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.