may subcontract with any licensed health care provider to
5-23 deliver health care. Any contract to deliver health care to the
5-24 public and any subcontracts may provide for:
5-25 (1) fee-for-service;
6-1 (2) fixed compensation;
6-2 (3) capitated fees; or
6-3 (4) risk sharing.
6-4 Sec. 10. AUTHORITY AND DUTIES OF COMMISSIONER. (a) The
6-5 commissioner may:
6-6 (1) adopt rules necessary to implement this article;
6-7 (2) establish fees for application and renewal of a
6-8 certificate, provided that the fees may not exceed the actual cost
6-9 of processing the application or renewal and may not exceed $1,000;
6-10 (3) order a certificate holder to file a copy of any
6-11 contracts with the commissioner;
6-12 (4) order a certificate holder to file monthly
6-13 financial reports if the commissioner has reason to believe that
6-14 the certificate holder may not possess adequate financial security
6-15 to meet its obligations; or
6-16 (5) adopt rules preventing a contract to deliver
6-17 health care between a certificate holder and an employer from
6-18 excluding any eligible employee or dependent who would otherwise be
6-19 covered under the contract.
6-20 (b) The commissioner must approve or deny an application for
6-21 a certificate under this article no later than 60 days after
6-22 receipt of a completed application.
6-23 Sec. 11. ADMINISTRATIVE VIOLATION; PENALTY. An approved
6-24 nonprofit health corporation commits a violation if the corporation
6-25 or an authorized representative of the corporation knowingly and
7-1 intentionally:
7-2 (1) contracts to deliver health care in violation of
7-3 this article.
7-4 (2) files a false or misleading application for
7-5 certification or renewal;
7-6 (3) fails to respond timely to an order from the
7-7 commissioner for copies of a contract; or
7-8 (4) identifies the corporation to the public in a
7-9 manner that would reasonably imply to the public that the
7-10 corporation is an insurance carrier unless the corporation is
7-11 licensed in Texas as an insurance carrier.
7-12 Sec. 12. APPLICABILITY OF OTHER STATUTES. A contract
7-13 between a certificate holder and a health care provider is not
7-14 considered an unlawful business practice under Chapter 15, Business
7-15 & Commerce Code (Texas Free Enterprise and Antitrust Act of 1983).
7-16 SECTION 2. (a) No later than 15 days after the effective
7-17 date of this Act, the commissioner of insurance shall establish an
7-18 advisory committee composed of:
7-19 (1) five members representing nonprofit health
7-20 corporations certified under Subsection (a), Section 5.01, Medical
7-21 Practice Act (Article 4495b, Vernon's Texas Civil Statutes); and
7-22 (2) four members representing the public, two of whom
7-23 must be employers.
7-24 (b) No later than 45 days after the effective date of this
7-25 Act, the advisory committee shall recommend to the commissioner of
8-1 insurance rules necessary to implement this Act.
8-2 (c) No later than 120 days after the effective date of this
8-3 Act, the commissioner of insurance shall adopt rules necessary to
8-4 implement this Act. The commissioner of insurance shall take into
8-5 consideration the recommendations of the advisory committee.
8-6 SECTION 3. (a) Except as provided by this section, this Act
8-7 takes effect April 1, 1996.
8-8 (b) Section 1 of this Act takes effect September 1, 1995,
8-9 for the sole purpose of adoption of the rules and establishment of
8-10 the forms and fees necessary to implement this Act by the
8-11 commissioner of insurance.
8-12 (c) Section 2 of this Act and this section take effect
8-13 September 1, 1995.
8-14 SECTION 4. The importance of this legislation and the
8-15 crowded condition of the calendars in both houses create an
8-16 emergency and an imperative public necessity that the
8-17 constitutional rule requiring bills to be read on three several
8-18 days in each house be suspended, and this rule is hereby suspended.