1-1 AN ACT
1-2 relating to requirements for evidences of coverages issued by
1-3 health maintenance organizations.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Section 9, Texas Health Maintenance Organization
1-6 Act (Article 20A.09, Vernon's Texas Insurance Code), as amended by
1-7 Chapters 1091 and 1096, Acts of the 70th Legislature, Regular
1-8 Session, 1987, is amended to read as follows:
1-9 Sec. 9. EVIDENCE OF COVERAGE AND CHARGES. (a) [(1)] Every
1-10 enrollee residing in this state is entitled to evidence of coverage
1-11 under a health care plan. If the enrollee obtains coverage under a
1-12 health care plan through an insurance policy or a contract issued
1-13 by a group hospital service corporation, whether by option or
1-14 otherwise, the insurer or the group hospital service corporation
1-15 shall issue the evidence of coverage. Otherwise, the health
1-16 maintenance organization shall issue the evidence of coverage.
1-17 (b) [(2)] No evidence of coverage, or amendment thereto,
1-18 shall be issued or delivered to any person in this state until a
1-19 copy of the form of evidence of coverage, or amendment thereto, has
1-20 been filed with and approved by the commissioner.
1-21 (c) [(3)] An evidence of coverage may not [shall] contain[:
1-22 (A) no] provisions or statements which are unjust, unfair,
1-23 inequitable, misleading, deceptive, which encourage
1-24 misrepresentation, or which are untrue, misleading, or deceptive as
2-1 defined in Section 14 of this Act.
2-2 (d) Each evidence of coverage must contain provisions
2-3 regarding the requirements adopted under Subsections (e)-(i) of
2-4 this section.
2-5 (e) Each evidence or coverage must contain[; and (B)] a
2-6 clear and complete statement, if a contract, or a reasonably
2-7 complete facsimile, if a certificate, of:
2-8 (1) [(i)] the medical, health care services, or single
2-9 health care service and the issuance of other benefits, if any, to
2-10 which the enrollee is entitled under the health care plan or single
2-11 health care service plan;
2-12 (2) [(ii)] any limitation on the services, kinds of
2-13 services, benefits, or kinds of benefits to be provided, including
2-14 any deductible or co-payment feature;
2-15 (3) [(iii)] where and in what manner information is
2-16 available as to how services may be obtained; and
2-17 (4) [(iv)] a clear and understandable description of
2-18 the health maintenance organization's methods for resolving
2-19 enrollee complaints. Any subsequent changes may be evidenced in a
2-20 separate document issued to the enrollee.
2-21 (f) If medically necessary covered services are not
2-22 available through network physicians or providers, the health
2-23 maintenance organization, on the request of a network physician or
2-24 provider, within a reasonable period, shall allow referral to a
2-25 non-network physician or provider and shall fully reimburse the
2-26 non-network physician or provider at the usual and customary or an
2-27 agreed rate. The evidence of coverage must provide for a review by
3-1 a specialist of the same specialty or a similar specialty as the
3-2 type of physician or provider to whom a referral is requested
3-3 before the health maintenance organization may deny a referral.
3-4 (g) An enrollee with a chronic, disabling, or
3-5 life-threatening illness may apply to the health maintenance
3-6 organization's medical director to use a nonprimary care physician
3-7 specialist as the enrollee's primary care physician. An
3-8 application made by an enrollee under this subsection must include
3-9 information specified by the health maintenance organization,
3-10 including certification of the medical need, and must be signed by
3-11 the enrollee and the nonprimary care physician specialist
3-12 interested in serving as the enrollee's primary care physician. To
3-13 be eligible to serve as the enrollee's primary care physician, the
3-14 specialist must:
3-15 (1) meet the health maintenance organization's
3-16 requirements for primary care physician participation; and
3-17 (2) be willing to accept the coordination of all of
3-18 the enrollee's health care needs.
3-19 (h) If the request for special consideration described by
3-20 Subsection (g) is denied, an enrollee may appeal the decision
3-21 through the health maintenance organization's established complaint
3-22 and appeals process.
3-23 (i) The effective date of the designation of a nonprimary
3-24 care physician specialist as an enrollee's primary care physician,
3-25 as provided by Subsection (g) of this section, may not be applied
3-26 retroactively. The health maintenance organization may not reduce
3-27 the amount of compensation owed to the original primary care
4-1 physician for services provided before the date of the new
4-2 designation.
4-3 (j) [(4)] Any form of the evidence of coverage or group
4-4 contract to be used in this state, and any amendments thereto, are
4-5 subject to the filing and approval requirements of Subsection
4-6 (l) [(c)] of this section, unless it is subject to the jurisdiction
4-7 of the commissioner under the laws governing health insurance or
4-8 group hospital service corporations, in which event the filing and
4-9 approval provisions of such law shall apply. To the extent,
4-10 however, that such provisions do not apply to the requirements of
4-11 Subsections (c)-(i) [Subdivision (3), Subsection (a)] of this
4-12 section, the requirements of those subsections apply [Subdivision
4-13 (3) shall be applicable].
4-14 (k) [(b)] The formula or method for calculating the schedule
4-15 of charges for enrollee coverage for medical services or health
4-16 care services must be filed with the commissioner before it is used
4-17 in conjunction with any health care plan. The formula or method
4-18 must be established in accordance with actuarial principles for the
4-19 various categories of enrollees. The charges resulting from the
4-20 application of the formula or method may not be altered for an
4-21 individual enrollee based on the status of that enrollee's health.
4-22 The formula or method must produce charges that are not excessive,
4-23 inadequate, or unfairly discriminatory, and benefits must be
4-24 reasonable with respect to the rates produced by the formula or
4-25 method. A statement by a qualified actuary that certifies the
4-26 appropriateness of the formula or method must accompany the filing
4-27 together with supporting information considered adequate by the
5-1 commissioner.
5-2 (l) [(c)] The commissioner shall, within a reasonable
5-3 period, approve any form of the evidence of coverage or group
5-4 contract, or amendment thereto, if the requirements of this section
5-5 are met. After notice and hearing, the commissioner may withdraw
5-6 previous approval of any form, if the commissioner determines that
5-7 it violates or does not comply with this Act or a rule adopted by
5-8 the commissioner [State Board of Insurance]. It shall be unlawful
5-9 to issue such form until approved. If the commissioner disapproves
5-10 such form, the commissioner shall notify the filer. In the notice,
5-11 the commissioner shall specify the reason for the disapproval. A
5-12 hearing shall be granted within 30 days after a request in writing
5-13 by the person filing. If the commissioner does not disapprove any
5-14 form within 30 days after the filing of such form it shall be
5-15 considered approved; provided that the commissioner may by written
5-16 notice extend the period for approval or disapproval of any filing
5-17 for such further time, not exceeding an additional 30 days, as
5-18 necessary for proper consideration of the filing.
5-19 (m) [(d)] The commissioner may require the submission of
5-20 whatever relevant information he or she deems necessary in
5-21 determining whether to approve or disapprove a filing made pursuant
5-22 to this section.
5-23 (n) Articles 3.51-9 and 3.74, Insurance Code, and Section
5-24 1(F)(5), Chapter 397, Acts of the 54th Legislature, Regular
5-25 Session, 1955 (Article 3.70-1(F)(5), Vernon's [(e) Article 3.74 of
5-26 the] Texas Insurance Code), apply [applies] to health maintenance
5-27 organizations other than those health maintenance organizations
6-1 offering only a single health care service plan.
6-2 (o) [(f) Article 3.51-9 of the Texas Insurance Code applies
6-3 to health maintenance organizations other than those health
6-4 maintenance organizations offering only a single health care
6-5 service plan.]
6-6 [(g)] Evidence of coverage does not constitute a health
6-7 insurance policy as that term is defined by the Insurance Code.
6-8 (p) [(h) Article 3.70-1(F)(5) of the Insurance Code applies
6-9 to health maintenance organizations other than those health
6-10 maintenance organizations offering only a single health care
6-11 service plan.] Article 3.72 of the Insurance Code applies to
6-12 health maintenance organizations to the extent that such article is
6-13 not in conflict with this Act and to the extent that the
6-14 residential treatment center or crisis stabilization unit is
6-15 located within the service area of the health maintenance
6-16 organization and subject to such inspection and review as required
6-17 by this Act or the rules hereunder.
6-18 (q) [(i)] Article 21.55, Insurance Code, [of this code]
6-19 applies to out-of-area or emergency claims for which benefits are
6-20 not assigned or payment is not made directly to the physician or
6-21 provider.
6-22 (r) [(j)] A health maintenance organization may provide
6-23 benefits under a health care plan to a dependent grandchild of an
6-24 enrollee when the dependent grandchild is less than 21 years old
6-25 and living with and in the household of the enrollee.
6-26 SECTION 2. Section 9, Texas Health Maintenance Organization
6-27 Act (Article 20A.09, Vernon's Texas Insurance Code), as amended by
7-1 this Act, applies only to an evidence of coverage that is
7-2 delivered, issued for delivery, or renewed on or after January 1,
7-3 1998. An evidence of coverage that is delivered, issued for
7-4 delivery, or renewed before January 1, 1998, is governed by the law
7-5 as it existed immediately before the effective date of this Act,
7-6 and that law is continued in effect for that purpose.
7-7 SECTION 3. The importance of this legislation and the
7-8 crowded condition of the calendars in both houses create an
7-9 emergency and an imperative public necessity that the
7-10 constitutional rule requiring bills to be read on three several
7-11 days in each house be suspended, and this rule is hereby suspended.
_______________________________ _______________________________
President of the Senate Speaker of the House
I certify that H.B. No. 3269 was passed by the House on May
8, 1997, by a non-record vote.
_______________________________
Chief Clerk of the House
I certify that H.B. No. 3269 was passed by the Senate on May
24, 1997, by a viva-voce vote.
_______________________________
Secretary of the Senate
APPROVED: _____________________
Date
_____________________
Governor