RS C.S.S.B. 387 75(R) BILL ANALYSIS INSURANCE C.S.S.B. 387 By: Harris (Smithee) 4-23-97 Committee Report (Substituted) BACKGROUND Currently, there is no statewide standardized system of rating health maintenance organizations (HMOs) and preferred provider organizations (PPOs). Increasingly, consumers and employers in Texas are desiring reliable and comparable information to select among several health care plans. This bill directs the Office of Public Insurance Counsel to establish and implement a standardized rating system and annual consumer report cards to compare HMOs and PPOs. PURPOSE As proposed, C.S.S.B. 387 creates a rating system and a consumer report card for the comparison of health care plans. RULEMAKING AUTHORITY This bill does not grant any additional rulemaking authority to a state officer, institution, or agency. SECTION BY SECTION ANALYSIS SECTION 1. Amends Chapter 1, Insurance Code, by adding Article 1.35A-1, as follows: ARTICLE. 1.35A-1. HEALTH CARE PLAN REPORT CARDS Sec. 1. DEFINITION. Defines "health maintenance organization." Sec. 2. RATING SYSTEM. Requires the office of public insurance counsel (office) to establish a rating system to compare and evaluate the quality of health maintenance organizations (HMOs) and preferred provider organizations (PPOs). Requires the office to rely solely on data collected by Texas Department of Insurance (department) the Texas Health Care Information Council (council). Authorizes the office to enter into contracts as necessary to implement this section. Existing enrollee satisfaction surveys may be used in the grading. In developing the ratings system, OPIC may use data from where they determine to be reliable, but may not request direct information from an HMO or PPO. They shall obtain information from th Texas Department of Insurance and the Health Care Information Council. Sec. 3. CONSUMER REPORT CARD. Requires the office to develop consumer report cards on HMOs and PPOs that offer health benefit plans in this state which include certain information. Requires the office to update the consumer report card annually. OPIC may use data from where they determine to be reliable, but may not request direct information from an HMO or PPO. They shall obtain information from the Texas Department of Insurance and the Health Care Information Council. Requires the consumer report card to be based solely on information from the department and the council and be composed of comprehensive and comparable information in a concise and easily understandable format to be readily available to the public. Authorizes the office to charge a reasonable fee for the distribution of the consumer report card. Requires the department to verify the proposed report card. Sec. 4. CONFIDENTIALITY OF DATA AND INFORMATION. Requires the information collected by the office to be used for the benefit of the public. Provides that the office is subject to the open records law. Requires the office to make determinations on requests for information in favor of access. Entitle the office to have access to certain information. Prohibits the office from releasing certain data, but may disclose a summary of the information that does not directly or indirectly identify HMOs and PPOs that is the subject of the information. Prohibits the office from releasing certain information. Provides that information collected by the office is subject to confidentiality provisions and criminal penalties. Provides that records on patients, physicians, and compilations, reports, or analyses produced from the data collected or received are not subject to legal compulsion or admissible in any civil, administrative or criminal proceeding. Authorizes the office to use zip code information to analyze data on a geographic basis. Sec. 5. AUTHORITY. Provides that the public insurance counsel has powers and duties to administer and implement this article. SECTION 2. Amends Article 1.35B(a), Insurance Code, to require the comptroller to collect assessments to defray the costs of administering the office's duties under Article 1.35A-1 of this code. SECTION 3. Amends Chapter 1, Insurance Code, by adding Article 1.35E, as follows: Art 1.35E. INFORMATION RELATING TO CERTAIN HEALTH BENEFIT PLANS; LIAISON TO OFFICE OF PUBLIC INSURANCE COUNSEL. Requires the department to provide information needed by the public insurance counsel and assist the office. Requires the commissioner to designate an employee of the department to serve as a liaison to the office. SECTION 4. Amends Section 108.011(b), Health and Safety Code, to prohibit the council from producing reports in regard to HMOs. SECTION 5. Amends Chapter 108, Health and Safety Code, by adding Section 108.016, as follows: Sec. 108.016. INFORMATION RELATING TO CERTAIN HEALTH BENEFIT PLANS; LIAISON TO OFFICE OF PUBLIC INSURANCE COUNSEL. Requires the council to provide data to the public insurance counsel and assist the office. Requires the council to designate an employee of the council to serve as a liaison to the office. SECTION 6. Requires the office to implement the rating system in Section 2(a), Article 1.35A-1, Insurance Code, as added by this Act, no later than September 1, 1998. SECTION 7. Requires the public insurance counsel to report in writing to the governor and legislature on certain matters, by January 15, 1999. SECTION 8. Makes application of this Act prospective to January 1, 1998. SECTION 9. Effective date: September 1, 1997. SECTION 10. Emergency clause. COMPARISON OF ORIGINAL TO SUBSTITUTE The substitute changes SECTION 1 of the bill, by adding to Article 1.35A-1, Sec.(2)(a), Insurance Code, a provision to allow OPIC to include "existing enrollee satisfaction surveys from reliable sources in the rating system." The substitute changes SECTION 1, by adding to Article 1.35A-1, Sec.(2)(b), a provision to allow OPIC to use information or data supplied by any person, agency, organization or governmental unit that OPIC deems reliable, however, the OPIC may not request information directly from HMOs and PPOs, but must obtain such information from the department or the council. The substitute also requires OPIC to identify the sources of information used in the report cards. The substitute changes SECTION 1, by adding to Article 1.35A-1, Sec.(3)(b)(4)(A)(ii), Medicare risk programs. The affect of this change would be to require the report card to also include an explanation of Medicare risk programs. Changes SECTION 1, by adding to Article 1.35A-1, Sec.(3)(d), a provision to allow OPIC to base the consumer report card on information or data supplied by any person, agency, organization or governmental unit that OPIC deems reliable, except that OPIC cannot request information directly from HMOs and PPOs, but must obtain such information from the department or the council.