Bill not drafted by TLC or Senate E&E.
Line and page numbers may not match official copy.
By Smithee H.B. No. 1101
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the regulation of preferred provider benefit plans.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. Chapter 3, Insurance Code, is amended by adding
1-5 Article 3.70-3C to read as follows:
1-6 Art. 3.70-3C. PREFERRED PROVIDER BENEFIT PLANS
1-7 Sec. 1. DEFINITIONS. In this article:
1-8 (1) "Emergency care" means health care services
1-9 provided in a hospital emergency facility to evaluate and treat
1-10 medical conditions of a recent onset and severity, including but
1-11 not limited to severe pain that would lead a prudent layperson,
1-12 possessing an average knowledge of medicine and health, to believe
1-13 that the person's condition, sickness, or injury is of such a
1-14 nature that failure to get immediate medical care could result in:
1-15 (A) placing the patient's health in serious
1-16 jeopardy;
1-17 (B) serious impairment to bodily functions;
1-18 (C) serious dysfunction of any bodily organ or
1-19 part;
1-20 (D) serious disfigurement; or
1-21 (E) in the case of a pregnant woman, serious
1-22 jeopardy to the health of the fetus.
1-23 (2) "Health insurance policy" means a group or
1-24 individual insurance policy, certificate, or contract providing
2-1 benefits for medical or surgical expenses incurred as a result of
2-2 an accident or sickness.
2-3 (3) "Health care provider" or "provider" means any
2-4 practitioner other than a physician; an institutional provider; or
2-5 any other person or organization that furnishes health care
2-6 services and that is licensed or otherwise authorized to practice
2-7 in this state.
2-8 (4) "Hospital" means a licensed public or private
2-9 institution as defined in Chapter 241, Health and Safety Code, or
2-10 in Subtitle C, Title 7, Health and Safety Code.
2-11 (5) "Institutional provider" means a hospital, nursing
2-12 home, or any other medical or health-related service facility
2-13 caring for the sick or injured or providing care for other coverage
2-14 which may be provided in a health insurance policy.
2-15 (6) "Insurer" means any life, health, and accident;
2-16 health and accident; or health insurance company or company
2-17 operating pursuant to Chapter 3, 10, 20, 22, or 26 of this code
2-18 authorized to issue, deliver, or issue for delivery in this state
2-19 health insurance policies, certificates, or contracts.
2-20 (7) "Physician" means anyone licensed to practice
2-21 medicine in the State of Texas;
2-22 (8) "Practitioner" means a person who practices a
2-23 healing art and is a practitioner specified in Section 2(B),
2-24 Chapter 397, Acts of the 54th Legislature, 1955 (Article 3.70-2,
2-25 Vernon's Texas Insurance Code), or Article 21.52 of this code.
2-26 (9) "Preferred provider" means a physician,
2-27 practitioner, hospital, institutional provider, or health care
2-28 provider, or an organization of physicians or health care
2-29 providers, who contracts with an insurer to provide medical care or
2-30 health care to insureds covered by a health insurance policy,
3-1 certificate, or contract.
3-2 (10) "Quality assessment" means a mechanism which is
3-3 in place or put into place and utilized by an insurer for the
3-4 purposes of evaluating, monitoring, or improving the quality and
3-5 effectiveness of the medical care delivered by physicians or health
3-6 care providers to persons covered by a health insurance policy to
3-7 insure that the care delivered is consistent with that delivered by
3-8 an ordinary, reasonable, prudent physician or health care provider
3-9 under the same or similar circumstances.
3-10 (11) "Service area" means a geographic area or areas
3-11 set forth in the health insurance policy or preferred provider
3-12 contract in which a network of preferred providers is offered and
3-13 available.
3-14 Sec. 2. APPLICATION. This article applies to any preferred
3-15 provider benefit plan in which an insurer provides, through its
3-16 health insurance policy, for the payment of a level of coverage
3-17 which is different from the basic level of coverage provided by the
3-18 health insurance policy if the insured uses a preferred provider.
3-19 This article does not apply to provisions for dental care benefits
3-20 in any health insurance policy.
3-21 Sec. 3. CONTRACTING REQUIREMENTS. (a) A health insurance
3-22 policy that includes different benefits from the basic level of
3-23 coverage for the use of preferred providers shall not be considered
3-24 unjust under this code if it meets the requirements of this
3-25 section.
3-26 (b)(1) Physicians, practitioners, institutional providers,
3-27 and health care providers other than physicians, practitioners, and
3-28 institutional providers, if such other health care providers are
3-29 included by the insurer as preferred providers, licensed to treat
3-30 injuries or illnesses or to provide services covered by the health
4-1 insurance policy that comply with the terms and conditions
4-2 established by the insurer for designation as preferred providers
4-3 may apply for and shall be afforded a fair, reasonable, and
4-4 equivalent opportunity to become preferred providers. Such
4-5 designation shall not be unreasonably withheld.
4-6 (2) If a designation as a preferred provider is
4-7 withheld relating to a physician or practitioner, the insurer shall
4-8 provide a reasonable review mechanism that incorporates, in an
4-9 advisory role only, a review panel. Any recommendation of the
4-10 panel shall be provided on request to the affected physician or
4-11 practitioner. In the event of an insurer determination contrary to
4-12 any recommendation of the panel, a written explanation of the
4-13 insurer's determination shall also be provided on request to the
4-14 affected physician or practitioner.
4-15 (3) The review panel shall be composed of not less
4-16 than three individuals selected by the insurer from a list of the
4-17 physicians or practitioners contracting with the insurer and shall
4-18 include one member who is a physician or practitioner in the same
4-19 or similar specialty as the affected physician or practitioner, if
4-20 available. The list of physicians or practitioners is to be
4-21 provided to the insurer by the physicians or practitioners
4-22 contracting with the insurer in the applicable service area.
4-23 (4) The insurer must give a physician or health care
4-24 provider not designated on initial application written reasons for
4-25 denial of the designation; however, unless otherwise limited by
4-26 this code, this section does not prohibit an insurer from rejecting
4-27 an application from a physician or health care provider based on a
4-28 determination that the preferred provider benefit plan has
4-29 sufficient qualified providers.
4-30 (c) Any insurer, when sponsoring a preferred provider
5-1 benefit plan, shall immediately notify, by publication or in
5-2 writing to each physician and practitioner, all physicians and
5-3 practitioners in the geographic area covered by the plan of its
5-4 intent to offer such a plan and of the opportunity to participate.
5-5 Such notice and opportunity shall be provided on a yearly basis
5-6 thereafter to noncontracting physicians and practitioners in the
5-7 geographic area covered by the plan. The insurer shall on request
5-8 make available to any physician or health care provider information
5-9 concerning the application process and qualification requirements
5-10 for participation as a provider in the plan.
5-11 (d) Insurers which market a preferred provider benefit plan
5-12 must contract with physicians and health care providers to assure
5-13 that all medical and health care services and items contained in
5-14 the package of benefits for which coverage is provided, including
5-15 treatment of illnesses and injuries, will be provided under the
5-16 health insurance policy in a manner assuring both availability and
5-17 accessibility of adequate personnel, specialty care, and
5-18 facilities.
5-19 (e) Each insured patient shall have the right to treatment
5-20 and diagnostic techniques as prescribed by the physician or other
5-21 health care provider included in the preferred provider benefit
5-22 plan.
5-23 (f) Every contract by an insurer with a physician,
5-24 physicians group, or practitioner shall have a mechanism for the
5-25 resolution of complaints initiated by the insured, physicians,
5-26 physicians groups, or practitioners. Such mechanism shall provide
5-27 for reasonable due process which includes, in an advisory role
5-28 only, a review panel selected in the manner described in Subsection
5-29 (b)(3) of this section.
5-30 (g) Before terminating a contract with a preferred provider,
6-1 the insurer shall provide written reasons for the termination.
6-2 Prior to termination of a physician or practitioner, the insurer
6-3 shall, on request, provide a reasonable review mechanism that
6-4 incorporates, in an advisory role only, a review panel selected in
6-5 the manner described in Subsection (b)(3) of this section, except
6-6 in cases in which there is imminent harm to a patient's health or
6-7 an action by a state medical or other physician licensing board or
6-8 other government agency that effectively impairs a physician's or
6-9 practitioner's ability to practice medicine or in cases of fraud or
6-10 malfeasance. Any recommendation of the panel shall be provided to
6-11 the affected physician or practitioner. In the event of an insurer
6-12 determination contrary to any recommendation of the panel, a
6-13 written explanation of the insurer's determination shall also be
6-14 provided on request to the affected physician or practitioner. On
6-15 request, an expedited review process shall be made available to a
6-16 physician or practitioner who is being terminated. The expedited
6-17 review process shall comply with rules established by the
6-18 commissioner.
6-19 (h) An insurer that conducts, uses, or relies on economic
6-20 profiling to admit or terminate physicians or health care providers
6-21 shall make available to a physician or health care provider on
6-22 request the economic profile of that physician or health care
6-23 provider, including the written criteria by which the physician or
6-24 health care provider's performance is to be measured. An economic
6-25 profile must be adjusted to recognize the characteristics of a
6-26 physician's or health care provider's practice that may account for
6-27 variations from expected costs.
6-28 (i) No insurer shall engage in quality assessment except
6-29 through a panel of not less than three physicians selected by the
6-30 insurer from among a list of physicians contracting with the
7-1 insurer, which list is to be provided by the physicians contracting
7-2 with the insurer in the applicable service area.
7-3 (j) A preferred provider contract may not require any health
7-4 care provider, physician, or physicians group to execute hold
7-5 harmless clauses in order to shift the insurer's tort liability
7-6 resulting from acts or omissions of the insurer to the preferred
7-7 provider.
7-8 (k) A contract between an insurer and a preferred provider
7-9 may not, directly or indirectly, prohibit or attempt to prohibit:
7-10 (1) the preferred provider with whom the insurer has
7-11 contracted or proposes to contract from contracting with other
7-12 insurers, health maintenance organizations, or other health care
7-13 benefit plans; or
7-14 (2) the insurer with whom the preferred provider has
7-15 contracted or proposes to contract from contracting with other
7-16 preferred providers.
7-17 (l) A preferred provider contract must include a provision
7-18 by which the physician or health care provider agrees that if the
7-19 preferred provider is compensated on a discounted fee basis, the
7-20 insured may be billed only on the discounted fee and not the full
7-21 charge.
7-22 (m) An insurer may enter into an agreement with a preferred
7-23 provider organization for the purposes of offering a network of
7-24 preferred providers. The agreement may provide that the notice
7-25 and other insurer requirements of this section may be complied with
7-26 by either the insurer or the preferred provider organization on the
7-27 insurer's behalf. If an insurer enters into an agreement with a
7-28 preferred provider organization under this section, it is the
7-29 insurer's responsibility to meet the requirements of this section
7-30 or to assure that the requirements are met. All preferred provider
8-1 insurance benefit plans offered in this state shall comply with the
8-2 requirements of this section.
8-3 Sec. 4. CONTINUITY OF CARE. (a) The insurer shall
8-4 establish reasonable procedures for assuring a transition of
8-5 insureds to physicians or health care providers and for continuity
8-6 of treatment. Insurers shall provide, subject to Section 6(e) of
8-7 this article, reasonable advance notice to the insured of the
8-8 impending termination from the plan of a physician or health care
8-9 provider who is currently treating the insured and in the event of
8-10 termination of a preferred provider's participation in the plan
8-11 shall make available to the insured a current listing of preferred
8-12 providers.
8-13 (b) Each contract between an insurer and a physician or
8-14 health care provider must provide that the termination of a
8-15 preferred provider's participation in the plan, except for reason
8-16 of medical competence or professional behavior, shall not release
8-17 the physician or health care provider from the generally recognized
8-18 obligation to treat the insured and cooperate in arranging for
8-19 appropriate referrals or release the insurer from the obligation to
8-20 reimburse the physician or health care provider or, if applicable,
8-21 the insured at the same preferred provider rate if, at the time of
8-22 the preferred provider's termination, the insured has special
8-23 circumstances such as a disability, acute condition, or
8-24 life-threatening illness or is past the 24th week of pregnancy and
8-25 is receiving treatment in accordance with the dictates of medical
8-26 prudence.
8-27 (c) For purposes of Subsection (b) of this section, "special
8-28 circumstances" means a condition such that the treating physician
8-29 or health care provider reasonably believes that discontinuing care
8-30 by the treating physician or provider could cause harm to the
9-1 patient. Special circumstances shall be identified by the treating
9-2 physician or health care provider, who must request that the
9-3 insured be permitted to continue treatment under the physician's or
9-4 provider's care and agree not to seek payment from the patient of
9-5 any amounts for which the insured would not be responsible if the
9-6 physician or provider were still a preferred provider.
9-7 (d) Contracts between an insurer and physicians and health
9-8 care providers shall include procedures for resolving disputes
9-9 regarding the necessity for continued treatment by a physician or
9-10 provider.
9-11 (e) This section does not extend the obligation of the
9-12 insurer to reimburse, at the preferred provider level of coverage,
9-13 the terminated physician or health care provider or, if applicable,
9-14 the insured for ongoing treatment of an insured after the 90th day
9-15 from the effective date of the termination.
9-16 Sec. 5. EMERGENCY CARE PROVISIONS. If the insured cannot
9-17 reasonably reach a preferred provider, an insurer shall provide
9-18 reimbursement for the following emergency care services at the
9-19 preferred level of benefits until the insured can reasonably be
9-20 expected to transfer to a preferred provider:
9-21 (1) any medical screening examination or other
9-22 evaluation required by state or federal law to be provided in the
9-23 emergency facility of a hospital which is necessary to determine
9-24 whether a medical emergency condition exists;
9-25 (2) necessary emergency care services including the
9-26 treatment and stabilization of an emergency medical condition; and
9-27 (3) services originating in a hospital emergency
9-28 facility following treatment or stabilization of an emergency
9-29 medical condition.
9-30 Sec. 6. MANDATORY DISCLOSURE REQUIREMENTS. (a) All health
10-1 insurance policies, health benefit plan certificates, endorsements,
10-2 amendments, applications, or riders shall be written in plain
10-3 language, must be in a readable and understandable format, and must
10-4 comply with all applicable requirements relating to minimum
10-5 readability requirements.
10-6 (b) The insurer shall provide to a current or prospective
10-7 group contract holder or current or prospective insured on request
10-8 an accurate written description of the terms and conditions of the
10-9 policy to allow the current or prospective group contract holder or
10-10 current or prospective insured to make comparisons and informed
10-11 decisions before selecting among health care plans. The written
10-12 description must be in a readable and understandable format as
10-13 prescribed by the commissioner and must include a current list of
10-14 preferred providers. The insurer may provide its handbook to
10-15 satisfy this requirement provided the handbook's content is
10-16 substantively similar to and achieves the same level of disclosure
10-17 as the written description prescribed by the commissioner and the
10-18 current list of physicians and health care providers is provided.
10-19 (c) A current list of preferred providers shall be provided
10-20 to all insureds no less than annually.
10-21 (d) No insurer, or agent or representative of an insurer,
10-22 may cause or permit the use or distribution of prospective insured
10-23 information which is untrue or misleading.
10-24 (e) If a physician or practitioner is terminated for reasons
10-25 other than at the preferred provider's request, an insurer shall
10-26 not notify enrollees of the termination until the effective date of
10-27 the termination or at such time as a review panel makes a formal
10-28 recommendation regarding the termination, whichever is later. If a
10-29 physician or practitioner is terminated for reasons related to
10-30 imminent harm, an insurer may notify enrollees immediately.
11-1 Sec. 7. PROHIBITED PRACTICES. (a) No insurer shall engage
11-2 in any retaliatory action against an insured, including
11-3 cancellation of or refusal to renew a policy, because the insured,
11-4 or a person acting on behalf of the insured, has filed a complaint
11-5 against the insurer or against a preferred provider or has appealed
11-6 a decision of the insurer.
11-7 (b) No insurer shall engage in any retaliatory action
11-8 against a physician or health care provider, including termination
11-9 of or refusal to renew a contract, because the physician or
11-10 provider has, on behalf of an insured, reasonably filed a complaint
11-11 against the insurer or has appealed a decision of the insurer.
11-12 (c)(1) An insurer shall not, as a condition of a contract
11-13 with a physician or health care provider or in any other manner,
11-14 prohibit, attempt to prohibit, nor discourage a physician or
11-15 provider from:
11-16 (A) discussing with or communicating to a
11-17 current, prospective, or former patient, or a party designated by a
11-18 patient, information or opinions regarding that patient's health
11-19 care, including but not limited to the patient's medical condition,
11-20 treatment options, or other health care services; or
11-21 (B) discussing with or communicating in good
11-22 faith to a current, prospective, or former patient, or a party
11-23 designated by a patient, information or opinions regarding the
11-24 provisions, terms, requirements, or services of the health care
11-25 plan as they relate to the medical needs of the patient.
11-26 (2) An insurer shall not in any way penalize,
11-27 terminate, nor refuse to compensate for covered services a
11-28 physician or provider for discussing or communicating with a
11-29 current, prospective, or former patient, or a party designated by a
11-30 patient, pursuant to this section.
12-1 (d) An insurer shall not use any financial incentive or make
12-2 payment to a physician or health care provider which acts directly
12-3 or indirectly as an inducement to limit medically necessary
12-4 services.
12-5 Sec. 8. AVAILABILITY OF PREFERRED PROVIDERS. (a) Any
12-6 insurer offering a preferred provider benefit plan must ensure that
12-7 both preferred provider benefits and basic level benefits are
12-8 reasonably available to all insureds within a designated service
12-9 area.
12-10 (b) If services are not available through preferred
12-11 providers within the service area, nonpreferred providers shall be
12-12 reimbursed at the same percentage level of reimbursement as the
12-13 preferred providers would have been reimbursed had the insured been
12-14 treated by them.
12-15 Sec. 9. RULEMAKING AUTHORITY. The commissioner shall adopt
12-16 rules as necessary to implement the provisions of this article and
12-17 to ensure reasonable accessibility and availability of preferred
12-18 provider and basic level benefits to Texas citizens.
12-19 SECTION 2. The requirements of Article 3.70-3C, Insurance
12-20 Code, as added by Section 1 of this Act, apply to any insurance
12-21 policy or contract issued, delivered, or renewed on or after the
12-22 effective date of this Act.
12-23 SECTION 3. The importance of this legislation and the
12-24 crowded condition of the calendars in both houses create an
12-25 emergency and an imperative public necessity that the
12-26 constitutional rule requiring bills to be read on three several
12-27 days in each house be suspended, and this rule is hereby suspended,
12-28 and that this Act take effect and be in force from and after its
12-29 passage, and it is so enacted.