75R10248 PB-F By Delisi H.B. No. 2058 Substitute the following for H.B. No. 2058: By Eiland C.S.H.B. No. 2058 A BILL TO BE ENTITLED 1-1 AN ACT 1-2 relating to the certification, operation, powers, and duties of 1-3 certain integrated health plans. 1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-5 SECTION 1. The Insurance Code is amended by adding Chapter 1-6 20B to read as follows: 1-7 CHAPTER 20B. INTEGRATED HEALTH PLANS 1-8 SUBCHAPTER A. GENERAL PROVISIONS 1-9 Art. 20B.001. DEFINITIONS. In this chapter: 1-10 (1) "Basic health services" has the meaning assigned 1-11 by Section 2, Health Maintenance Organization Act of 1973, as 1-12 amended (42 U.S.C. Section 300e-1). 1-13 (2) "Group medical practice" means a group that: 1-14 (A) is composed of physicians and other 1-15 providers who are salaried employees or affiliates of the group 1-16 medical practice; 1-17 (B) has a physician as its chief executive 1-18 officer; 1-19 (C) voluntarily supports medical education and 1-20 research through a formal affiliation with the medical school 1-21 component of a public institution of higher education in this 1-22 state; and 1-23 (D) provides a majority of the professional 1-24 medical services rendered to a plan's members. 2-1 (3) "Health maintenance organization" means a health 2-2 maintenance organization organized under the Texas Health 2-3 Maintenance Organization Act (Chapter 20A, Vernon's Texas Insurance 2-4 Code). 2-5 (4) "Integrated health plan" means a nonprofit health 2-6 maintenance organization that holds a certificate of authority 2-7 under this chapter. 2-8 (5) "Life-threatening disease or condition" means a 2-9 disease or condition: 2-10 (A) in which the likelihood of death within one 2-11 year or less is high unless the course of the disease or condition 2-12 is interrupted; or 2-13 (B) that has a potentially fatal outcome within 2-14 one year or less and in which the goal of clinical intervention is 2-15 survival. 2-16 (6) "Member" means an eligible person who is enrolled 2-17 for coverage in a plan. 2-18 (7) "Plan" means: 2-19 (A) an integrated health plan; or 2-20 (B) a nonprofit health maintenance organization 2-21 that has submitted a certificate of authority application under 2-22 Article 20B.011 of this code. 2-23 (8) "Provider" means: 2-24 (A) a physician; or 2-25 (B) another licensed health care practitioner 2-26 who provides health care services under the scope of the 2-27 practitioner's license. 3-1 (9) "Subscriber" means an individual who is properly 3-2 enrolled for coverage under a plan because the individual is: 3-3 (A) an eligible employee of an eligible 3-4 employer; or 3-5 (B) another person whose employment or other 3-6 status, other than dependent status, is the basis for eligibility 3-7 for coverage under the plan. 3-8 Art. 20B.002. RULES. The commissioner shall adopt rules as 3-9 necessary to implement this chapter. 3-10 Art. 20B.003. EFFECT OF CERTIFICATION. A health maintenance 3-11 organization that is certified as an integrated health plan is 3-12 subject to regulation only as provided by this chapter. 3-13 (Articles 20B.004-20B.010 reserved for expansion 3-14 SUBCHAPTER B. CERTIFICATION REQUIREMENTS 3-15 Art. 20B.011. CERTIFICATION BY COMMISSIONER. On submission 3-16 of an application to the department, the commissioner shall issue a 3-17 certificate of authority as an integrated health plan to an 3-18 eligible nonprofit health maintenance organization that: 3-19 (1) meets the requirements described under Subchapters 3-20 C, D, E, F, and G of this chapter; and 3-21 (2) is accredited by: 3-22 (A) the National Committee on Quality Assurance; 3-23 or 3-24 (B) a similar nationally recognized review 3-25 organization acceptable to the commissioner. 3-26 Art. 20B.012. ELIGIBILITY. The commissioner may not issue a 3-27 certificate of authority under this chapter to a single service or 4-1 limited service health maintenance organization. 4-2 Art. 20B.013. REVOCATION OF CERTIFICATE. (a) After notice 4-3 to an integrated health plan and an opportunity for a hearing, the 4-4 commissioner may revoke that plan's certificate issued under this 4-5 chapter for a material violation of this chapter. 4-6 (b) The commissioner shall notify the integrated health plan 4-7 in writing not later than the 30th day before the effective date of 4-8 the proposed revocation. The notice must specify in detail the 4-9 reasons for the proposed revocation. 4-10 (c) The integrated health plan has 30 days after the date on 4-11 which the notice is sent to: 4-12 (1) correct the problems listed in the notice; or 4-13 (2) show to the satisfaction of the commissioner that 4-14 the information in the notice is incorrect. 4-15 (d) An integrated health plan that receives a notice under 4-16 this article may dispute the assertions in the notice and request a 4-17 hearing under Chapter 2001, Government Code, to resolve the 4-18 dispute. 4-19 Art. 20B.014. COMPLIANCE WITH STANDARDS OR RATIOS. 4-20 Notwithstanding any other provision of this chapter, the 4-21 commissioner may not issue a certificate of authority to, and may 4-22 revoke the certificate of authority of, an integrated health plan 4-23 that fails to meet or maintain complaint standards or ratios, 4-24 quality of care standards or ratios, or financial stability or 4-25 viability standards or ratios considered appropriate by the 4-26 commissioner. 4-27 (Articles 20B.015-20B.020 reserved for expansion 5-1 SUBCHAPTER C. ADMINISTRATION AND ORGANIZATION OF PLAN 5-2 Art. 20B.021. NONPROFIT ENTITY. Each plan must be organized 5-3 as a nonprofit entity. 5-4 Art. 20B.022. BOARD OF DIRECTORS. Each plan must have a 5-5 board of directors that includes: 5-6 (1) members; and 5-7 (2) physicians, or a combination of physicians and 5-8 other types of providers, who provide health care services to 5-9 members. 5-10 Art. 20B.023. GROUP MEDICAL PRACTICE. (a) Each plan shall 5-11 provide the majority of its professional medical services through a 5-12 single group medical practice. 5-13 (b) The plan shall: 5-14 (1) appoint as chief executive officer of the plan a 5-15 physician who is a member of the group medical practice; or 5-16 (2) adopt procedures that ensure that medical 5-17 management policies are a cooperative endeavor between the group 5-18 medical practice and the plan. 5-19 (c) The procedures adopted under Subsection (b) of this 5-20 article must establish methods by which the health care interests 5-21 of plan members and the medical interests of the physicians of the 5-22 group medical practice are represented at the policy and 5-23 decision-making levels of the plan. 5-24 (d) Physicians from the group medical practice, other 5-25 qualified providers, or other licensed medical personnel under the 5-26 direct supervision of physicians from the group medical practice, 5-27 shall make each determination regarding: 6-1 (1) medical utilization management; 6-2 (2) medical quality assurance; 6-3 (3) medical issues relating to coverage; 6-4 (4) medical necessity or appropriateness of treatment; 6-5 and 6-6 (5) medical issues relating to pre-authorization and 6-7 post-authorization of treatment. 6-8 Art. 20B.024. RIGHTS OF PROVIDERS. (a) A plan may not 6-9 prohibit a physician or other provider from discussing treatment 6-10 options or restrict the provider's discussion of treatment options 6-11 based on whether the plan covers the treatment or the cost of the 6-12 treatment. This subsection does not require the plan to provide 6-13 services or to cover treatments not otherwise included in its 6-14 applicable benefit plan. 6-15 (b) The plan or group medical practice, as appropriate, 6-16 shall: 6-17 (1) make available and disclose to each provider who 6-18 applies for participation in the plan its written application 6-19 procedures and qualification requirements for contracting with the 6-20 plan; and 6-21 (2) provide a written notice of the reasons an initial 6-22 application by a provider may be denied, which may include 6-23 rejection of an initial application on the basis that the plan has 6-24 a sufficient number of qualified providers of that type. 6-25 Art. 20B.025. CREDENTIALING PROGRAM; REQUIREMENTS. (a) A 6-26 plan shall use physicians and other providers whose credentials are 6-27 verified through a program that meets the requirements of this 7-1 article. 7-2 (b) The plan shall implement its credentialing program 7-3 through written policies and procedures establishing the 7-4 credentialing process, including methods for original 7-5 credentialing, recredentialing, recertification, and reappointment 7-6 of physicians and providers who fall within the scope of services 7-7 provided by the plan. 7-8 (c) The credentialing program shall obtain and review 7-9 evidence of the following from primary sources: 7-10 (1) a license to practice from the appropriate 7-11 licensing authority; 7-12 (2) a valid Drug Enforcement Administration 7-13 registration under 21 U.S.C. Section 823 or a controlled 7-14 substances registration under Subchapter C, Chapter 481, Health and 7-15 Safety Code, as applicable; 7-16 (3) graduation from an accredited medical school and 7-17 completion of a residency, or board certification, as applicable; 7-18 (4) work history; 7-19 (5) adequate professional liability insurance in 7-20 accordance with the requirements adopted by the plan; 7-21 (6) history of professional liability claims; and 7-22 (7) sufficient information to enable the plan to 7-23 request information on the applicant from the National Practitioner 7-24 Data Bank and from the appropriate professional licensing agency 7-25 for this state. 7-26 (d) The credentialing program shall also establish methods 7-27 by which a periodic review is conducted to verify the credentials 8-1 of a provider and to evaluate: 8-2 (1) members' complaints and comments; 8-3 (2) the plan's quality reviews; 8-4 (3) utilization management; and 8-5 (4) the results of member satisfaction surveys. 8-6 Art. 20B.026. PROVIDER INCENTIVE ARRANGEMENTS. (a) A plan 8-7 may not provide incentives or rewards to its providers for denying 8-8 or limiting necessary care to members. 8-9 (b) A plan's payment arrangements for physicians and other 8-10 providers may not place an individual provider at such a 8-11 substantial personal financial risk that it induces the provider to 8-12 either inappropriately restrict medically necessary care or provide 8-13 care beyond that which is conservatively needed by the patient. 8-14 Physicians and other providers shall have the freedom to make 8-15 clinical treatment decisions without substantial personal financial 8-16 risk or reward. 8-17 Art. 20B.027. REVENUE TO BE SPENT ON SERVICES TO MEMBERS. 8-18 (a) Each plan shall spend, on average over a three-year period, at 8-19 least 85 percent of the revenue received from its members on the 8-20 provision of services to its members. 8-21 (b) The commissioner shall consider a plan to have met the 8-22 requirement of Subsection (a) of this article if compliance by the 8-23 plan with the requirement may be inferred by periodic reports made 8-24 by the plan to the National Association of Insurance Commissioners. 8-25 Art. 20B.028. MARKETING REQUIREMENTS. (a) In offering its 8-26 benefit plan to employers, each plan shall provide adequate written 8-27 descriptions of its rules, procedures, benefits, fees and other 9-1 charges, and services. 9-2 (b) The plan shall publicize through appropriate methods its 9-3 enrollment periods and shall specify whether an enrollment period 9-4 is limited or of continuous duration. 9-5 (c) On request by a member, the plan shall provide to the 9-6 member a written copy of the most current statement of member rules 9-7 and rights. The information must include: 9-8 (1) a description of the benefits provided; 9-9 (2) how and where to obtain services; 9-10 (3) restrictions on coverage, if any; 9-11 (4) a description of the plan's grievance resolution 9-12 and appeals procedures; 9-13 (5) rights of a member regarding termination of 9-14 enrollment; 9-15 (6) findings from patient satisfaction surveys and 9-16 quality reviews conducted by external organizations; and 9-17 (7) a statement of the obligation of the plan to 9-18 assume financial responsibility and provide reasonable 9-19 reimbursement for medically necessary emergency services and 9-20 urgently needed services. 9-21 (d) The plan may not discriminate in its marketing by: 9-22 (1) discouraging participation on the basis of age or 9-23 race; or 9-24 (2) attempting to enroll persons from a high-income 9-25 area if a comparable effort is not made to enroll persons from 9-26 lower-income areas. 9-27 (e) The plan may not market its benefit plan in a manner 10-1 that would mislead, confuse, or misrepresent. 10-2 (f) The plan may not offer gifts or payment as an inducement 10-3 to enroll in the plan, except for marketing materials, meals, 10-4 souvenirs, and other items of nominal value. 10-5 (Articles 20B.029-20B.040 reserved for expansion 10-6 SUBCHAPTER D. QUALITY IMPROVEMENT 10-7 Art. 20B.041. QUALITY IMPROVEMENT PROGRAM. (a) Each plan 10-8 shall adopt an ongoing quality improvement program designed to 10-9 monitor and evaluate the quality and appropriateness of care and 10-10 service provided to members and to pursue opportunities for 10-11 improvement. The scope and content of the program shall reflect 10-12 the delivery system of the plan and shall include both the quality 10-13 of clinical care and the quality of service. The program shall 10-14 have a written quality improvement statement that contains, at a 10-15 minimum: 10-16 (1) a methodology that stresses health outcomes; 10-17 (2) peer review by physicians and other providers; 10-18 (3) systematic data collection on performance and 10-19 patient results; and 10-20 (4) procedures for taking appropriate remedial action. 10-21 (b) The quality improvement program shall identify important 10-22 areas for improvement. The monitoring and evaluation of important 10-23 aspects of care and service by the program shall include 10-24 high-volume, high-risk services and the care of acute and chronic 10-25 conditions. Through the program, the plan shall: 10-26 (1) adopt practice guidelines or explicit criteria 10-27 that are based on reasonable scientific evidence and reviewed by 11-1 plan providers; 11-2 (2) evaluate the continuity and coordination of care 11-3 that members receive; and 11-4 (3) establish mechanisms to detect underuse as well as 11-5 overuse. 11-6 Art. 20B.042. ORGANIZATIONAL DESCRIPTION. Each plan shall 11-7 specify within the quality improvement program its organizational 11-8 arrangements and responsibilities for quality improvement 11-9 processes, which must be clearly defined and assigned to 11-10 appropriate individuals. The plan shall maintain a written 11-11 description of the program that outlines the program structure and 11-12 design. The plan shall review the program description annually and 11-13 update the description as necessary. 11-14 Art. 20B.043. PROGRAM IMPLEMENTATION. (a) A designated 11-15 senior executive of the plan shall be responsible for 11-16 implementation of the program. The plan's medical director shall 11-17 have substantial involvement in quality improvement activities. 11-18 (b) If the plan delegates any quality improvement activities 11-19 to independent contractors, the quality improvement program must 11-20 require oversight of the delegated activities by the plan. The 11-21 required oversight must include periodic reporting by the 11-22 contractor, accountability for the delegated activities, and 11-23 establishment of a process by which the delegation is evaluated. 11-24 Art 20B.044. QUALITY IMPROVEMENT COMMITTEE. (a) Each plan 11-25 shall appoint a committee to oversee and support quality 11-26 improvement activities. The contracting providers shall 11-27 participate actively in the quality improvement committee. 12-1 (b) The committee shall maintain records reflecting the 12-2 actions of the committee. The committee shall adopt an annual 12-3 quality improvement work plan or schedule of activities that 12-4 includes: 12-5 (1) the objectives, scope, and planned projects or 12-6 activities for the year; 12-7 (2) planned monitoring of previously identified 12-8 issues, including tracking of those issues over time; and 12-9 (3) planned evaluation of the quality improvement 12-10 program. 12-11 (c) The committee shall be accountable to the governing body 12-12 of the plan or a committee of plan senior managers. The committee 12-13 shall demonstrate evidence of a formally designated structure, 12-14 accountability at the highest levels of the organization, and 12-15 ongoing and continuous oversight of quality improvement. 12-16 Art. 20B.045. REPORTS; COORDINATION OF ACTIVITIES. (a) The 12-17 quality improvement program shall document and report to 12-18 appropriate individuals within the plan organization the findings, 12-19 conclusions, recommendations, actions taken, and results of the 12-20 actions taken as a result of quality improvement activity. The 12-21 reports shall be made through the quality improvement program in 12-22 accordance with the plan organizational structure. 12-23 (b) The program shall coordinate quality improvement 12-24 activities with other performance-monitoring activities. 12-25 Art. 20B.046. DATA ANALYSIS. (a) The quality improvement 12-26 program shall analyze measurements of quality and quality 12-27 improvement data to evaluate quality improvement. The program 13-1 shall use quality indicators that are objective, measurable, and 13-2 based on current knowledge and clinical experience to monitor and 13-3 evaluate each important aspect of care and service identified by 13-4 the program. 13-5 (b) The program shall analyze all data collected through the 13-6 monitoring and evaluation activities. 13-7 Art. 20B.047. EVALUATION. (a) Each quality improvement 13-8 program shall ensure that the plan takes action as necessary to 13-9 improve quality and shall assess the effectiveness of that action 13-10 through systematic evaluations. 13-11 (b) The results of evaluations conducted under this article 13-12 shall be used by the plan to improve clinical care and service. 13-13 Art. 20B.048. ANNUAL ASSESSMENT BY PLAN; REPORT. Each plan 13-14 shall annually assess the overall effectiveness of its quality 13-15 improvement program and shall issue an annual written report on 13-16 quality improvement, including: 13-17 (1) completed quality improvement activities; 13-18 (2) trends in clinical and service indicators and 13-19 other performance data; and 13-20 (3) demonstrated improvements in quality. 13-21 (Articles 20B.049-20B.060 reserved for expansion 13-22 SUBCHAPTER E. DELIVERY OF HEALTH CARE SERVICES TO MEMBERS 13-23 Art. 20B.061. SERVICE DELIVERY SYSTEM. (a) Each plan shall 13-24 provide or arrange for the provision of basic health services to 13-25 its members. 13-26 (b) The services provided by a plan shall be reasonably 13-27 accessible to its members with respect to geographic location, 14-1 hours of operation, and provision of after-hours services. This 14-2 subsection does not preclude the plan from providing or arranging 14-3 for the provision of member care within or outside the service area 14-4 of the plan for care that requires a higher level of skill or 14-5 specialty care than that which is available within the service 14-6 area. 14-7 (c) The plan shall cover emergency services at all times in 14-8 accordance with Article 20B.065 of this code. 14-9 (d) Each plan shall maintain appropriate systems as 14-10 necessary to monitor: 14-11 (1) member waiting time to get appointments with 14-12 participating providers; 14-13 (2) member telephone access to participating 14-14 providers; and 14-15 (3) the plan's arrangements for the provision of 14-16 emergency services. 14-17 Art. 20B.062. STANDARDS FOR DELIVERY OF CARE; MEMBER ACCESS. 14-18 (a) Each plan shall establish standards regarding the availability 14-19 of primary care providers to members and member access to services 14-20 provided through the plan, including access to: 14-21 (1) routine, urgent, and emergency care; 14-22 (2) a telephone appointment system; 14-23 (3) advice from providers; and 14-24 (4) other member telephone services. 14-25 (b) The plan's performance on member access to services 14-26 shall be assessed against the standards. 14-27 Art. 20B.063. HEALTH MANAGEMENT EFFORTS. (a) Each plan 15-1 shall take an active role in improving the health status of its 15-2 members and promoting effective health management by identifying 15-3 members with chronic illnesses and implementing appropriate 15-4 programmatic responses. 15-5 (b) The plan shall inform and educate each provider about 15-6 using the health management program for the members assigned to 15-7 that provider. 15-8 Art. 20B.064. MEDICAL RECORDS AND CONTINUITY OF CARE. 15-9 (a) A plan shall ensure continuity of care through: 15-10 (1) use of a health care professional who is primarily 15-11 responsible for coordinating the member's overall health care; and 15-12 (2) a system that maintains or ensures the maintenance 15-13 of necessary health and medical records that: 15-14 (A) accumulate pertinent information about each 15-15 member's health care; and 15-16 (B) are available to appropriate health care 15-17 professionals. 15-18 (b) A plan shall have policies and procedures governing the 15-19 maintenance of the health and medical records to ensure that those 15-20 records are maintained in a manner that: 15-21 (1) is current, detailed, and organized; and 15-22 (2) permits effective patient care and quality review. 15-23 (c) A plan shall ensure that: 15-24 (1) members' medical records are maintained so as to 15-25 ensure confidentiality, including written confidentiality policies 15-26 and procedures; and 15-27 (2) a member is afforded the opportunity to approve or 16-1 refuse the release of identifiable personal information except: 16-2 (A) to fulfill essential health plan functions 16-3 and obligations, including: 16-4 (i) quality improvement; 16-5 (ii) determining entitlement to health 16-6 care services; 16-7 (iii) administering payments; or 16-8 (iv) conducting approved, bona fide 16-9 medical education or research; or 16-10 (B) when the release is required by law. 16-11 Art. 20B.065. PAYMENT OF CERTAIN EMERGENCY SERVICES. 16-12 (a) The plan is financially responsible for, and shall provide 16-13 reasonable reimbursement for, necessary emergency services 16-14 required by a member, including services to treat and stabilize an 16-15 emergency medical condition that are obtained by a member from a 16-16 provider outside the plan, even if the services are provided 16-17 without prior authorization from the plan. 16-18 (b) The plan is financially responsible for the charges made 16-19 by a hospital emergency department for a medical screening 16-20 examination or other evaluation required by state or federal law 16-21 that is necessary to determine whether a medical emergency exists 16-22 for a member. 16-23 (c) After patient stabilization, the plan shall respond in a 16-24 timely manner appropriate to the circumstances of the case to 16-25 requests to provide additional services through the hospital 16-26 emergency department. 16-27 (d) On submission of written notice by a member of a valid 17-1 claim for medically necessary emergency care services, the plan 17-2 shall promptly reimburse the member for any amounts for which the 17-3 plan is obligated to pay. 17-4 Art. 20B.066. MEMBER RIGHTS AND RESPONSIBILITIES. (a) The 17-5 plan shall adopt written policies that recognize the rights of a 17-6 member to: 17-7 (1) voice grievances about the plan or the care 17-8 provided by the plan; 17-9 (2) be provided with information about the plan, its 17-10 services, the practitioners providing care, and members' rights and 17-11 responsibilities; 17-12 (3) participate in the decision-making regarding the 17-13 member's personal health care; and 17-14 (4) be treated with respect, recognizing the member's 17-15 dignity and need for privacy. 17-16 (b) The plan shall have written policies that address the 17-17 responsibility of a member to cooperate with providers providing 17-18 health care services. The written policy shall address the 17-19 member's responsibility to: 17-20 (1) provide, to the extent possible, information 17-21 needed by professional staff to care for the member; and 17-22 (2) follow instructions and guidelines given by those 17-23 providers. 17-24 (c) The plan shall provide a copy of its policies relating 17-25 to the rights and responsibilities of members on request to each 17-26 participating provider and directly to each subscriber. 17-27 Art. 20B.067. GRIEVANCE RESOLUTION. Each plan shall 18-1 establish, maintain, and inform each subscriber in writing of the 18-2 appeal and grievance procedures for each plan decision. The plan 18-3 shall have a formal system for resolving members' grievances that: 18-4 (1) establishes and monitors standards for timely 18-5 disposition of a grievance; 18-6 (2) documents the substance of a grievance and the 18-7 resulting actions taken; 18-8 (3) ensures a resolution of the grievance; 18-9 (4) establishes an appeals process: 18-10 (A) in which a member has the right to appear 18-11 before an appeals panel established by the plan and to request a 18-12 review of that panel's decision by different plan personnel; and 18-13 (B) that provides expedited procedures for 18-14 emergency situations; 18-15 (5) aggregates and analyzes information relating to 18-16 grievances and uses that information in its quality improvement 18-17 program; and 18-18 (6) ensures that a member who has filed a grievance or 18-19 an appeal is not the subject of retaliation or termination by the 18-20 plan solely because of that filing. 18-21 Art. 20B.068. DIRECT ACCESS. (a) The plan shall have a 18-22 written procedure to allow a member who has a chronic disabling or 18-23 life-threatening condition to apply to the plan's medical director 18-24 for direct access to specialty care appropriate to that member's 18-25 condition. The written procedure may include initial approval by 18-26 the member's primary care physician and the appropriate specialist. 18-27 (b) The medical director may set the conditions under which 19-1 the member may access the appropriate specialist directly. 19-2 (c) A member may appeal a denial of a request for direct 19-3 access through the appeals process required by this chapter. 19-4 (Articles 20B.069-20B.080 reserved for expansion 19-5 SUBCHAPTER F. PROTECTION AGAINST INSOLVENCY 19-6 Art. 20B.081. NO PRIVATE INTEREST. No individual or other 19-7 person may own an interest in a plan. 19-8 Art. 20B.082. NET WORTH; RETAINED EARNINGS. (a) Each 19-9 plan's total net worth shall represent retained earnings and other 19-10 capital sources. Retained earnings shall be used to: 19-11 (1) serve the plan's health care purposes; 19-12 (2) meet the plan's financial obligations, excluding 19-13 surplus notes arrangements; and 19-14 (3) provide benefits to the community at large or 19-15 support medical education or research. 19-16 (b) Each plan shall maintain a total net worth in an amount 19-17 determined by the commissioner to be adequate to provide services 19-18 to its members. 19-19 (c) The commissioner shall accept a plan's total net worth 19-20 as adequate if the plan's average net worth for the three years 19-21 preceding the date on which the plan applied to the department for 19-22 a certificate of authority to operate as an integrated health plan, 19-23 as reported in the annual statement filed by the plan with the 19-24 department under Article 20A.10, Texas Health Maintenance 19-25 Organization Act (Article 20A.10, Vernon's Texas Insurance Code), 19-26 has been at least $10 million. 19-27 Art. 20B.083. LIQUID ASSETS. Each plan shall maintain 20-1 sufficient cash or other liquid assets, or guarantee of liquid 20-2 assets, as necessary to meet the plan's financial obligations when 20-3 due. 20-4 Art. 20B.084. SOLVENCY PROTECTION PROGRAM. Each plan shall 20-5 adopt a solvency protection program that includes methods to 20-6 protect plan members from incurring liability for payment of fees 20-7 for health care services that are the legal obligation of the plan. 20-8 (Articles 20B.085-20B.100 reserved for expansion 20-9 SUBCHAPTER G. UTILIZATION MANAGEMENT 20-10 Art. 20B.101. UTILIZATION MANAGEMENT PROGRAM. (a) Each 20-11 plan shall adopt and maintain a written health care utilization 20-12 management program to ensure that the care provided to members is 20-13 appropriate, of high quality, and not based solely on economic 20-14 criteria. 20-15 (b) The program at a minimum must provide for the 20-16 accumulation and review of information relating to: 20-17 (1) new medical procedures and technologies; 20-18 (2) provider performance; 20-19 (3) health care services utilization; 20-20 (4) procedures for pre-authorization, if 20-21 pre-authorization is used; and 20-22 (5) concurrent review. 20-23 (c) The program must require that any pre-authorization 20-24 requirements and concurrent review are supervised by qualified 20-25 medical professionals and that any denial of care must be reviewed 20-26 by a licensed physician. 20-27 Art. 20B.102. PROCEDURES FOR DENIAL OF TREATMENT. (a) The 21-1 program must provide that: 21-2 (1) utilization management decisions are made in a 21-3 timely manner, depending on the urgency of the situation; 21-4 (2) the reasons for denial of treatment are clearly 21-5 documented and made available to the member or physician; and 21-6 (3) procedures for the appeal of a denial of treatment 21-7 are communicated to the affected member. 21-8 (b) The program must include a process for an appeal of an 21-9 adverse determination. The process must include the presentation 21-10 of information by and the opinion of the treating physician 21-11 regarding the determination. If the decision to deny coverage was 21-12 based on a determination of lack of medical necessity, the appeal 21-13 must be decided by a physician. 21-14 (c) Unless the determination involves a life-threatening or 21-15 emergency situation, an appeal of an adverse determination must be 21-16 resolved not later than the 30th day after the date of receipt of 21-17 all necessary medical information. If the determination involves a 21-18 life-threatening or emergency situation, the appeal must be decided 21-19 on an expedited basis as provided by Subsection (d) of this 21-20 article. 21-21 (d) The program must include an expedited process for an 21-22 appeal of denial of treatment for a member with a life-threatening 21-23 condition. A complaint of denial of treatment that is subject to 21-24 this subsection must be resolved not later than the seventh day 21-25 after receipt of the complaint. An appeal of a determination made 21-26 under this subsection must be resolved not later than the seventh 21-27 day after the date of receipt of the appeal request. 22-1 Art. 20B.103. HOSPITAL STAY. (a) The program shall ensure 22-2 that the determination of the appropriate length of stay in a 22-3 hospital, including hospitalization provided under maternity 22-4 benefits, is made by the attending physician and the patient, 22-5 taking into consideration any special needs of the patient and, in 22-6 the case of maternity benefits, any special needs of the infant. 22-7 (b) The determination of the appropriate length of stay in a 22-8 hospital may not be based on economic criteria. 22-9 (Articles 20B.104-20B.120 reserved for expansion 22-10 SUBCHAPTER H. OPERATION OF INTEGRATED HEALTH PLAN 22-11 Art. 20B.121. DETERMINATION OF MEDICAL NECESSITY. (a) An 22-12 integrated health plan shall have written policies and procedures 22-13 for making determinations as to whether a medical treatment is 22-14 medically necessary, experimental or investigational, or covered 22-15 under the terms of the health coverage provided by the plan. Those 22-16 policies and procedures must comply with this subchapter. 22-17 (b) The medical director of the integrated health plan, who 22-18 must be a physician licensed to practice medicine in this state and 22-19 employed by the applicable group medical practice, shall render or 22-20 approve a determination described by Subsection (a) of this 22-21 article. The medical director may delegate this responsibility to 22-22 one or more physicians who are licensed to practice medicine in 22-23 this state and are employed by or affiliated with the group medical 22-24 practice. 22-25 (c) The integrated health plan or group medical practice 22-26 shall subscribe or have access to an organized technology 22-27 assessment service that is independent from the plan and group 23-1 medical practice. 23-2 (d) The integrated health plan or group medical practice 23-3 shall have a committee composed of licensed physicians of the group 23-4 medical practice and, as necessary, other types of licensed medical 23-5 professionals that serve as an advisory body to the medical 23-6 director in making determinations of whether a medical treatment is 23-7 medically necessary or experimental or investigational. 23-8 (e) Before deciding that a medical treatment is not 23-9 medically necessary, is experimental or investigational, or is not 23-10 covered under the terms of the policy of health coverage, the 23-11 medical director, or the medical director's designee, shall perform 23-12 one or more of the following actions, as appropriate to the 23-13 circumstances and time constraints of the case: 23-14 (1) review the patient's medical record; 23-15 (2) review the patient's case with a physician of the 23-16 same or similar specialty as the physician recommending the 23-17 treatment in question; 23-18 (3) review relevant reports or findings of the 23-19 technology assessment service described under Subsection (c) of 23-20 this article; or 23-21 (4) consult with the advisory committee described 23-22 under Subsection (d) of this article. 23-23 (f) If the medical director or the medical director's 23-24 designee renders or approves a negative decision about a medical 23-25 treatment and the integrated health plan declines to provide 23-26 coverage for the treatment, the affected member may appeal the 23-27 decision through the grievance resolution procedure required under 24-1 this chapter. 24-2 Art. 20B.122. LIABILITY. (a) An integrated health plan 24-3 that complies with the policies and procedures required under 24-4 Article 20B.121 of this code is not liable for personal injury, 24-5 property damage, or death that arises as a result of the decision 24-6 by the plan to cover or not cover a treatment. If the member or 24-7 the member's provider fails to request approval from the plan for 24-8 the treatment until after the treatment is performed, the plan is 24-9 not liable for personal injury, property damage, or death that 24-10 arises as a result of the decision by the integrated health plan to 24-11 cover or not cover the treatment. 24-12 (b) An integrated health plan and the group medical practice 24-13 may indemnify the other with respect to a negligent act or 24-14 omission. The plan may not require any provider who is not 24-15 affiliated with the group medical practice to indemnify the plan 24-16 for its negligent act or omission. 24-17 Art. 20B.123. APPLICATION OF INSURANCE LAWS. (a) Except as 24-18 provided by this article, an integrated health plan is exempt from 24-19 the operation and application of all insurance laws of this state, 24-20 including this code. 24-21 (b) An integrated health plan is subject to the following 24-22 laws as those laws existed on January 15, 1997: 24-23 (1) the Texas Health Maintenance Organization Act 24-24 (Chapter 20A, Vernon's Texas Insurance Code); 24-25 (2) Chapter 26, Insurance Code; 24-26 (3) Articles 1.04, 1.10, 1.10A, 1.10B, 1.10E, 1.11, 24-27 1.14-1, 1.15A, 1.19-1, 1.24C, 1.24D, 1.28, 1.31, 1.31A, 1.33, 25-1 1.33B, 1.41, 3.51-5A, 3.51-6B, 3.51-6C, and 3.51-10, Insurance 25-2 Code; 25-3 (4) Section 1(F)(5), Chapter 397, Acts of the 54th 25-4 Legislature, Regular Session, 1955 (Article 3.70-1, Vernon's Texas 25-5 Insurance Code); 25-6 (5) Sections 2(F), (G), and (L), Chapter 397, Acts of 25-7 the 54th Legislature, Regular Session, 1955 (Article 3.70-2, 25-8 Vernon's Texas Insurance Code); 25-9 (6) Articles 3.72, 3.74, 3.77, 21.21-2, 21.21-4, 25-10 21.46, and 21.52C, Insurance Code; 25-11 (7) Article 21.21-6, Insurance Code, as added by 25-12 Chapter 522, Acts of the 74th Legislature, Regular Session, 1995; 25-13 (8) Article 21.52D, Insurance Code, as added by 25-14 Chapter 935, Acts of the 73rd Legislature, Regular Session, 1993; 25-15 (9) Articles 21.53A, 21.53C, 21.58A, 21.71, and 25-16 21.79D, Insurance Code; 25-17 (10) Sections 2(a) and 4(a), Article 1.36, Insurance 25-18 Code; 25-19 (11) Section 5(e), Texas Employees Uniform Group 25-20 Insurance Benefits Act (Article 3.50-2, Vernon's Texas Insurance 25-21 Code); 25-22 (12) Section 4(b)(4)(D), Texas State College and 25-23 University Employees Uniform Insurance Benefits Act (Article 25-24 3.50-3, Vernon's Texas Insurance Code); 25-25 (13) Section 3A, Article 3.51-6, Insurance Code; 25-26 (14) Section 3C, Article 3.51-6, as added by Chapter 25-27 1041, Acts of the 71st Legislature, Regular Session, 1989; 26-1 (15) Article 21.07-6, Insurance Code, except Sections 26-2 4, 5, 10, and 20(a)(1); and 26-3 (16) Section 5, Article 21.53, Insurance Code. 26-4 (c) An amendment to a law listed in Subsection (b) of this 26-5 article applies to an integrated health plan only if specifically 26-6 made applicable to an integrated health plan in its enactment. 26-7 (d) No provision of this code or other laws, other than 26-8 those listed by Subsection (b) of this article, whether existing 26-9 on or enacted after January 15, 1997, apply to an integrated health 26-10 plan unless that law is expressly added to that list. 26-11 (e) Unless this subsection is specifically amended to the 26-12 contrary, a law or rule, regardless of its effective date, may not 26-13 prohibit or in any way restrict an integrated health plan from: 26-14 (1) selectively contracting with or declining to 26-15 contract with any or all providers as the integrated health plan 26-16 considers necessary; 26-17 (2) contracting for or declining to contract for an 26-18 individual health care service or full range of health care 26-19 services as the integrated health plan considers necessary, if the 26-20 service or services may be legally provided by the contracting 26-21 provider; or 26-22 (3) requiring enrolled members of the integrated 26-23 health plan who wish to obtain the services covered by the 26-24 integrated health plan to use the providers specified by the 26-25 integrated health plan. 26-26 SECTION 2. This Act takes effect September 1, 1997. 26-27 SECTION 3. The importance of this legislation and the 27-1 crowded condition of the calendars in both houses create an 27-2 emergency and an imperative public necessity that the 27-3 constitutional rule requiring bills to be read on three several 27-4 days in each house be suspended, and this rule is hereby suspended.