By Wentworth S.R. No. 1267 74R14041 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 members of the Senate of the 74th 1-13 Legislature of the State of Texas hereby recommend that the Texas 1-14 Department of Insurance in conjunction with dental provider 1-15 organizations in the state develop a clear set of guidelines and 1-16 minimum standards for dental provider organizations to adhere to in 1-17 order to ensure the solvency and efficiency of the industry and to 1-18 provide adequate information and protection to dental plan members; 1-19 and, be it further 1-20 RESOLVED, That these guidelines direct each dental provider 1-21 organization in the state to make readily available a copy of the 1-22 following information to confirm its financial soundness and the 1-23 adequacy of its management and dental provider plan: a copy of its 1-24 articles of incorporation, articles of association, partnership 2-1 agreement, trust agreement, or other organizational document, 2-2 assumed name documents, and all amendments; a copy of the 2-3 organization's rules, bylaws, or similar documents regulating 2-4 internal affairs; a list of names, addresses, and official 2-5 positions of the persons in authority, including members of the 2-6 board of directors, board of trustees, executive committee, or 2-7 other governing body or committee, the principal officers if a 2-8 corporation, and the partners or members if a partnership or 2-9 association; a sample copy of the form of contract between a 2-10 dentist, other provider, marketing representative, or person in 2-11 authority; a current audited financial statement; and a description 2-12 of the geographic or metropolitan area served; and, be it further 2-13 RESOLVED, That the guidelines direct dental care providers to 2-14 furnish each member with a complete and easily understood schedule 2-15 of dental care service fees and a list of participating dentists in 2-16 the member's geographical area; the schedule should inform the 2-17 member that the dental provider plan does not constitute dental 2-18 insurance and is not a health maintenance organization contract and 2-19 that the dental provider organization does not reimburse the 2-20 dentists or indemnify its members for the cost of dental care 2-21 services; and, be it further 2-22 RESOLVED, That the guidelines direct dental provider 2-23 organizations to establish a reasonable system for the resolution 2-24 of complaints by members and to furnish information about the 2-25 complaint resolution system; and, be it further 2-26 RESOLVED, That the guidelines direct dental provider 2-27 organizations to maintain a minimum surplus of $100,000, valued 3-1 following generally accepted accounting principles, and to post a 3-2 surety bond with the state treasury in the amount of $100,000 to 3-3 secure the debts and obligations of the organization to its 3-4 members, making a copy of the bond readily available; and, be it 3-5 further 3-6 RESOLVED, That the guidelines strongly discourage a dental 3-7 provider organization from deliberately allowing the use of false 3-8 or misleading advertising, solicitations, or fee schedules and 3-9 require that an organization state in its marketing or advertising 3-10 materials that the dental provider plan does not constitute dental 3-11 insurance or a health maintenance organization contract and that 3-12 the dental provider organization does not reimburse the dentists or 3-13 indemnify its members for the cost of dental care services; and, be 3-14 it further 3-15 RESOLVED, That the Texas Department of Insurance prepare a 3-16 report on the compliance of dental provider organizations with 3-17 these guidelines, that the report be submitted to the governor, the 3-18 lieutenant governor, the speaker of the house, and the legislature 3-19 not later than August 31, 1996, and that a follow-up report be 3-20 submitted by January 15, 1997.