1-1 By: Berlanga (Senate Sponsor - Sibley) H.B. No. 3269
1-2 (In the Senate - Received from the House May 9, 1997;
1-3 May 12, 1997, read first time and referred to Committee on Economic
1-4 Development; May 17, 1997, reported favorably by the following
1-5 vote: Yeas 6, Nays 0; May 17, 1997, sent to printer.)
1-6 A BILL TO BE ENTITLED
1-7 AN ACT
1-8 relating to requirements for evidences of coverages issued by
1-9 health maintenance organizations.
1-10 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-11 SECTION 1. Section 9, Texas Health Maintenance Organization
1-12 Act (Article 20A.09, Vernon's Texas Insurance Code), as amended by
1-13 Chapters 1091 and 1096, Acts of the 70th Legislature, Regular
1-14 Session, 1987, is amended to read as follows:
1-15 Sec. 9. EVIDENCE OF COVERAGE AND CHARGES. (a) [(1)] Every
1-16 enrollee residing in this state is entitled to evidence of coverage
1-17 under a health care plan. If the enrollee obtains coverage under a
1-18 health care plan through an insurance policy or a contract issued
1-19 by a group hospital service corporation, whether by option or
1-20 otherwise, the insurer or the group hospital service corporation
1-21 shall issue the evidence of coverage. Otherwise, the health
1-22 maintenance organization shall issue the evidence of coverage.
1-23 (b) [(2)] No evidence of coverage, or amendment thereto,
1-24 shall be issued or delivered to any person in this state until a
1-25 copy of the form of evidence of coverage, or amendment thereto, has
1-26 been filed with and approved by the commissioner.
1-27 (c) [(3)] An evidence of coverage may not [shall] contain[:
1-28 (A) no] provisions or statements which are unjust, unfair,
1-29 inequitable, misleading, deceptive, which encourage
1-30 misrepresentation, or which are untrue, misleading, or deceptive as
1-31 defined in Section 14 of this Act.
1-32 (d) Each evidence of coverage must contain provisions
1-33 regarding the requirements adopted under Subsections (e)-(i) of
1-34 this section.
1-35 (e) Each evidence or coverage must contain[; and (B)] a
1-36 clear and complete statement, if a contract, or a reasonably
1-37 complete facsimile, if a certificate, of:
1-38 (1) [(i)] the medical, health care services, or single
1-39 health care service and the issuance of other benefits, if any, to
1-40 which the enrollee is entitled under the health care plan or single
1-41 health care service plan;
1-42 (2) [(ii)] any limitation on the services, kinds of
1-43 services, benefits, or kinds of benefits to be provided, including
1-44 any deductible or co-payment feature;
1-45 (3) [(iii)] where and in what manner information is
1-46 available as to how services may be obtained; and
1-47 (4) [(iv)] a clear and understandable description of
1-48 the health maintenance organization's methods for resolving
1-49 enrollee complaints. Any subsequent changes may be evidenced in a
1-50 separate document issued to the enrollee.
1-51 (f) If medically necessary covered services are not
1-52 available through network physicians or providers, the health
1-53 maintenance organization, on the request of a network physician or
1-54 provider, within a reasonable period, shall allow referral to a
1-55 non-network physician or provider and shall fully reimburse the
1-56 non-network physician or provider at the usual and customary or an
1-57 agreed rate. The evidence of coverage must provide for a review by
1-58 a specialist of the same specialty or a similar specialty as the
1-59 type of physician or provider to whom a referral is requested
1-60 before the health maintenance organization may deny a referral.
1-61 (g) An enrollee with a chronic, disabling, or
1-62 life-threatening illness may apply to the health maintenance
1-63 organization's medical director to use a nonprimary care physician
1-64 specialist as the enrollee's primary care physician. An
2-1 application made by an enrollee under this subsection must include
2-2 information specified by the health maintenance organization,
2-3 including certification of the medical need, and must be signed by
2-4 the enrollee and the nonprimary care physician specialist
2-5 interested in serving as the enrollee's primary care physician. To
2-6 be eligible to serve as the enrollee's primary care physician, the
2-7 specialist must:
2-8 (1) meet the health maintenance organization's
2-9 requirements for primary care physician participation; and
2-10 (2) be willing to accept the coordination of all of
2-11 the enrollee's health care needs.
2-12 (h) If the request for special consideration described by
2-13 Subsection (g) is denied, an enrollee may appeal the decision
2-14 through the health maintenance organization's established complaint
2-15 and appeals process.
2-16 (i) The effective date of the designation of a nonprimary
2-17 care physician specialist as an enrollee's primary care physician,
2-18 as provided by Subsection (g) of this section, may not be applied
2-19 retroactively. The health maintenance organization may not reduce
2-20 the amount of compensation owed to the original primary care
2-21 physician for services provided before the date of the new
2-22 designation.
2-23 (j) [(4)] Any form of the evidence of coverage or group
2-24 contract to be used in this state, and any amendments thereto, are
2-25 subject to the filing and approval requirements of Subsection
2-26 (l) [(c)] of this section, unless it is subject to the jurisdiction
2-27 of the commissioner under the laws governing health insurance or
2-28 group hospital service corporations, in which event the filing and
2-29 approval provisions of such law shall apply. To the extent,
2-30 however, that such provisions do not apply to the requirements of
2-31 Subsections (c)-(i) [Subdivision (3), Subsection (a)] of this
2-32 section, the requirements of those subsections apply [Subdivision
2-33 (3) shall be applicable].
2-34 (k) [(b)] The formula or method for calculating the schedule
2-35 of charges for enrollee coverage for medical services or health
2-36 care services must be filed with the commissioner before it is used
2-37 in conjunction with any health care plan. The formula or method
2-38 must be established in accordance with actuarial principles for the
2-39 various categories of enrollees. The charges resulting from the
2-40 application of the formula or method may not be altered for an
2-41 individual enrollee based on the status of that enrollee's health.
2-42 The formula or method must produce charges that are not excessive,
2-43 inadequate, or unfairly discriminatory, and benefits must be
2-44 reasonable with respect to the rates produced by the formula or
2-45 method. A statement by a qualified actuary that certifies the
2-46 appropriateness of the formula or method must accompany the filing
2-47 together with supporting information considered adequate by the
2-48 commissioner.
2-49 (l) [(c)] The commissioner shall, within a reasonable
2-50 period, approve any form of the evidence of coverage or group
2-51 contract, or amendment thereto, if the requirements of this section
2-52 are met. After notice and hearing, the commissioner may withdraw
2-53 previous approval of any form, if the commissioner determines that
2-54 it violates or does not comply with this Act or a rule adopted by
2-55 the commissioner [State Board of Insurance]. It shall be unlawful
2-56 to issue such form until approved. If the commissioner disapproves
2-57 such form, the commissioner shall notify the filer. In the notice,
2-58 the commissioner shall specify the reason for the disapproval. A
2-59 hearing shall be granted within 30 days after a request in writing
2-60 by the person filing. If the commissioner does not disapprove any
2-61 form within 30 days after the filing of such form it shall be
2-62 considered approved; provided that the commissioner may by written
2-63 notice extend the period for approval or disapproval of any filing
2-64 for such further time, not exceeding an additional 30 days, as
2-65 necessary for proper consideration of the filing.
2-66 (m) [(d)] The commissioner may require the submission of
2-67 whatever relevant information he or she deems necessary in
2-68 determining whether to approve or disapprove a filing made pursuant
2-69 to this section.
3-1 (n) Articles 3.51-9 and 3.74, Insurance Code, and Section
3-2 1(F)(5), Chapter 397, Acts of the 54th Legislature, Regular
3-3 Session, 1955 (Article 3.70-1(F)(5), Vernon's [(e) Article 3.74 of
3-4 the] Texas Insurance Code), apply [applies] to health maintenance
3-5 organizations other than those health maintenance organizations
3-6 offering only a single health care service plan.
3-7 (o) [(f) Article 3.51-9 of the Texas Insurance Code applies
3-8 to health maintenance organizations other than those health
3-9 maintenance organizations offering only a single health care
3-10 service plan.]
3-11 [(g)] Evidence of coverage does not constitute a health
3-12 insurance policy as that term is defined by the Insurance Code.
3-13 (p) [(h) Article 3.70-1(F)(5) of the Insurance Code applies
3-14 to health maintenance organizations other than those health
3-15 maintenance organizations offering only a single health care
3-16 service plan.] Article 3.72 of the Insurance Code applies to
3-17 health maintenance organizations to the extent that such article is
3-18 not in conflict with this Act and to the extent that the
3-19 residential treatment center or crisis stabilization unit is
3-20 located within the service area of the health maintenance
3-21 organization and subject to such inspection and review as required
3-22 by this Act or the rules hereunder.
3-23 (q) [(i)] Article 21.55, Insurance Code, [of this code]
3-24 applies to out-of-area or emergency claims for which benefits are
3-25 not assigned or payment is not made directly to the physician or
3-26 provider.
3-27 (r) [(j)] A health maintenance organization may provide
3-28 benefits under a health care plan to a dependent grandchild of an
3-29 enrollee when the dependent grandchild is less than 21 years old
3-30 and living with and in the household of the enrollee.
3-31 SECTION 2. Section 9, Texas Health Maintenance Organization
3-32 Act (Article 20A.09, Vernon's Texas Insurance Code), as amended by
3-33 this Act, applies only to an evidence of coverage that is
3-34 delivered, issued for delivery, or renewed on or after January 1,
3-35 1998. An evidence of coverage that is delivered, issued for
3-36 delivery, or renewed before January 1, 1998, is governed by the law
3-37 as it existed immediately before the effective date of this Act,
3-38 and that law is continued in effect for that purpose.
3-39 SECTION 3. The importance of this legislation and the
3-40 crowded condition of the calendars in both houses create an
3-41 emergency and an imperative public necessity that the
3-42 constitutional rule requiring bills to be read on three several
3-43 days in each house be suspended, and this rule is hereby suspended.
3-44 * * * * *