By Gray H.B. No. 2034
75R7749 PB-D
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to medically necessary health care under certain insurance
1-3 laws.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Section 2, Texas Health Maintenance Organization
1-6 Act (Article 20A.02, Vernon's Texas Insurance Code), is amended to
1-7 read as follows:
1-8 Sec. 2. DEFINITIONS. In [For the purposes of] this Act:
1-9 (1) [(a)] "Basic health care services" means health
1-10 care services which an enrolled population might reasonably require
1-11 in order to be maintained in good health, including, as a minimum,
1-12 emergency care, inpatient hospital and medical services, and
1-13 outpatient medical services.
1-14 (2) [(b)] "Board" means the Texas Board of Health.
1-15 (3) [(c)] "Commissioner" means the commissioner of
1-16 insurance.
1-17 (4) "Emergency care" means health care services
1-18 provided after the recent onset of a medical condition manifesting
1-19 itself by acute symptoms of sufficient severity, including severe
1-20 pain, that would lead a prudent layperson to reasonably expect that
1-21 the absence of immediate medical attention could result in serious
1-22 impairment to bodily functions, serious dysfunction of any bodily
1-23 organ or part, or placing the patient's health, or if the patient
1-24 is a pregnant woman, the unborn child's health, in serious
2-1 jeopardy. The term includes:
2-2 (A) emergency services provided under Chapter
2-3 311, Health and Safety Code;
2-4 (B) emergency medical services and care provided
2-5 under Chapter 773, Health and Safety Code; and
2-6 (C) health care services provided to a pregnant
2-7 woman who is having contractions if:
2-8 (i) there is inadequate time to transfer
2-9 the woman to another medical facility safely before delivery; or
2-10 (ii) transfer to another medical facility
2-11 could pose a threat to the health or safety of the patient or the
2-12 unborn child.
2-13 (5) [(d)] "Enrollee" means an individual who is
2-14 enrolled in a health care plan, including covered dependents.
2-15 (6) [(e)] "Evidence of coverage" means any
2-16 certificate, agreement, or contract issued to an enrollee setting
2-17 out the coverage to which the enrollee is entitled.
2-18 (7) [(f)] "Group hospital service corporation" means a
2-19 nonprofit corporation organized and operating under Chapter 20 of
2-20 the Insurance Code.
2-21 (8) [(g)] "Health care" means prevention, maintenance,
2-22 rehabilitation, pharmaceutical, and chiropractic services provided
2-23 by qualified persons other than medical care.
2-24 (9) [(h)] "Health care plan" means any plan whereby
2-25 any person undertakes to provide, arrange for, pay for, or
2-26 reimburse any part of the cost of any health care services;
2-27 provided, however, a part of such plan consists of arranging for or
3-1 the provision of health care services, as distinguished from
3-2 indemnification against the cost of such service, on a prepaid
3-3 basis through insurance or otherwise.
3-4 (10) [(i)] "Health care services" means any services,
3-5 including the furnishing to any individual of pharmaceutical
3-6 services, medical, chiropractic, or dental care, or hospitalization
3-7 or incident to the furnishing of such services, care, or
3-8 hospitalization, as well as the furnishing to any person of any and
3-9 all other services for the purpose of diagnosing, treating,
3-10 preventing, alleviating, curing or healing human illness or injury
3-11 or a single health care service plan.
3-12 (11) [(j)] "Health maintenance organization" means any
3-13 person who arranges for or provides a health care plan or a single
3-14 health care service plan to enrollees on a prepaid basis.
3-15 (12) "Health maintenance organization delivery
3-16 network" means a health care delivery system in which a health
3-17 maintenance organization arranges for health care services directly
3-18 or indirectly through contracts and subcontracts with providers and
3-19 physicians.
3-20 (13) [(k)] "Medical care" means furnishing those
3-21 services defined as practicing medicine under Section 1.03(8),
3-22 Medical Practice Act (Article 4495b, Vernon's Texas Civil
3-23 Statutes).
3-24 (14) "Medically necessary health care service" means a
3-25 clinically based service, test, procedure, or therapy that is
3-26 required to diagnose, treat, prevent, alleviate, or cure:
3-27 (A) a mental or physical disease, disorder, or
4-1 condition;
4-2 (B) a physical deformity; or
4-3 (C) an injury.
4-4 (15) [(l)] "Person" means any natural or artificial
4-5 person, including, but not limited to, individuals, partnerships,
4-6 associations, organizations, trusts, hospital districts, limited
4-7 liability companies, limited liability partnerships, or
4-8 corporations.
4-9 (16) [(m)] "Physician" means:
4-10 (A) [(1)] an individual licensed to practice
4-11 medicine in this state;
4-12 (B) [(2)] a professional association organized
4-13 under the Texas Professional Association Act (Article 1528f,
4-14 Vernon's Texas Civil Statutes) or a nonprofit health corporation
4-15 certified under Section 5.01, Medical Practice Act (Article 4495b,
4-16 Vernon's Texas Civil Statutes); or
4-17 (C) [(3)] another person wholly owned by
4-18 physicians.
4-19 (17) [(n)] "Provider" means:
4-20 (A) [(1)] any person other than a physician,
4-21 including a licensed doctor of chiropractic, registered nurse,
4-22 pharmacist, optometrist, pharmacy, hospital, or other institution
4-23 or organization or person that is licensed or otherwise authorized
4-24 to provide a health care service in this state;
4-25 (B) [(2)] a person who is wholly owned or
4-26 controlled by a provider or by a group of providers who are
4-27 licensed to provide the same health care service; or
5-1 (C) [(3)] a person who is wholly owned or
5-2 controlled by one or more hospitals and physicians, including a
5-3 physician-hospital organization.
5-4 (18) "Single health care service" means a health care
5-5 service that an enrolled population may reasonably require in order
5-6 to be maintained in good health with respect to a particular health
5-7 care need for the purpose of diagnosing, treating, preventing,
5-8 alleviating, curing, or healing human illness or injury of a single
5-9 specified nature and that is to be provided by one or more persons
5-10 each of whom is licensed by the state to provide that specific
5-11 health care service.
5-12 (19) "Single health care service plan" means a plan
5-13 under which any person undertakes to provide, arrange for, pay for,
5-14 or reimburse any part of the cost of a single health care service,
5-15 provided that a part of the plan consists of arranging for or the
5-16 provision of the single health care service, as distinguished from
5-17 an indemnification against the cost of that service, on a prepaid
5-18 basis through insurance or otherwise and that no part of that plan
5-19 consists of arranging for the provision of more than one health
5-20 care need of a single specified nature.
5-21 (20) [(o)] "Sponsoring organization" means a person
5-22 who guarantees the uncovered expenses of the health maintenance
5-23 organization and who is financially capable, as determined by the
5-24 commissioner, of meeting the obligations resulting from those
5-25 guarantees.
5-26 (21) [(p)] "Uncovered expenses" means the estimated
5-27 administrative expenses and the estimated cost of health care
6-1 services that are not guaranteed, insured, or assumed by a person
6-2 other than the health maintenance organization. Health care
6-3 services may be considered covered if the physician or provider
6-4 agrees in writing that enrollees shall in no way be liable,
6-5 assessable, or in any way subject to payment for services except as
6-6 described in the evidence of coverage issued to the enrollee under
6-7 Section 9 of this Act. The amount due on loans in the next
6-8 calendar year will be considered uncovered expenses unless
6-9 specifically subordinated to uncovered medical and health care
6-10 expenses or unless guaranteed by the sponsoring organization.
6-11 (22) [(q)] "Uncovered liabilities" means obligations
6-12 resulting from unpaid uncovered expenses, the outstanding
6-13 indebtedness of loans that are not specifically subordinated to
6-14 uncovered medical and health care expenses or guaranteed by the
6-15 sponsoring organization, and all other monetary obligations that
6-16 are not similarly subordinated or guaranteed.
6-17 [(r) "Single health care service" means a health care
6-18 service that an enrolled population may reasonably require in order
6-19 to be maintained in good health with respect to a particular health
6-20 care need for the purpose of preventing, alleviating, curing, or
6-21 healing human illness or injury of a single specified nature and
6-22 that is to be provided by one or more persons each of whom is
6-23 licensed by the state to provide that specific health care service.]
6-24 [(s) "Single health care service plan" means a plan under
6-25 which any person undertakes to provide, arrange for, pay for, or
6-26 reimburse any part of the cost of a single health care service,
6-27 provided, that a part of the plan consists of arranging for or the
7-1 provision of the single health care service, as distinguished from
7-2 an indemnification against the cost of that service, on a prepaid
7-3 basis through insurance or otherwise and that no part of that plan
7-4 consists of arranging for the provision of more than one health
7-5 care need of a single specified nature.]
7-6 [(t) "Emergency care" means bona fide emergency services
7-7 provided after the sudden onset of a medical condition manifesting
7-8 itself by acute symptoms of sufficient severity, including severe
7-9 pain, such that the absence of immediate medical attention could
7-10 reasonably be expected to result in:]
7-11 [(1) placing the patient's health in serious jeopardy;]
7-12 [(2) serious impairment to bodily functions; or]
7-13 [(3) serious dysfunction of any bodily organ or part.]
7-14 [(u) "Health maintenance organization delivery network"
7-15 means a health care delivery system in which a health maintenance
7-16 organization arranges for health care services directly or
7-17 indirectly through contracts and subcontracts with providers and
7-18 physicians.]
7-19 SECTION 2. The Texas Health Maintenance Organization Act
7-20 (Article 20A.01 et seq., Vernon's Texas Insurance Code) is amended
7-21 by adding Section 29A to read as follows:
7-22 Sec. 29A. DETERMINATION OF MEDICALLY NECESSARY SERVICES.
7-23 The determination as to whether a specific treatment is a medically
7-24 necessary health care service for purposes of this chapter may be
7-25 made only by a physician or other health care provider authorized
7-26 to provide health care services to an enrollee. That determination
7-27 may not be made based on economic determinations or coverage
8-1 issues. An economic determination that has the effect of limiting
8-2 or denying any health care service constitutes an exclusion or
8-3 limitation under the health care plan.
8-4 SECTION 3. Section 2, Article 21.58A, Insurance Code, is
8-5 amended to read as follows:
8-6 Sec. 2. DEFINITIONS. In this article:
8-7 (1) "Administrative procedure act" means Chapter 2001,
8-8 Government Code [the Administrative Procedure and Texas Register
8-9 Act (Article 6252-13a, Vernon's Texas Civil Statutes)].
8-10 (2) "Administrator" means a person holding a
8-11 certificate of authority under Article 21.07-6 of this code.
8-12 (3) "Adverse determination" means a determination by a
8-13 utilization review agent that the health care services furnished or
8-14 proposed to be furnished to a patient are not medically necessary
8-15 or not appropriate in the allocation of health care resources.
8-16 (4) "Board" means the department or the commissioner,
8-17 as provided by Subsection (c), Article 1.01A, of this code [State
8-18 Board of Insurance].
8-19 (5) "Certificate" means a certificate of registration
8-20 granted by the board to a utilization review agent.
8-21 (6) "Commissioner" means the commissioner of
8-22 insurance.
8-23 (7) "Emergency care" has the meaning assigned by
8-24 [means bona fide emergency services as defined in] Section 2(I),
8-25 Chapter 397, Acts of the 54th Legislature, 1955 (Article 3.70-2,
8-26 Vernon's Texas Insurance Code) and Section 2 [2(t)], Texas Health
8-27 Maintenance Organization Act (Article 20A.02, Vernon's Texas
9-1 Insurance Code).
9-2 (8) "Dental plan" means an insurance policy or health
9-3 benefit plan, including a policy written by a company subject to
9-4 Chapter 20 of this code, that provides coverage for expenses for
9-5 dental services.
9-6 (9) "Enrollee" means a person covered by a health
9-7 insurance policy or plan and includes a person who is covered as an
9-8 eligible dependent of another person.
9-9 (10) "Health benefit plan" means a plan of benefits
9-10 that defines the coverage provisions for health care for enrollees
9-11 offered or provided by any organization, public or private, other
9-12 than health insurance.
9-13 (11) "Health care provider" means any person,
9-14 corporation, facility, or institution licensed by a state to
9-15 provide or otherwise lawfully providing health care services that
9-16 is eligible for independent reimbursement for those services.
9-17 (12) "Health insurance policy" means an insurance
9-18 policy, including a policy written by a company subject to Chapter
9-19 20 of this code, that provides coverage for medical or surgical
9-20 expenses incurred as a result of accident or sickness.
9-21 (13) "Medically necessary health care service" means a
9-22 clinically based service, test, procedure, or therapy that is
9-23 required to diagnose, treat, prevent, alleviate, or cure:
9-24 (A) a mental or physical disease, disorder, or
9-25 condition;
9-26 (B) a physical deformity; or
9-27 (C) an injury.
10-1 (14) "Nurse" means a professional or registered nurse,
10-2 a licensed vocational nurse, or a licensed practical nurse.
10-3 (15) [(14)] "Open meetings law" means Chapter 551,
10-4 Government Code [271, Acts of the 60th Legislature, Regular
10-5 Session, 1967 (Article 6252-17, Vernon's Texas Civil Statutes)].
10-6 (16) [(15)] "Open records law" means Chapter 552,
10-7 Government Code [424, Acts of the 63rd Legislature, Regular
10-8 Session, 1973 (Article 6252-17a, Vernon's Texas Civil Statutes)].
10-9 (17) [(16)] "Patient" means the enrollee or an
10-10 eligible dependent of the enrollee under a health benefit plan or
10-11 health insurance plan.
10-12 (18) [(17)] "Payor" means:
10-13 (A) an insurer writing health insurance
10-14 policies;
10-15 (B) any preferred provider organization, health
10-16 maintenance organization, self-insurance plan; or
10-17 (C) any other person or entity which provides,
10-18 offers to provide, or administers hospital, outpatient, medical, or
10-19 other health benefits to persons treated by a health care provider
10-20 in this state pursuant to any policy, plan, or contract.
10-21 (19) [(18)] "Physician" means a licensed doctor of
10-22 medicine or a doctor of osteopathy.
10-23 (20) [(19)] "Provider of record" means the physician
10-24 or other health care provider that has primary responsibility for
10-25 the care, treatment, and services rendered to the enrollee and
10-26 includes any health care facility when treatment is rendered on an
10-27 inpatient or outpatient basis.
11-1 (21) [(20)] "Utilization review" means a system for
11-2 prospective or concurrent review of the medical necessity and
11-3 appropriateness of health care services being provided or proposed
11-4 to be provided to an individual within this state. Utilization
11-5 review shall not include elective requests for clarification of
11-6 coverage.
11-7 (22) [(21)] "Utilization review agent" means an entity
11-8 that conducts utilization review for:
11-9 (A) an employer with employees in this state who
11-10 are covered under a health benefit plan or health insurance policy;
11-11 (B) a payor; or
11-12 (C) an administrator.
11-13 (23) [(22)] "Utilization review plan" means the
11-14 screening criteria and utilization review procedures of a
11-15 utilization review agent.
11-16 (24) [(23)] "Working day" means a weekday, excluding a
11-17 legal holiday.
11-18 SECTION 4. Section 4, Article 21.58A, Insurance Code, is
11-19 amended by amending Subsection (k) and by adding Subsection (o) to
11-20 read as follows:
11-21 (k) Subject to the notice requirements of Section 5 of this
11-22 article, in any instance where the utilization review agent is
11-23 questioning whether the [medical necessity or appropriateness of]
11-24 health care services provided are medically necessary health care
11-25 services, the health care provider who ordered the services shall
11-26 be afforded a reasonable opportunity to discuss the plan of
11-27 treatment for the patient and the clinical basis for the
12-1 utilization review agent's decision with a physician or, in the
12-2 case of a dental plan with a dentist, prior to issuance of an
12-3 adverse determination.
12-4 (o) The determination as to whether a specific treatment is
12-5 a medically necessary health care service for purposes of this
12-6 article may be made only by a physician or other health care
12-7 provider. That determination may not be made based on economic
12-8 determinations or coverage issues. An economic determination that
12-9 has the effect of limiting or denying any health care service
12-10 constitutes an exclusion or limitation under the policy, plan, or
12-11 contract.
12-12 SECTION 5. Section 11, Article 21.58A, Insurance Code, is
12-13 amended to read as follows:
12-14 Sec. 11. CLAIMS REVIEWS OF MEDICALLY NECESSARY SERVICES
12-15 [MEDICAL NECESSITY]. (a) When a retrospective review of whether a
12-16 [the medical necessity and appropriateness of] health care service
12-17 provided is a medically necessary health care service is made under
12-18 a health insurance policy or plan:
12-19 (1) such retrospective review shall be based on
12-20 written screening criteria established and periodically updated
12-21 with appropriate involvement from physicians, including practicing
12-22 physicians, and other health care providers; and
12-23 (2) the payor's system for such retrospective review
12-24 of medical necessity and appropriateness shall be under the
12-25 direction of a physician.
12-26 (b) When an adverse determination is made under a health
12-27 insurance policy or plan based on a retrospective review of the
13-1 medical necessity and appropriateness of the allocation of health
13-2 care resources and services, the payor shall afford the health care
13-3 providers the opportunity to appeal the determination in the same
13-4 manner afforded the enrollee, with the enrollee's consent to act on
13-5 his or her behalf, but in no event shall health care providers be
13-6 precluded from appeal if the enrollee is not reasonably available
13-7 or competent to consent. Such appeal shall not be construed to
13-8 imply or confer on such health care providers any contract rights
13-9 with respect to the enrollee's health insurance policy or plan that
13-10 the health care provider does not otherwise have.
13-11 SECTION 6. This Act takes effect September 1, 1997, and
13-12 applies only to a determination of a health maintenance
13-13 organization or a utilization review determination that is made on
13-14 or after that date.
13-15 SECTION 7. The importance of this legislation and the
13-16 crowded condition of the calendars in both houses create an
13-17 emergency and an imperative public necessity that the
13-18 constitutional rule requiring bills to be read on three several
13-19 days in each house be suspended, and this rule is hereby suspended.