By: Cain, Harris, Nelson S.B. No. 383 Sibley, Madla A BILL TO BE ENTITLED AN ACT 1-1 relating to the regulation of preferred provider benefit plans. 1-2 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-3 SECTION 1. Chapter 3, Insurance Code, is amended by adding 1-4 Article 3.70-3C to read as follows: 1-5 Art. 3.70-3C. PREFERRED PROVIDER BENEFIT PLANS 1-6 Sec. 1. DEFINITIONS. In this article: 1-7 (1) "Emergency care" means health care services 1-8 provided in a hospital emergency facility or comparable facility to 1-9 evaluate and stabilize medical conditions of a recent onset and 1-10 severity, including but not limited to severe pain, that would lead 1-11 a prudent layperson, possessing an average knowledge of medicine 1-12 and health, to believe that the person's condition, sickness, or 1-13 injury is of such a nature that failure to get immediate medical 1-14 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 2-1 individual insurance policy, certificate, or contract providing 2-2 benefits for medical or surgical expenses incurred as a result of 2-3 an accident or sickness. 2-4 (3) "Health care provider" or "provider" means any 2-5 practitioner, institutional provider, or other person or 2-6 organization that furnishes health care services and that is 2-7 licensed or otherwise authorized to practice in this state, other 2-8 than a physician. 2-9 (4) "Hospital" means a licensed public or private 2-10 institution as defined in Chapter 241, Health and Safety Code, or 2-11 in Subtitle C, Title 7, Health and Safety Code. 2-12 (5) "Institutional provider" means a hospital, nursing 2-13 home, or any other medical or health-related service facility 2-14 caring for the sick or injured or providing care for other coverage 2-15 which may be provided in a health insurance policy. 2-16 (6) "Insurer" means any life, health, and accident; 2-17 health and accident; or health insurance company or company 2-18 operating pursuant to Chapter 3, 10, 20, 22, or 26 of this code 2-19 authorized to issue, deliver, or issue for delivery in this state 2-20 health insurance policies, certificates, or contracts. 2-21 (7) "Life threatening" means a disease or condition 2-22 where the likelihood of death is high unless the course of the 2-23 disease or condition is interrupted. 2-24 (8) "Physician" means anyone licensed to practice 2-25 medicine in the State of Texas; 3-1 (9) "Practitioner" means a person who practices a 3-2 healing art and is a practitioner specified in Section 2(B), 3-3 Chapter 397, Acts of the 54th Legislature, 1955 (Article 3.70-2, 3-4 Vernon's Texas Insurance Code), or Article 21.52 of this code. 3-5 (10) "Preferred provider" means a physician, 3-6 practitioner, hospital, institutional provider, or health care 3-7 provider, or an organization of physicians or health care 3-8 providers, who contracts with an insurer to provide medical care or 3-9 health care to insureds covered by a health insurance policy, 3-10 certificate, or contract. 3-11 (11) "Prospective insured" means: 3-12 (A) for group coverage, an individual, including 3-13 dependents, eligible for coverage under a health insurance policy 3-14 issued to the group; or 3-15 (B) for individual coverage, an individual, 3-16 including dependents, eligible for coverage who has expressed an 3-17 interest in purchasing an individual health insurance policy. 3-18 (12) "Quality assessment" means a mechanism which is 3-19 in place or put into place and utilized by an insurer for the 3-20 purposes of evaluating, monitoring, or improving the quality and 3-21 effectiveness of the medical care delivered by physicians or health 3-22 care providers to persons covered by a health insurance policy to 3-23 insure that the care delivered is consistent with that delivered by 3-24 an ordinary, reasonable, prudent physician or health care provider 3-25 under the same or similar circumstances. 4-1 (13) "Service area" means a geographic area or areas 4-2 set forth in the health insurance policy or preferred provider 4-3 contract in which a network of preferred providers is offered and 4-4 available. 4-5 Sec. 2. APPLICATION. This article applies to any preferred 4-6 provider benefit plan in which an insurer provides, through its 4-7 health insurance policy, for the payment of a level of coverage 4-8 which is different from the basic level of coverage provided by the 4-9 health insurance policy if the insured uses a preferred provider. 4-10 This article does not apply to provisions for dental care benefits 4-11 in any health insurance policy. 4-12 Sec. 3. CONTRACTING REQUIREMENTS. (a) A health insurance 4-13 policy that includes different benefits from the basic level of 4-14 coverage for the use of preferred providers shall not be considered 4-15 unjust under Article 3.42 of this code, or unfair discrimination 4-16 under Article 21.21-6, as added by Chapter 415, Acts of the 74th 4-17 Legislature, 1995, or Article 21.21-8 of this code or to violate 4-18 Subsection (B), Section 2, Chapter 397, Acts of the 54th 4-19 Legislature, 1955 (Article 3.70-2, Vernon's Texas Insurance Code), 4-20 or Article 21.52 of this code, if it meets the requirements of this 4-21 section. 4-22 (b)(1) Physicians, practitioners, institutional providers, 4-23 and health care providers other than physicians, practitioners, and 4-24 institutional providers, if such other health care providers are 4-25 included by the insurer as preferred providers, licensed to treat 5-1 injuries or illnesses or to provide services covered by the health 5-2 insurance policy that comply with the terms and conditions 5-3 established by the insurer for designation as preferred providers 5-4 may apply for and shall be afforded a fair, reasonable, and 5-5 equivalent opportunity to become preferred providers. Such 5-6 designation shall not be unreasonably withheld. 5-7 (2) If a designation as a preferred provider is 5-8 withheld relating to a physician or practitioner, the insurer shall 5-9 provide a reasonable review mechanism that incorporates, in an 5-10 advisory role only, a review panel. Any recommendation of the 5-11 panel shall be provided on request to the affected physician or 5-12 practitioner. In the event of an insurer determination contrary to 5-13 any recommendation of the panel, a written explanation of the 5-14 insurer's determination shall also be provided on request to the 5-15 affected physician or practitioner. 5-16 (3) The review panel shall be composed of not less 5-17 than three individuals selected by the insurer from a list of the 5-18 physicians or practitioners contracting with the insurer and shall 5-19 include one member who is a physician or practitioner in the same 5-20 or similar specialty as the affected physician or practitioner, if 5-21 available. The list of physicians or practitioners is to be 5-22 provided to the insurer by the physicians or practitioners 5-23 contracting with the insurer in the applicable service area. 5-24 (4) The insurer must give a physician or health care 5-25 provider not designated on initial application written reasons for 6-1 denial of the designation; however, unless otherwise limited by 6-2 this code, this section does not prohibit an insurer from rejecting 6-3 an application from a physician or health care provider based on a 6-4 determination that the preferred provider benefit plan has 6-5 sufficient qualified providers. 6-6 (c) Any insurer, when sponsoring a preferred provider 6-7 benefit plan, shall immediately notify, by publication or in 6-8 writing to each physician and practitioner, all physicians and 6-9 practitioners in the geographic area covered by the plan of its 6-10 intent to offer such a plan and of the opportunity to participate. 6-11 Such notice and opportunity shall be provided on a yearly basis 6-12 thereafter to noncontracting physicians and practitioners in the 6-13 geographic area covered by the plan. The insurer shall on request 6-14 make available to any physician or health care provider information 6-15 concerning the application process and qualification requirements 6-16 for participation as a provider in the plan. 6-17 (d) Insurers which market a preferred provider benefit plan 6-18 must contract with physicians and health care providers to assure 6-19 that all medical and health care services and items contained in 6-20 the package of benefits for which coverage is provided, including 6-21 treatment of illnesses and injuries, will be provided under the 6-22 health insurance policy in a manner assuring both availability and 6-23 accessibility of adequate personnel, specialty care, and 6-24 facilities. 6-25 (e) Each insured patient shall have the right to treatment 7-1 and diagnostic techniques as prescribed by the physician or other 7-2 health care provider included in the preferred provider benefit 7-3 plan. 7-4 (f) Every contract by an insurer with a physician, 7-5 physicians group, or practitioner shall have a mechanism for the 7-6 resolution of complaints initiated by the insured, physicians, 7-7 physicians groups, or practitioners. Such mechanism shall provide 7-8 for reasonable due process which includes, in an advisory role 7-9 only, a review panel selected in the manner described in Subsection 7-10 (b)(3) of this section. 7-11 (g) Before terminating a contract with a preferred provider, 7-12 the insurer shall provide written reasons for the termination. 7-13 Prior to termination of a physician or practitioner, the insurer 7-14 shall, on request, provide a reasonable review mechanism that 7-15 incorporates, in an advisory role only, a review panel selected in 7-16 the manner described in Subsection (b)(3) of this section, except 7-17 in cases in which there is imminent harm to a patient's health or 7-18 an action by a state medical or other physician licensing board or 7-19 other government agency that effectively impairs a physician's or 7-20 practitioner's ability to practice medicine or in cases of fraud or 7-21 malfeasance. Any recommendation of the panel shall be provided to 7-22 the affected physician or practitioner. In the event of an insurer 7-23 determination contrary to any recommendation of the panel, a 7-24 written explanation of the insurer's determination shall also be 7-25 provided on request to the affected physician or practitioner. On 8-1 request, an expedited review process shall be made available to a 8-2 physician or practitioner who is being terminated. The expedited 8-3 review process shall comply with rules established by the 8-4 commissioner. 8-5 (h) An insurer that conducts, uses, or relies on economic 8-6 profiling to admit or terminate physicians or health care providers 8-7 shall make available to a physician or health care provider on 8-8 request the economic profile of that physician or health care 8-9 provider, including the written criteria by which the physician or 8-10 health care provider's performance is to be measured. An economic 8-11 profile must be adjusted to recognize the characteristics of a 8-12 physician's or health care provider's practice that may account for 8-13 variations from expected costs. 8-14 (i) No insurer shall engage in quality assessment except 8-15 through a panel of not less than three physicians selected by the 8-16 insurer from among a list of physicians contracting with the 8-17 insurer, which list is to be provided by the physicians contracting 8-18 with the insurer in the applicable service area. 8-19 (j) A preferred provider contract may not require any health 8-20 care provider, physician, or physicians group to execute hold 8-21 harmless clauses in order to shift the insurer's tort liability 8-22 resulting from acts or omissions of the insurer to the preferred 8-23 provider. 8-24 (k) A preferred provider contract must include a provision 8-25 by which the physician or health care provider agrees that if the 9-1 preferred provider is compensated on a discounted fee basis, the 9-2 insured may be billed only on the discounted fee and not the full 9-3 charge. 9-4 (l) An insurer may enter into an agreement with a preferred 9-5 provider organization for the purposes of offering a network of 9-6 preferred providers. The agreement may provide that the notice 9-7 and other insurer requirements of this section may be complied with 9-8 by either the insurer or the preferred provider organization on the 9-9 insurer's behalf. If an insurer enters into an agreement with a 9-10 preferred provider organization under this section, it is the 9-11 insurer's responsibility to meet the requirements of this article 9-12 or to assure that the requirements are met. All preferred provider 9-13 insurance benefit plans offered in this state shall comply with the 9-14 requirements of this article. 9-15 Sec. 4. CONTINUITY OF CARE. (a) The insurer shall 9-16 establish reasonable procedures for assuring a transition of 9-17 insureds to physicians or health care providers and for continuity 9-18 of treatment. Insurers shall provide, subject to Section 6(e) of 9-19 this article, reasonable advance notice to the insured of the 9-20 impending termination from the plan of a physician or health care 9-21 provider who is currently treating the insured and in the event of 9-22 termination of a preferred provider's participation in the plan 9-23 shall make available to the insured a current listing of preferred 9-24 providers. 9-25 (b) Each contract between an insurer and a physician or 10-1 health care provider must provide that the termination of a 10-2 preferred provider's participation in the plan, except for reason 10-3 of medical competence or professional behavior, shall not release 10-4 the physician or health care provider from the generally recognized 10-5 obligation to treat the insured and cooperate in arranging for 10-6 appropriate referrals; nor does it release the insurer from the 10-7 obligation to reimburse the physician or health care provider or, 10-8 if applicable, the insured at the same preferred provider rate if, 10-9 at the time of the preferred provider's termination, the insured 10-10 has special circumstances such as a disability, acute condition, or 10-11 life-threatening illness or is past the 24th week of pregnancy and 10-12 is receiving treatment in accordance with the dictates of medical 10-13 prudence. 10-14 (c) For purposes of Subsection (b) of this section, "special 10-15 circumstances" means a condition such that the treating physician 10-16 or health care provider reasonably believes that discontinuing care 10-17 by the treating physician or provider could cause harm to the 10-18 patient. Special circumstances shall be identified by the treating 10-19 physician or health care provider, who must request that the 10-20 insured be permitted to continue treatment under the physician's or 10-21 provider's care and agree not to seek payment from the patient of 10-22 any amounts for which the insured would not be responsible if the 10-23 physician or provider were still a preferred provider. 10-24 (d) Contracts between an insurer, physicians, and health 10-25 care providers shall include procedures for resolving disputes 11-1 regarding the necessity for continued treatment by a physician or 11-2 provider. 11-3 (e) This section does not extend the obligation of the 11-4 insurer to reimburse, at the preferred provider level of coverage, 11-5 the terminated physician or health care provider or, if applicable, 11-6 the insured for ongoing treatment of an insured after the 90th day 11-7 from the effective date of the termination. However, the 11-8 obligation of the insurer to reimburse, at the preferred provider 11-9 level of coverage, the terminated physician or health care provider 11-10 or, if applicable, the insured who at the time of the termination 11-11 is past the 24th week of pregnancy, extends through delivery of the 11-12 child, immediate post-partum care, and the follow-up checkup within 11-13 the first six weeks of delivery. 11-14 Sec. 5. EMERGENCY CARE PROVISIONS. If the insured cannot 11-15 reasonably reach a preferred provider, an insurer shall provide 11-16 reimbursement for the following emergency care services at the 11-17 preferred level of benefits until the insured can reasonably be 11-18 expected to transfer to a preferred provider: 11-19 (1) any medical screening examination or other 11-20 evaluation required by state or federal law to be provided in the 11-21 emergency facility of a hospital which is necessary to determine 11-22 whether a medical emergency condition exists; 11-23 (2) necessary emergency care services including the 11-24 treatment and stabilization of an emergency medical condition; and 11-25 (3) services originating in a hospital emergency 12-1 facility following treatment or stabilization of an emergency 12-2 medical condition. 12-3 Sec. 6. MANDATORY DISCLOSURE REQUIREMENTS. (a) All health 12-4 insurance policies, health benefit plan certificates, endorsements, 12-5 amendments, applications, or riders shall be written in plain 12-6 language, must be in a readable and understandable format, and must 12-7 comply with all applicable requirements relating to minimum 12-8 readability requirements. 12-9 (b) The insurer shall provide to a current or prospective 12-10 group contract holder or current or prospective insured on request 12-11 an accurate written description of the terms and conditions of the 12-12 policy to allow the current or prospective group contract holder or 12-13 current or prospective insured to make comparisons and informed 12-14 decisions before selecting among health care plans. The written 12-15 description must be in a readable and understandable format as 12-16 prescribed by the commissioner and must include a current list of 12-17 preferred providers. The insurer may provide its handbook to 12-18 satisfy this requirement provided the handbook's content is 12-19 substantively similar to and achieves the same level of disclosure 12-20 as the written description prescribed by the commissioner and the 12-21 current list of physicians and health care providers is provided. 12-22 (c) A current list of preferred providers shall be provided 12-23 to all insureds no less than annually. 12-24 (d) No insurer, or agent or representative of an insurer, 12-25 may cause or permit the use or distribution of prospective insured 13-1 information which is untrue or misleading. 13-2 (e)(1) If a physician or practitioner is terminated for 13-3 reasons other than at the preferred provider's request, an insurer 13-4 shall not notify enrollees of the termination until the effective 13-5 date of the termination or at such time as a review panel makes a 13-6 formal recommendation regarding the termination, whichever is 13-7 later. 13-8 (2) If a physician or provider voluntarily terminates 13-9 the physician's or provider's relationship with an insurer, the 13-10 physician or provider shall provide reasonable notice to enrollees 13-11 under the physician's or provider's care. The insurer shall 13-12 provide assistance to the physician or provider in assuring that 13-13 the notice requirements of this subdivision are met. 13-14 (3) If a physician or practitioner is terminated for 13-15 reasons related to imminent harm, an insurer may notify enrollees 13-16 immediately. 13-17 Sec. 7. PROHIBITED PRACTICES. (a) No insurer shall engage 13-18 in any retaliatory action against an insured, including 13-19 cancellation of or refusal to renew a policy, because the insured, 13-20 or a person acting on behalf of the insured, has filed a complaint 13-21 against the insurer or against a preferred provider or has appealed 13-22 a decision of the insurer. 13-23 (b) No insurer shall engage in any retaliatory action 13-24 against a physician or health care provider, including termination 13-25 of or refusal to renew a contract, because the physician or 14-1 provider has, on behalf of an insured, reasonably filed a complaint 14-2 against the insurer or has appealed a decision of the insurer. 14-3 (c)(1) An insurer shall not, as a condition of a contract 14-4 with a physician or health care provider or in any other manner, 14-5 prohibit, attempt to prohibit, nor discourage a physician or 14-6 provider from: 14-7 (A) discussing with or communicating to a 14-8 current, prospective, or former patient, or a party designated by a 14-9 patient, information or opinions regarding that patient's health 14-10 care, including but not limited to the patient's medical condition 14-11 or treatment options; or 14-12 (B) discussing with or communicating in good 14-13 faith to a current, prospective, or former patient, or a party 14-14 designated by a patient, information or opinions regarding the 14-15 provisions, terms, requirements, or services of the health care 14-16 plan as they relate to the medical needs of the patient. 14-17 (2) An insurer shall not in any way penalize, 14-18 terminate, nor refuse to compensate for covered services a 14-19 physician or provider for discussing or communicating with a 14-20 current, prospective, or former patient, or a party designated by a 14-21 patient, pursuant to this section. 14-22 (d) An insurer shall not use any financial incentive or make 14-23 payment to a physician or health care provider which acts directly 14-24 or indirectly as an inducement to limit medically necessary 14-25 services. 15-1 Sec. 8. AVAILABILITY OF PREFERRED PROVIDERS. (a) Any 15-2 insurer offering a preferred provider benefit plan must ensure that 15-3 both preferred provider benefits and basic level benefits are 15-4 reasonably available to all insureds within a designated service 15-5 area. 15-6 (b) If services are not available through preferred 15-7 providers within the service area, nonpreferred providers shall be 15-8 reimbursed at the same percentage level of reimbursement as the 15-9 preferred providers would have been reimbursed had the insured been 15-10 treated by them. Nothing in this subsection requires reimbursement 15-11 at a preferred level of coverage solely because an insured resides 15-12 out of the service area and chooses to receive services from 15-13 providers other than preferred providers for the insured's own 15-14 convenience. 15-15 Sec. 9. RULEMAKING AUTHORITY. The commissioner shall adopt 15-16 rules as necessary to implement the provisions of this article and 15-17 to ensure reasonable accessibility and availability of preferred 15-18 provider and basic level benefits to Texas citizens. 15-19 SECTION 2. The requirements of Article 3.70-3C, Insurance 15-20 Code, as added by Section 1 of this Act, apply to any insurance 15-21 policy or contract issued, delivered, or renewed on or after the 15-22 effective date of this Act. 15-23 SECTION 3. The importance of this legislation and the 15-24 crowded condition of the calendars in both houses create an 15-25 emergency and an imperative public necessity that the 16-1 constitutional rule requiring bills to be read on three several 16-2 days in each house be suspended, and this rule is hereby suspended, 16-3 and that this Act take effect and be in force from and after its 16-4 passage, and it is so enacted.