By: Sibley, Nelson, Harris S.B. No. 385
Madla, Cain
A BILL TO BE ENTITLED
AN ACT
1-1 relating to the regulation of health maintenance organizations.
1-2 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-3 SECTION 1. Section 2, Texas Health Maintenance Organization
1-4 Act (Article 20A.02, Vernon's Texas Insurance Code), is amended to
1-5 read as follows:
1-6 Sec. 2. DEFINITIONS. For the purposes of this Act:
1-7 (a) "Adverse determination" means a determination by a
1-8 health maintenance organization or a utilization review agent that
1-9 the health care services furnished to a patient or proposed to be
1-10 furnished to a patient are not medically necessary or not
1-11 appropriate in the allocation of health care resources.
1-12 (b) "Basic health care services" means health care services
1-13 which the commissioner determines an enrolled population might
1-14 reasonably require in order to be maintained in good health,
1-15 including, at [as] a minimum, services designated as basic health
1-16 services under Section 1302, Title XIII, Public Health Service Act
1-17 (42 U.S.C. Section 300e-1(1)) [emergency care, inpatient hospital
1-18 and medical services, and outpatient medical services].
1-19 [(b) "Board" means the Texas Board of Health.]
1-20 (c) "Capitation" means a method of compensation to a
1-21 physician or provider based on a predetermined payment per enrollee
1-22 for a specified period of time for certain enrollees in exchange
1-23 for arranging for or providing a defined set of covered health care
2-1 services to such enrollees for a specified period of time,
2-2 regardless of the amount of services actually provided.
2-3 (d) "Commissioner" means the commissioner of insurance.
2-4 (e) "Complainant" means an enrollee, or a physician,
2-5 provider, or other person designated to act on behalf of an
2-6 enrollee, who files a complaint.
2-7 (f) "Complaint" means any dissatisfaction expressed by a
2-8 complainant orally or in writing to the health maintenance
2-9 organization with any aspect of the health maintenance
2-10 organization's operation, including but not limited to
2-11 dissatisfaction with plan administration; appeal of an adverse
2-12 determination; the denial, reduction, or termination of a service;
2-13 the way a service is provided; or disenrollment decisions,
2-14 expressed by a complainant. A complaint is not a misunderstanding
2-15 or a problem of misinformation that is resolved promptly by
2-16 clearing up the misunderstanding or supplying the appropriate
2-17 information to the satisfaction of the enrollee.
2-18 (g) "Emergency care" means health care services provided in
2-19 a hospital emergency facility or comparable facility to evaluate
2-20 and stabilize medical conditions of a recent onset and severity,
2-21 including but not limited to severe pain, that would lead a prudent
2-22 layperson, possessing an average knowledge of medicine and health,
2-23 to believe that his or her condition, sickness, or injury is of
2-24 such a nature that failure to get immediate medical care could
2-25 result in:
3-1 (1) placing the patient's health in serious jeopardy;
3-2 (2) serious impairment to bodily functions;
3-3 (3) serious dysfunction of any bodily organ or part;
3-4 (4) serious disfigurement; or
3-5 (5) in the case of a pregnant woman, serious jeopardy
3-6 to the health of the fetus.
3-7 (h) [(d)] "Enrollee" means an individual who is enrolled in
3-8 a health care plan, including covered dependents.
3-9 (i) [(e)] "Evidence of coverage" means any certificate,
3-10 agreement, or contract issued to an enrollee setting out the
3-11 coverage to which the enrollee is entitled.
3-12 (j) [(f)] "Group hospital service corporation" means a
3-13 nonprofit corporation organized and operating under Chapter 20 of
3-14 the Insurance Code.
3-15 (k) [(g)] "Health care" means prevention, maintenance,
3-16 rehabilitation, pharmaceutical, and chiropractic services provided
3-17 by qualified persons other than medical care.
3-18 (l) [(h)] "Health care plan" means any plan whereby any
3-19 person undertakes to provide, arrange for, pay for, or reimburse
3-20 any part of the cost of any health care services; provided,
3-21 however, a part of such plan consists of arranging for or the
3-22 provision of health care services, as distinguished from
3-23 indemnification against the cost of such service, on a prepaid
3-24 basis through insurance or otherwise.
3-25 (m) [(i)] "Health care services" means any services,
4-1 including the furnishing to any individual of pharmaceutical
4-2 services, medical, chiropractic, or dental care, or hospitalization
4-3 or incident to the furnishing of such services, care, or
4-4 hospitalization, as well as the furnishing to any person of any and
4-5 all other services for the purpose of preventing, alleviating,
4-6 curing or healing human illness or injury or a single health care
4-7 service plan.
4-8 (n) [(j)] "Health maintenance organization" means any person
4-9 who arranges for or provides a health care plan or a single health
4-10 care service plan to enrollees on a prepaid basis.
4-11 (o) "Life threatening" means a disease or condition for
4-12 which the likelihood of death is high unless the course of the
4-13 disease or condition is interrupted.
4-14 (p) [(k)] "Medical care" means furnishing those services
4-15 defined as practicing medicine under Section 1.03(8), Medical
4-16 Practice Act (Article 4495b, Vernon's Texas Civil Statutes).
4-17 (q) [(l)] "Person" means any natural or artificial person,
4-18 including, but not limited to, individuals, partnerships,
4-19 associations, organizations, trusts, hospital districts, limited
4-20 liability companies, limited liability partnerships, or
4-21 corporations.
4-22 (r) [(m)] "Physician" means:
4-23 (1) an individual licensed to practice medicine in
4-24 this state;
4-25 (2) a professional association organized under the
5-1 Texas Professional Association Act (Article 1528f, Vernon's Texas
5-2 Civil Statutes) or a nonprofit health corporation certified under
5-3 Section 5.01, Medical Practice Act (Article 4495b, Vernon's Texas
5-4 Civil Statutes); or
5-5 (3) another person wholly owned by physicians.
5-6 (s) "Prospective enrollee" means:
5-7 (1) in the case of an individual who is a member of a
5-8 group, an individual eligible for enrollment in a health
5-9 maintenance organization purchased through that individual's group;
5-10 or
5-11 (2) in the case of an individual who is not a member
5-12 of a group or whose group has not purchased or does not intend to
5-13 purchase a health maintenance organization plan, an individual who
5-14 has expressed an interest in purchasing individual health
5-15 maintenance organization coverage and who is eligible for coverage
5-16 by the health maintenance organization.
5-17 (t) [(n)] "Provider" means:
5-18 (1) any person other than a physician, including a
5-19 licensed doctor of chiropractic, registered nurse, pharmacist,
5-20 optometrist, pharmacy, hospital, or other institution or
5-21 organization or person that is licensed or otherwise authorized to
5-22 provide a health care service in this state;
5-23 (2) a person who is wholly owned or controlled by a
5-24 provider or by a group of providers who are licensed to provide the
5-25 same health care service; or
6-1 (3) a person who is wholly owned or controlled by one
6-2 or more hospitals and physicians, including a physician-hospital
6-3 organization.
6-4 (u) [(o)] "Sponsoring organization" means a person who
6-5 guarantees the uncovered expenses of the health maintenance
6-6 organization and who is financially capable, as determined by the
6-7 commissioner, of meeting the obligations resulting from those
6-8 guarantees.
6-9 (v) [(p)] "Uncovered expenses" means the estimated
6-10 administrative expenses and the estimated cost of health care
6-11 services that are not guaranteed, insured, or assumed by a person
6-12 other than the health maintenance organization. Health care
6-13 services may be considered covered if the physician or provider
6-14 agrees in writing that enrollees shall in no way be liable,
6-15 assessable, or in any way subject to payment for services except as
6-16 described in the evidence of coverage issued to the enrollee under
6-17 Section 9 of this Act. The amount due on loans in the next
6-18 calendar year will be considered uncovered expenses unless
6-19 specifically subordinated to uncovered medical and health care
6-20 expenses or unless guaranteed by the sponsoring organization.
6-21 (w) [(q)] "Uncovered liabilities" means obligations
6-22 resulting from unpaid uncovered expenses, the outstanding
6-23 indebtedness of loans that are not specifically subordinated to
6-24 uncovered medical and health care expenses or guaranteed by the
6-25 sponsoring organization, and all other monetary obligations that
7-1 are not similarly subordinated or guaranteed.
7-2 (x) [(r)] "Single health care service" means a health care
7-3 service that an enrolled population may reasonably require in order
7-4 to be maintained in good health with respect to a particular health
7-5 care need for the purpose of preventing, alleviating, curing, or
7-6 healing human illness or injury of a single specified nature and
7-7 that is to be provided by one or more persons each of whom is
7-8 licensed by the state to provide that specific health care service.
7-9 (y) [(s)] "Single health care service plan" means a plan
7-10 under which any person undertakes to provide, arrange for, pay for,
7-11 or reimburse any part of the cost of a single health care service,
7-12 provided, that a part of the plan consists of arranging for or the
7-13 provision of the single health care service, as distinguished from
7-14 an indemnification against the cost of that service, on a prepaid
7-15 basis through insurance or otherwise and that no part of that plan
7-16 consists of arranging for the provision of more than one health
7-17 care need of a single specified nature.
7-18 (z) [(t) "Emergency care" means bona fide emergency services
7-19 provided after the sudden onset of a medical condition manifesting
7-20 itself by acute symptoms of sufficient severity, including severe
7-21 pain, such that the absence of immediate medical attention could
7-22 reasonably be expected to result in:]
7-23 [(1) placing the patient's health in serious jeopardy;]
7-24 [(2) serious impairment to bodily functions; or]
7-25 [(3) serious dysfunction of any bodily organ or part.]
8-1 [(u)] "Health maintenance organization delivery network"
8-2 means a health care delivery system in which a health maintenance
8-3 organization arranges for health care services directly or
8-4 indirectly through contracts and subcontracts with providers and
8-5 physicians.
8-6 SECTION 2. Section 3, Texas Health Maintenance Organization
8-7 Act (Article 20A.03, Vernon's Texas Insurance Code), is amended by
8-8 adding Subsections (e), (f), and (g) to read as follows:
8-9 (e) No person or provider shall directly or indirectly
8-10 perform any of the acts of a health maintenance organization, as
8-11 defined in this Act, except as provided by and in accordance with
8-12 the specific authorization of this Act.
8-13 (f) Any person or provider who directly or indirectly
8-14 performs any of the acts of a health maintenance organization
8-15 without having first obtained a certificate of authority from the
8-16 Texas Department of Insurance shall be subject to all enforcement
8-17 processes and procedures of an authorized insurer pursuant to
8-18 Sections 3 and 3A, Article 1.14-1, Insurance Code.
8-19 (g) The commissioner shall have subpoena authority in
8-20 accordance with Article 1.19-1, Insurance Code.
8-21 SECTION 3. Section 4, Texas Health Maintenance Organization
8-22 Act (Article 20A.04, Vernon's Texas Insurance Code), is amended to
8-23 read as follows:
8-24 Sec. 4. APPLICATION FOR CERTIFICATE OF AUTHORITY. (a) Each
8-25 application for a certificate of authority shall be on a form
9-1 prescribed by rule of the commissioner and shall be verified by the
9-2 applicant, an officer, or other authorized representative of the
9-3 applicant, and shall set forth or be accompanied by the following:
9-4 (1) a copy of the basic organizational document, if
9-5 any, of the applicant, such as the articles of incorporation,
9-6 articles of association, partnership agreement, trust agreement, or
9-7 other applicable documents, and all amendments thereto;
9-8 (2) a copy of the bylaws, rules and regulations, or
9-9 similar document, if any, regulating the conduct of the internal
9-10 affairs of the applicant;
9-11 (3) a list of the names, addresses, and official
9-12 positions of the persons who are to be responsible for the conduct
9-13 of the affairs of the applicant, including all members of the board
9-14 of directors, board of trustees, executive committee, or other
9-15 governing body or committee, the principal officer in the case of a
9-16 corporation, and the partnership or members in the case of a
9-17 partnership or association;
9-18 (4) a copy of any independent or other contract made
9-19 or to be made between any provider, physician, or persons listed in
9-20 Paragraph (3) hereof and the applicant;
9-21 (5) a copy of the form of evidence of coverage to be
9-22 issued to the enrollee;
9-23 (6) a copy of the form of the group contract, if any,
9-24 which is to be issued to employers, unions, trustees, or other
9-25 organizations;
10-1 (7) a current financial statement that includes:
10-2 (A) the sources and application of funds;
10-3 (B) projected financial statements during the
10-4 initial period of operations;
10-5 (C) a balance sheet beginning as of the date of
10-6 the expected start of operations;
10-7 (D) a statement of revenue and expenses with
10-8 expected member months; and
10-9 (E) a cash flow statement that states any
10-10 capital expenditures, purchase and sale of investments, and
10-11 deposits with the state;
10-12 (8) the schedule of charges to be used during the
10-13 first 12 months of operation;
10-14 (9) a statement acknowledging that all lawful process
10-15 in any legal action or proceeding against the health maintenance
10-16 organization on a cause of action arising in this state is valid if
10-17 served in accordance with Article 1.36, Insurance Code;
10-18 (10) a statement reasonably describing the geographic
10-19 area or areas to be served;
10-20 (11) a description of the complaint procedures to be
10-21 utilized;
10-22 (12) a description of the procedures and programs to
10-23 be implemented to meet the quality of health care requirements set
10-24 forth herein; [and]
10-25 (13) a written description of health care plan terms
11-1 and conditions made available to any current or prospective group
11-2 contract holder or current or prospective enrollee of the health
11-3 maintenance organization pursuant to the requirements of Section 11
11-4 of this Act;
11-5 (14) network configuration information, including an
11-6 explanation of the adequacy of the physician and other provider
11-7 network configuration; the information provided must include the
11-8 names of physicians, specialty physicians, and other providers by
11-9 zip code or zip code map and indicate whether each physician or
11-10 other provider is accepting new patients from the health
11-11 maintenance organization;
11-12 (15) a written description of the types of
11-13 compensation arrangements, such as compensation based on
11-14 fee-for-service arrangements, risk-sharing arrangements, or
11-15 capitated risk arrangements, made or to be made with physicians and
11-16 providers in exchange for the provision of or an arrangement to
11-17 provide health care services to enrollees, including any financial
11-18 incentives for physicians and providers; such compensation
11-19 arrangements shall be confidential and not subject to the open
11-20 records law, Chapter 552, Government Code;
11-21 (16) documentation demonstrating that the health
11-22 maintenance organization will pay for emergency care services
11-23 performed by nonnetwork physicians or providers at the negotiated
11-24 or usual and customary rate and that the health care plan contains,
11-25 without regard to whether the physician or provider furnishing the
12-1 services has a contractual or other arrangement with the entity to
12-2 provide items or services to covered individuals, the following
12-3 provisions and procedures for coverage of emergency care services:
12-4 (A) any medical screening examination or other
12-5 evaluation required by state or federal law that is necessary to
12-6 determine whether an emergency medical condition exists will be
12-7 provided to covered enrollees in a hospital emergency facility or
12-8 comparable facility;
12-9 (B) necessary emergency care services will be
12-10 provided to covered enrollees, including the treatment and
12-11 stabilization of an emergency medical condition; and
12-12 (C) services originated in a hospital emergency
12-13 facility or comparable facility following treatment or
12-14 stabilization of an emergency medical condition will be provided to
12-15 covered enrollees as approved by the health maintenance
12-16 organization, provided that the health maintenance organization is
12-17 required to approve or deny coverage of poststabilization care as
12-18 requested by a treating physician or provider within the time
12-19 appropriate to the circumstances relating to the delivery of the
12-20 services and the condition of the patient, but in no case to exceed
12-21 one hour from the time of the request; the health maintenance
12-22 organization must respond to inquiries from the treating physician
12-23 or provider in compliance with this provision in the health
12-24 maintenance organization's plan; and
12-25 (17) such other information as the commissioner may
13-1 require to make the determinations required by this Act.
13-2 (b) The commissioner [State Board of Insurance] may
13-3 promulgate such reasonable rules and regulations as the
13-4 commissioner [it] deems necessary to the proper administration of
13-5 this Act to require a health maintenance organization, subsequent
13-6 to receiving its certificate of authority, to submit the
13-7 modifications or amendments to the operations or documents
13-8 described in Subsection (a) of this section to the commissioner,
13-9 either for his approval or for information only, prior to the
13-10 effectuation of the modification or amendment or to require the
13-11 health maintenance organization to indicate the modifications to
13-12 [both the board and] the commissioner at the time of the next site
13-13 visit or examination. As soon as reasonably possible after any
13-14 filing for approval required by this subsection is made, the
13-15 commissioner shall in writing approve or disapprove it. Any
13-16 modification or amendment for which the commissioner's approval is
13-17 required shall be considered approved unless disapproved within 30
13-18 days; provided that the commissioner may postpone the action for
13-19 such further time, not exceeding an additional 30 days, as
13-20 necessary for proper consideration.
13-21 SECTION 4. Section 5, Texas Health Maintenance Organization
13-22 Act (Article 20A.05, Vernon's Texas Insurance Code), is amended to
13-23 read as follows:
13-24 Sec. 5. ISSUANCE OF CERTIFICATE OF AUTHORITY. (a)[(1) Upon
13-25 receipt of an application for issuance of a certificate of
14-1 authority, the commissioner shall begin consideration of the
14-2 application and forthwith transmit copies of such application and
14-3 accompanying documents to the board.]
14-4 [(2) The board shall determine whether the applicant
14-5 for a certificate of authority, with respect to health care
14-6 services to be furnished:]
14-7 [(A) has demonstrated the willingness and
14-8 potential ability to assure that such health care services will be
14-9 provided in a manner to assure both availability and accessibility
14-10 of adequate personnel and facilities, in a manner enhancing
14-11 availability, accessibility, and continuity of services;]
14-12 [(B) has arrangements, established in accordance
14-13 with rules and regulations promulgated by the board with the
14-14 concurrence of the commissioner, for an ongoing quality of health
14-15 care assurance program concerning health care processes and
14-16 outcome; and]
14-17 [(C) has a procedure, established by rules and
14-18 regulations of the board with the concurrence of the commissioner,
14-19 to develop, compile, evaluate, and report statistics relating to
14-20 the cost of operation, the pattern of utilization of its services,
14-21 availability and accessibility of its services.]
14-22 [(3) Within 45 days of receipt of the application by
14-23 the board for issuance of a certificate of authority, the board
14-24 shall certify to the commissioner whether the proposed health
14-25 maintenance organization meets the requirements of this section.
15-1 If the board certifies that the health maintenance organization
15-2 does not meet such requirements, it shall specify in what respects
15-3 it is deficient.]
15-4 [(b)] The commissioner shall, after notice and hearing,
15-5 issue or deny a certificate of authority to any person filing an
15-6 application pursuant to Section 4 of this Act, within 75 days of
15-7 the receipt of a completed application [the certification of the
15-8 board]; provided, however, that if notice and the opportunity for a
15-9 hearing is involved in a particular issuance or denial, then the
15-10 matter must be scheduled for a hearing within 75 days of the
15-11 receipt of a completed application. In any event, the commissioner
15-12 may grant a delay of final action on the application to an
15-13 applicant. Issuance of the certificate of authority shall be
15-14 granted upon payment of the application fee prescribed in Section
15-15 32 of this Act if the commissioner is satisfied that:
15-16 (1) the applicant for a certificate of authority, with
15-17 respect to health care services to be furnished:
15-18 (A) has demonstrated the willingness and
15-19 potential ability to assure that such health care services will be
15-20 provided in a manner to assure both availability and accessibility
15-21 of adequate personnel and facilities, in a manner enhancing
15-22 availability, accessibility, quality of care, and continuity of
15-23 services;
15-24 (B) has arrangements, established in accordance
15-25 with rules and regulations promulgated by the commissioner, for an
16-1 ongoing quality of health care assurance program concerning health
16-2 care processes and outcome; and
16-3 (C) has a procedure, established by rules and
16-4 regulations of the commissioner to develop, compile, evaluate, and
16-5 report statistics relating to the cost of operation, the pattern of
16-6 utilization of its services, and availability and accessibility of
16-7 its services; [board certifies that the health maintenance
16-8 organization's proposed plan of operation meets the requirements of
16-9 Subsection (a)(2) of this section; and]
16-10 (2) [the commissioner is satisfied that:]
16-11 [(A)] the person responsible for the conduct of
16-12 the affairs of the applicant is competent, trustworthy, and
16-13 possesses a good reputation;
16-14 (3) [(B)] the health care plan or single health care
16-15 service plan constitutes an appropriate mechanism whereby the
16-16 health maintenance organization will effectively provide or arrange
16-17 for the provision of basic health care services or single health
16-18 care service on a prepaid basis, through insurance or otherwise,
16-19 except to the extent of reasonable requirements for co-payment;
16-20 (4) [(C)] the health maintenance organization is fully
16-21 responsible and may reasonably be expected to meet its obligations
16-22 to enrollees and prospective enrollees. In making this
16-23 determination, the commissioner shall consider:
16-24 (A) [(i)] the financial soundness of the health
16-25 care plan's arrangement for health care services and a schedule of
17-1 charges used in connection therewith;
17-2 (B) [(ii)] the adequacy of working capital;
17-3 (C) [(iii)] any agreement with an insurer, group
17-4 hospital service corporation, a political subdivision of
17-5 government, or any other organization for insuring the payment of
17-6 the cost of health care services or the provision for automatic
17-7 applicability of an alternative coverage in the event of
17-8 discontinuance of plan;
17-9 (D) [(iv)] any agreement which provides for the
17-10 provision of health care services; and
17-11 (E) [(v)] any deposit of cash or securities
17-12 submitted in accordance with Section 13 of this Act as a guarantee
17-13 that the obligations will be duly performed; and
17-14 (5) [(D)] nothing in the proposed method of operation,
17-15 as shown by the information submitted pursuant to Section 4 of this
17-16 Act, or by independent investigation, is contrary to Texas law.
17-17 (b) [(c)] If [the board or] the commissioner[, or both,]
17-18 shall certify that the health maintenance organization's proposed
17-19 plan of operation does not meet the requirements of this section,
17-20 the commissioner shall not issue the certificate of authority. The
17-21 commissioner shall notify the applicant that it is deficient[,] and
17-22 shall specify in what respects it is deficient.
17-23 (c) [(d)] A certificate of authority shall continue in force
17-24 as long as the person to whom it is issued meets the requirements
17-25 of this Act or until suspended or revoked by the commissioner or
18-1 terminated at the request of the certificate holder. Any change in
18-2 control, as defined by Article 21.49--1 of the Insurance Code of
18-3 Texas, of the health maintenance organization, shall be subject to
18-4 the approval of the commissioner.
18-5 SECTION 5. Section 9, Texas Health Maintenance Organization
18-6 Act (Article 20A.09, Vernon's Texas Insurance Code), as amended by
18-7 Chapters 1091 and 1096, Acts of the 70th Legislature, Regular
18-8 Session, 1987, is amended to read as follows:
18-9 Sec. 9. EVIDENCE OF COVERAGE AND CHARGES. (a)(1) Every
18-10 enrollee residing in this state is entitled to evidence of coverage
18-11 under a health care plan. If the enrollee obtains coverage under a
18-12 health care plan through an insurance policy or a contract issued
18-13 by a group hospital service corporation, whether by option or
18-14 otherwise, the insurer or the group hospital service corporation
18-15 shall issue the evidence of coverage. Otherwise, the health
18-16 maintenance organization shall issue the evidence of coverage.
18-17 (2) No evidence of coverage, or amendment thereto,
18-18 shall be issued or delivered to any person in this state until a
18-19 copy of the form of evidence of coverage, or amendment thereto, has
18-20 been filed with and approved by the commissioner.
18-21 (3) An evidence of coverage shall contain:
18-22 (A) no provisions or statements which are
18-23 unjust, unfair, inequitable, misleading, deceptive, which encourage
18-24 misrepresentation, or which are untrue, misleading, or deceptive as
18-25 defined in Section 14 of this Act; [and]
19-1 (B) a clear and complete statement, if a
19-2 contract, or a reasonably complete facsimile, if a certificate, of:
19-3 (i) the medical, health care services, or
19-4 single health care service and the issuance of other benefits, if
19-5 any, to which the enrollee is entitled under the health care plan
19-6 or single health care service plan;
19-7 (ii) any limitation on the services, kinds
19-8 of services, benefits, or kinds of benefits to be provided,
19-9 including any deductible or co-payment feature;
19-10 (iii) where and in what manner information
19-11 is available as to how services may be obtained; and
19-12 (iv) a clear and understandable
19-13 description of the health maintenance organization's methods for
19-14 resolving enrollee complaints. Any subsequent changes may be
19-15 evidenced in a separate document issued to the enrollee;
19-16 (C) a provision that, if medically necessary
19-17 covered services are not available through network physicians or
19-18 providers, the health maintenance organization must, on the request
19-19 of a network physician or provider, within a reasonable time period
19-20 allow referral to a nonnetwork physician or provider and shall
19-21 fully reimburse the nonnetwork physician or provider at the usual
19-22 and customary or an agreed rate; each contract must further provide
19-23 for a review by a specialist of the same, or a similar, specialty
19-24 as the physician or provider to whom a referral is requested before
19-25 the health maintenance organization may deny a referral;
20-1 (D) a provision to allow enrollees with chronic,
20-2 disabling, or life-threatening illnesses to apply to the health
20-3 maintenance organization's medical director to utilize a nonprimary
20-4 care physician specialist as a primary care physician, provided
20-5 that:
20-6 (i) the request includes information
20-7 specified by the health maintenance organization, including but not
20-8 limited to certification of medical need, and is signed by the
20-9 enrollee and the nonprimary care physician specialist interested in
20-10 serving as the primary care physician;
20-11 (ii) the nonprimary care physician
20-12 specialist meets the health maintenance organization's requirements
20-13 for primary care physician participation; and
20-14 (iii) the nonprimary care physician
20-15 specialist is willing to accept the coordination of all of the
20-16 enrollee's health care needs;
20-17 (E) a provision that if the request for special
20-18 consideration specified in Paragraph (D) of this subdivision is
20-19 denied, an enrollee may appeal the decision through the health
20-20 maintenance organization's established complaint and appeals
20-21 process; and
20-22 (F) a provision that the effective date of the
20-23 new designation of a nonprimary care physician specialist as set
20-24 out in Paragraph (D) of this subdivision shall not be retroactive;
20-25 the health maintenance organization may not reduce the amount of
21-1 compensation owed to the original primary care physician prior to
21-2 the date of the new designation.
21-3 (4) Any form of the evidence of coverage or group
21-4 contract to be used in this state, and any amendments thereto, are
21-5 subject to the filing and approval requirements of Subsection (c)
21-6 of this section, unless it is subject to the jurisdiction of the
21-7 commissioner under the laws governing health insurance or group
21-8 hospital service corporations, in which event the filing and
21-9 approval provisions of such law shall apply. To the extent,
21-10 however, that such provisions do not apply to the requirements of
21-11 Subdivision (3)[, Subsection (a)] of this subsection [section], the
21-12 requirements of Subdivision (3) shall be applicable.
21-13 (b) The formula or method for calculating the schedule of
21-14 charges for enrollee coverage for medical services or health care
21-15 services must be filed with the commissioner before it is used in
21-16 conjunction with any health care plan. The formula or method must
21-17 be established in accordance with actuarial principles for the
21-18 various categories of enrollees. The charges resulting from the
21-19 application of the formula or method may not be altered for an
21-20 individual enrollee based on the status of that enrollee's health.
21-21 The formula or method must produce charges that are not excessive,
21-22 inadequate, or unfairly discriminatory, and benefits must be
21-23 reasonable with respect to the rates produced by the formula or
21-24 method. A statement by a qualified actuary that certifies the
21-25 appropriateness of the formula or method must accompany the filing
22-1 together with supporting information considered adequate by the
22-2 commissioner.
22-3 (c) The commissioner shall, within a reasonable period,
22-4 approve any form of the evidence of coverage or group contract, or
22-5 amendment thereto, if the requirements of this section are met.
22-6 After notice and opportunity for hearing, the commissioner may
22-7 withdraw previous approval of any form, if the commissioner
22-8 determines that it violates or does not comply with this Act or a
22-9 rule adopted by the commissioner [State Board of Insurance]. It
22-10 shall be unlawful to issue such form until approved. If the
22-11 commissioner disapproves such form, the commissioner shall notify
22-12 the filer. In the notice, the commissioner shall specify the
22-13 reason for the disapproval. A hearing shall be granted within 30
22-14 days after a request in writing by the person filing. If the
22-15 commissioner does not disapprove any form within 30 days after the
22-16 filing of such form it shall be considered approved; provided that
22-17 the commissioner may by written notice extend the period for
22-18 approval or disapproval of any filing for such further time, not
22-19 exceeding an additional 30 days, as necessary for proper
22-20 consideration of the filing.
22-21 (d) The commissioner may require the submission of whatever
22-22 relevant information he or she deems necessary in determining
22-23 whether to approve or disapprove a filing made pursuant to this
22-24 section.
22-25 (e) Article 3.74 of the Texas Insurance Code applies to
23-1 health maintenance organizations other than those health
23-2 maintenance organizations offering only a single health care
23-3 service plan.
23-4 (f) Article 3.51-9 of the Texas Insurance Code applies to
23-5 health maintenance organizations other than those health
23-6 maintenance organizations offering only a single health care
23-7 service plan.
23-8 (g) Evidence of coverage does not constitute a health
23-9 insurance policy as that term is defined by the Insurance Code.
23-10 (h) Article 3.70-1(F)(5) of the Insurance Code applies to
23-11 health maintenance organizations other than those health
23-12 maintenance organizations offering only a single health care
23-13 service plan.
23-14 (i) [(h)] Article 3.72 of the Insurance Code applies to
23-15 health maintenance organizations to the extent that such article is
23-16 not in conflict with this Act and to the extent that the
23-17 residential treatment center or crisis stabilization unit is
23-18 located within the service area of the health maintenance
23-19 organization and subject to such inspection and review as required
23-20 by this Act or the rules hereunder.
23-21 (j) [(i)] A health maintenance organization shall comply
23-22 with Article 21.55 of the Insurance Code with respect to prompt
23-23 payment to enrollees [this code applies to out-of-area or emergency
23-24 claims for which benefits are not assigned or payment is not made
23-25 directly to the physician or provider]. A health maintenance
24-1 organization shall make payment to a physician or provider for
24-2 covered services rendered to enrollees of the health maintenance
24-3 organization not later than the 45th day after the date a claim for
24-4 payment is received with documentation reasonably necessary for the
24-5 health maintenance organization to process the claim or within the
24-6 time period specified by written agreement between the physician or
24-7 provider and the health maintenance organization. For purposes of
24-8 this subsection, "covered services" means health care services and
24-9 benefits to which enrollees are entitled under the terms of an
24-10 applicable evidence of coverage.
24-11 (k) [(j)] A health maintenance organization may provide
24-12 benefits under a health care plan to a dependent grandchild of an
24-13 enrollee when the dependent grandchild is less than 21 years old
24-14 and living with and in the household of the enrollee.
24-15 (l) A health maintenance organization that offers a basic
24-16 health care plan shall provide or arrange for the provision of
24-17 basic health care services to its enrollees as needed and without
24-18 limitations as to time and cost other than limitations prescribed
24-19 by rule of the commissioner.
24-20 (m) Nothing in this Act shall require a health maintenance
24-21 organization, physician, or provider to recommend, offer advice
24-22 concerning, pay for, provide, assist in, perform, arrange, or
24-23 participate in providing or performing any health care service that
24-24 violates its religious convictions. A health maintenance
24-25 organization that limits or denies health care services under this
25-1 subsection shall set forth such limitations in the evidence of
25-2 coverage as required by Section 9(a)(3) of this Act.
25-3 (n) The commissioner may adopt minimum standards relating to
25-4 basic health care services.
25-5 SECTION 6. Section 11, Texas Health Maintenance Organization
25-6 Act (Article 20A.11, Vernon's Texas Insurance Code), is amended to
25-7 read as follows:
25-8 Sec. 11. INFORMATION TO PROSPECTIVE AND CURRENT GROUP
25-9 CONTRACT HOLDERS AND ENROLLEES. (a) Each plan application form
25-10 shall prominently include a space in which the enrollee at the time
25-11 of application or enrollment shall make a selection of a primary
25-12 care physician or primary care provider. An enrollee shall at all
25-13 times have the right to select or change a primary care physician
25-14 or primary care provider within the health maintenance organization
25-15 network of available primary care physicians and primary care
25-16 providers. However, a health maintenance organization may limit
25-17 an enrollee's request to change physicians or providers to no more
25-18 than four changes in any 12-month period.
25-19 (b) A health maintenance organization shall provide on
25-20 request an accurate written description of health care plan terms
25-21 and conditions, as referenced in Section 4(a)(13) of this Act, to
25-22 allow any current or prospective group contract holder and current
25-23 or prospective enrollee eligible for enrollment in a health care
25-24 plan to make comparisons and informed decisions before selecting
25-25 among health care plans. The written description must be in a
26-1 readable and understandable format as prescribed by the
26-2 commissioner and shall include a current list of physicians and
26-3 providers. The health maintenance organization may provide its
26-4 handbook to satisfy this requirement provided the handbook's
26-5 content is substantially similar to and achieves the same level of
26-6 disclosure as the written description prescribed by the
26-7 commissioner and the current list of physicians and providers is
26-8 also provided.
26-9 (c) A health maintenance organization shall notify a group
26-10 contract holder within 30 days of any substantive changes to the
26-11 payment arrangements between the health maintenance organization
26-12 and health care physicians or providers.
26-13 (d) No health maintenance organization, or representative
26-14 thereof, may cause or knowingly permit the use or distribution of
26-15 prospective enrollee information which is untrue or misleading.
26-16 (e) Every health maintenance organization shall provide to
26-17 its enrollees reasonable notice of any material adverse change in
26-18 the operation of the organization that will affect them directly.
26-19 SECTION 7. The Texas Health Maintenance Organization Act
26-20 (Chapter 20A, Vernon's Texas Insurance Code) is amended by adding
26-21 Section 11A to read as follows:
26-22 Sec. 11A. ACCESS TO CERTAIN INFORMATION. (a) Each health
26-23 maintenance organization or approved nonprofit health corporation
26-24 certified under Section 5.01(a), Medical Practice Act (Article
26-25 4495b, Vernon's Texas Civil Statutes), and holding a certificate of
27-1 authority issued by the commissioner shall establish procedures to
27-2 provide to an enrollee a member handbook and materials relating to
27-3 the complaint and appeals process in the languages of the major
27-4 populations of the enrolled population. A major population is
27-5 defined as a group comprising 10 percent or more of the health
27-6 maintenance organization's enrolled population.
27-7 (b) Each health maintenance organization and approved
27-8 nonprofit health corporation shall establish procedures to provide
27-9 access to a member handbook and the complaint and appeals process
27-10 to an enrollee who has a disability affecting the enrollee's
27-11 ability to communicate or to read.
27-12 SECTION 8. Section 12, Texas Health Maintenance Organization
27-13 Act (Article 20A.12, Vernon's Texas Insurance Code), is amended to
27-14 read as follows:
27-15 Sec. 12. COMPLAINT AND APPEAL SYSTEM. (a) Every health
27-16 maintenance organization shall establish and maintain an internal
27-17 system for the resolution of complaints, including a process for
27-18 the notice and appeal of complaints. The commissioner may
27-19 promulgate such reasonable rules and regulations as are necessary
27-20 or proper to implement and administer this section [a complaint
27-21 system to provide reasonable procedures for the resolution of
27-22 written complaints initiated by enrollees concerning health care
27-23 services].
27-24 (b)(1) A system for the resolution of complaints shall be
27-25 implemented and maintained by a health maintenance organization as
28-1 provided under this subsection.
28-2 (2) If a complainant notifies the health maintenance
28-3 organization orally or in writing of a complaint, the health
28-4 maintenance organization shall, not later than the fifth business
28-5 day after the date after receipt of the complaint, send to the
28-6 complainant an acknowledgment letter and a one-page complaint form
28-7 in accordance with the following:
28-8 (A) the acknowledgment letter must include the
28-9 date of the health maintenance organization's receipt of the
28-10 complaint, a description of the complaint procedures and time
28-11 frames necessary for the resolution of the complaint, a statement
28-12 that the complaint form must be returned to the health maintenance
28-13 organization for prompt resolution of the complaint, and a request
28-14 for additional information needed, if applicable, for resolution of
28-15 the complaint; and
28-16 (B) the one-page complaint form must prominently
28-17 and clearly state that the complaint form must be returned to the
28-18 health maintenance organization for prompt resolution of the
28-19 complaint.
28-20 (3) The health maintenance organization shall
28-21 investigate each oral and written complaint received in accordance
28-22 with its own policies and in compliance with this Act.
28-23 (4) The total time for acknowledgment, investigation,
28-24 and resolution of the complaint by the health maintenance
28-25 organization shall not exceed 30 calendar days after the date the
29-1 health maintenance organization receives the one-page complaint
29-2 form from the complainant. The health maintenance organization may
29-3 extend the time for resolution of the complaint for up to an
29-4 additional 14 calendar days provided the health maintenance
29-5 organization demonstrates in writing to the complainant, within the
29-6 original 30 days, that the cause for delay is beyond the health
29-7 maintenance organization's control. The health maintenance
29-8 organization shall include a written progress report regarding the
29-9 status of the complaint. The complainant and the health
29-10 maintenance organization may agree to a further extension in
29-11 writing.
29-12 (5) Subdivisions (2) and (4) of this subsection do not
29-13 apply to complaints concerning emergencies or denials of continued
29-14 stays for hospitalization. Investigation and resolution of
29-15 complaints concerning emergencies or denials of continued stays for
29-16 hospitalization shall be concluded in accordance with the medical
29-17 or dental immediacy of the case and shall not exceed 72 hours from
29-18 receipt of the complaint.
29-19 (6) After the health maintenance organization has
29-20 investigated the complaint, the health maintenance organization
29-21 shall issue a response letter to the complainant explaining the
29-22 health maintenance organization's resolution of the complaint
29-23 within the time frames set forth in Subdivision (4) of this
29-24 subsection. The letter shall include a statement of the specific
29-25 medical and contractual reasons for the resolution and the
30-1 specialization of any physician or other provider consulted. If
30-2 the resolution is to deny services based on an adverse
30-3 determination of medical necessity, the clinical basis used to
30-4 reach that decision shall be enclosed. The response letter shall
30-5 contain a full description of the process for appeal, including the
30-6 time frames for the appeals process and the time frames for the
30-7 final decision on the appeal and shall prominently and clearly
30-8 explain the procedure for making a complaint to the department in a
30-9 manner prescribed by the commissioner.
30-10 (c)(1) In the event the complaint is not resolved to the
30-11 satisfaction of the complainant, the health maintenance
30-12 organization shall provide an appeals process which shall include
30-13 the right of the complainant either to appear in person before a
30-14 complaint appeal panel within the enrollee's county of residence or
30-15 the county where the enrollee normally receives health care
30-16 services, unless another site is agreed to by the complainant, or
30-17 to address a written appeal to the complaint appeal panel. The
30-18 health maintenance organization shall make a good faith effort to
30-19 meet the enrollee's needs in selecting the site and shall complete
30-20 the appeals process under this section within 30 calendar days
30-21 after the date of the receipt of the request for appeal.
30-22 (2) The health maintenance organization shall send to
30-23 the complainant within five working days after the date of receipt
30-24 of the request for appeal an acknowledgment letter which includes:
30-25 (A) the date of the health maintenance
31-1 organization's receipt of the oral or written request for appeal;
31-2 (B) the date and location of the hearing before
31-3 the complaint appeal panel;
31-4 (C) the right of the complainant to appear in
31-5 person, or through a representative if the enrollee is a minor or
31-6 disabled, before the complaint appeal panel; the complainant shall
31-7 be allowed to bring any person to the complaint appeal panel
31-8 meeting; however, the ability of those persons to directly question
31-9 the participants in the meeting may be limited by the health
31-10 maintenance organization's policy; the term "in person" means a
31-11 face-to-face meeting with all the members of the complaint appeal
31-12 panel unless otherwise agreed to by the complainant; and
31-13 (D) the right of the complainant to present
31-14 written or oral information and alternative expert testimony and to
31-15 question the persons responsible for making the prior determination
31-16 which resulted in the appeal.
31-17 (3) The health maintenance organization shall appoint
31-18 members to the complaint appeal panel which shall advise the health
31-19 maintenance organization on the resolution of the dispute. The
31-20 complaint appeal panel shall be composed of equal numbers of health
31-21 maintenance organization staff, physicians or other providers, and
31-22 enrollees. No member of the complaint appeal panel shall have been
31-23 previously involved in the disputed decision. The physicians or
31-24 other providers shall have experience in the area of care that is
31-25 in dispute and must be independent of any physician or provider who
32-1 made the prior determinations. If specialty care is in dispute,
32-2 the appeal panel must include an additional person who is a
32-3 specialist in the field of care to which the appeal relates. The
32-4 enrollees shall not be employees of the health maintenance
32-5 organization.
32-6 (4) Not less than five working days before the meeting
32-7 of the panel, unless the complainant agrees otherwise, the health
32-8 maintenance organization shall provide to the complainant or the
32-9 complainant's designated representative any documentation to be
32-10 presented to the panel by the health maintenance organization
32-11 staff, the specialization of any physicians or providers consulted
32-12 during the investigation, and the name and affiliation of all
32-13 health maintenance organization representatives on the panel. The
32-14 complainant or designated representative may respond to the
32-15 documentation provided either in person or in writing and the
32-16 complaint appeal panel must consider the response in its
32-17 deliberations if received prior to or during the hearing.
32-18 (5) The complainant or the designated representative,
32-19 as provided by Subdivision (2)(C) of this subsection, shall have
32-20 the right to appear in person before the complaint appeal panel, to
32-21 present alternative expert testimony, and to request the presence
32-22 of and question any person responsible for making the prior
32-23 determination which resulted in the appeal.
32-24 (6) Notice of the final decision of the health
32-25 maintenance organization on the appeal shall include a written
33-1 statement of the specific medical determination, clinical basis,
33-2 and contractual criteria used to reach the final decision. The
33-3 notice shall also prominently and clearly state the procedure for
33-4 making a complaint to the department in a manner prescribed by the
33-5 commissioner.
33-6 (7) Investigation and resolution of appeals relating
33-7 to poststabilization care following an emergency condition or
33-8 denials of continued stays for hospitalization shall be concluded
33-9 in accordance with the medical or dental immediacy of the case but
33-10 in no event to exceed 72 hours from the complainant's request for
33-11 appeal. At the request of the complainant or designated
33-12 representative, the health maintenance organization shall provide,
33-13 in lieu of a complaint appeal panel, a review by a physician or
33-14 provider who has not previously reviewed the case and is of the
33-15 same or similar specialty as typically manages the medical
33-16 condition, procedure, or treatment under discussion for review of
33-17 the appeal. The physician or provider reviewing the appeal may
33-18 interview the complainant or the complainant's designated
33-19 representative and shall render a final decision on the appeal.
33-20 Initial notice of the decision may be delivered orally if followed
33-21 by written notice of the determination within three days.
33-22 (d) The health maintenance organization shall maintain a
33-23 record of any complaint or appeal, any complaint or appeal
33-24 proceeding, and any actions taken on a complaint or appeal for a
33-25 period of three years from the date of the receipt of the complaint
34-1 or appeal.
34-2 (e) The commissioner [or board] may examine the [such]
34-3 complaint system and documentation maintained under Subsection (d)
34-4 of this section for compliance with this Act and may require the
34-5 health maintenance organization to make corrections deemed
34-6 necessary by the commissioner.
34-7 (f) If any provision of Article 21.58A, Insurance Code,
34-8 conflicts with any provision of this section, the provisions of
34-9 this section shall prevail.
34-10 SECTION 9. The Texas Health Maintenance Organization Act
34-11 (Article 20A.01 et seq., Vernon's Texas Insurance Code), is amended
34-12 by adding Section 12A to read as follows:
34-13 Sec. 12A. FILING COMPLAINTS WITH THE TEXAS DEPARTMENT OF
34-14 INSURANCE. (a) Any person, including persons who have attempted
34-15 to resolve complaints through the health maintenance organization's
34-16 complaint system process who are dissatisfied with the resolution,
34-17 may report an alleged violation of this Act to the Texas Department
34-18 of Insurance.
34-19 (b) The commissioner shall investigate a complaint against a
34-20 health maintenance organization to determine compliance with this
34-21 Act within 60 days after the Texas Department of Insurance's
34-22 receipt of the complaint and all information necessary for the
34-23 department to determine compliance. The commissioner may extend
34-24 the time necessary to complete an investigation in the event any of
34-25 the following circumstances occur:
35-1 (1) additional information is needed;
35-2 (2) an on-site review is necessary;
35-3 (3) the health maintenance organization, the physician
35-4 or provider, or the complainant does not provide all documentation
35-5 necessary to complete the investigation; or
35-6 (4) other circumstances beyond the control of the
35-7 department occur.
35-8 SECTION 10. Subsections (a), (b), (c), (f), (g), and (h),
35-9 Section 13, Texas Health Maintenance Organization Act (Article
35-10 20A.13, Vernon's Texas Insurance Code), are amended to read as
35-11 follows:
35-12 (a) Unless otherwise provided by this section, each health
35-13 maintenance organization shall deposit with the comptroller [State
35-14 Treasurer] cash or securities, or any combination of these or other
35-15 guarantees that are acceptable to the commissioner [State Board of
35-16 Insurance], in an amount as set forth in this section.
35-17 (b) For a health maintenance organization which has not
35-18 received a certificate of authority from the State Board of
35-19 Insurance or the commissioner prior to September 1, 1987:
35-20 (1) the amount of the initial deposit or other
35-21 guarantee shall be $100,000 for an organization offering basic
35-22 health care services and $50,000 for an organization offering a
35-23 single health care service plan;
35-24 (2) on or before March 15 of the year following the
35-25 year in which the health maintenance organization receives a
36-1 certificate of authority, it shall deposit with the comptroller
36-2 [State Treasurer] an amount equal to the difference between the
36-3 initial deposit and 100 percent of its estimated uncovered health
36-4 care expenses for the first 12 months of operation;
36-5 (3) on or before March 15 of each subsequent year, it
36-6 shall deposit the difference between its total uncovered health
36-7 care expenses based on its annual statement from the previous year
36-8 and the total amount previously deposited and not withdrawn from
36-9 the State Treasury; and
36-10 (4) in any year in which the amount determined in
36-11 accordance with Subdivision (3) of this subsection is zero or less
36-12 than zero, the commissioner [State Board of Insurance] may not
36-13 require the health maintenance organization to make any additional
36-14 deposit under this subsection.
36-15 (c) For a health maintenance organization which has received
36-16 a certificate of authority from the State Board of Insurance prior
36-17 to September 1, 1987:
36-18 (1) on or before March 15, 1988, the organization
36-19 shall deposit an amount equal to the sum of:
36-20 (A) $100,000 for an organization offering basic
36-21 health care services or $50,000 for an organization offering a
36-22 single health care service plan; and
36-23 (B) 100 percent of the uncovered health care
36-24 expenses for the preceding 12 months of operation;
36-25 (2) on or before March 15 of each subsequent year, the
37-1 organization shall make additional deposits of the difference
37-2 between its total uncovered health care expenses based on its
37-3 annual statement from the previous year and the total amount
37-4 previously deposited and not withdrawn from the State Treasury; and
37-5 (3) in any year in which the amount determined in
37-6 accordance with Subdivision (2) of this subsection is zero or less
37-7 than zero, the commissioner [State Board of Insurance] may not
37-8 require the health maintenance organization to make any additional
37-9 deposit under this subsection.
37-10 (f) Upon application by a health maintenance organization
37-11 operating for more than one year under a certificate of authority
37-12 issued by the State Board of Insurance or the commissioner, the
37-13 commissioner [State Board of Insurance] may waive some or all of
37-14 the requirements of Subsection (b) or (c) of this section for any
37-15 period of time it shall deem proper whenever it finds that one or
37-16 more of the following conditions justifies such waiver:
37-17 (1) the total amount of the deposit or other guarantee
37-18 is equal to 25 percent of the health maintenance organization's
37-19 estimated uncovered expenses for the next calendar year;
37-20 (2) the health maintenance organization's net worth is
37-21 equal to at least 25 percent of its estimated uncovered expenses
37-22 for the next calendar year; or
37-23 (3) either the health maintenance organization has a
37-24 net worth of $5,000,000 or its sponsoring organization has a net
37-25 worth of at least $5,000,000 for each health maintenance
38-1 organization whose uncovered expenses it guarantees.
38-2 (g) If one or more of the requirements is waived, any amount
38-3 previously deposited shall remain on deposit until released in
38-4 whole or in part by the comptroller [State Treasurer] upon order of
38-5 the commissioner [State Board of Insurance] pursuant to Subsection
38-6 (f) of this section.
38-7 (h) A health maintenance organization that has made a
38-8 deposit with the comptroller [State Treasurer] may, at its option,
38-9 withdraw the deposit or any part thereof, first having deposited
38-10 with the comptroller [State Treasurer], in lieu thereof, a deposit
38-11 of cash or securities of equal amount and value to that withdrawn.
38-12 Any securities shall be approved by the commissioner [State Board
38-13 of Insurance] before being substituted.
38-14 SECTION 11. Section 14, Texas Health Maintenance
38-15 Organization Act (Article 20A.14, Vernon's Texas Insurance Code),
38-16 is amended by adding Subsections (i) through (l) to read as
38-17 follows:
38-18 (i)(1) A health maintenance organization shall not, as a
38-19 condition of a contract with a physician or provider or in any
38-20 other manner, prohibit, attempt to prohibit, or discourage a
38-21 physician or provider from:
38-22 (A) discussing with or communicating to a
38-23 current, prospective, or former patient, or a party designated by a
38-24 patient, information or opinions regarding the patient's health
38-25 care, including but not limited to the patient's medical condition
39-1 or treatment options; or
39-2 (B) discussing with or communicating in good
39-3 faith to a current, prospective, or former patient, or a party
39-4 designated by a patient, information or opinions regarding the
39-5 provisions, terms, requirements, or services of the health care
39-6 plan as they relate to the medical needs of the patient.
39-7 (2) A health maintenance organization shall not in any
39-8 way penalize, terminate, or refuse to compensate, for covered
39-9 services, a physician or provider for discussing or communicating
39-10 with a current, prospective, or former patient, or a party
39-11 designated by a patient, pursuant to this section.
39-12 (j) A health maintenance organization shall not engage in
39-13 any retaliatory action, including refusal to renew or cancellation
39-14 of coverage, against a group contract holder or enrollee because
39-15 the group, enrollee, or person acting on behalf of the group or
39-16 enrollee has filed a complaint against the health maintenance
39-17 organization or appealed a decision of the health maintenance
39-18 organization.
39-19 (k) A health maintenance organization shall not engage in
39-20 any retaliatory action, including termination of or refusal to
39-21 renew a contract, against a physician or provider because the
39-22 physician or provider has, on behalf of an enrollee, reasonably
39-23 filed a complaint against the health maintenance organization or
39-24 has appealed a decision of the health maintenance organization.
39-25 (l) A health maintenance organization may not use any
40-1 financial incentive or make any payment to a physician or provider
40-2 which acts directly or indirectly as an inducement to limit
40-3 medically necessary services.
40-4 SECTION 12. Section 15, Texas Health Maintenance
40-5 Organization Act (Article 20A.15, Vernon's Texas Insurance Code),
40-6 is amended to read as follows:
40-7 Sec. 15. REGULATION OF AGENTS [AGENT FOR SINGLE HEALTH CARE
40-8 SERVICE PLANS]. (a) A health maintenance organization agent is
40-9 anyone who represents any health maintenance organization in the
40-10 solicitation, negotiation, procurement, or effectuation of health
40-11 maintenance organization membership or holds himself or herself out
40-12 as such. No person or other legal entity may perform the acts of a
40-13 health maintenance organization agent within this state unless such
40-14 person or legal entity has a valid health maintenance organization
40-15 agent's license issued pursuant to this Act. The term "health
40-16 maintenance organization agent" shall not include:
40-17 (1) any regular salaried officer or employee of a
40-18 health maintenance organization or of a licensed health maintenance
40-19 organization agent, who devotes substantially all of his or her
40-20 time to activities other than the solicitation of applications for
40-21 health maintenance organization membership and receives no
40-22 commission or other compensation directly dependent upon the
40-23 business obtained and who does not solicit or accept from the
40-24 public applications for health maintenance organization membership;
40-25 (2) employers or their officers or employees or the
41-1 trustees of any employee benefit plan to the extent that such
41-2 employers, officers, employees, or trustees are engaged in the
41-3 administration or operation of any program of employee benefits
41-4 involving the use of membership in a health maintenance
41-5 organization; provided that such employers, officers, employees, or
41-6 trustees are not in any manner compensated directly or indirectly
41-7 by the health maintenance organization issuing such health
41-8 maintenance organization membership;
41-9 (3) banks or their officers and employees to the
41-10 extent that such banks, officers, and employees collect and remit
41-11 charges by charging same against accounts of depositors on the
41-12 orders of such depositors; or
41-13 (4) any person or the employee of any person who has
41-14 contracted to provide administrative, management, or health care
41-15 services to a health maintenance organization and who is
41-16 compensated for those services by the payment of an amount
41-17 calculated as a percentage of the revenues, net income, or profit
41-18 of the health maintenance organization, if that method of
41-19 compensation is the sole basis for subjecting that person or the
41-20 employee of the person to this section.
41-21 (b) The commissioner [Commissioner of Insurance] shall
41-22 collect in advance from health maintenance organization agent
41-23 applicants a nonrefundable license fee in an amount not to exceed
41-24 $50 as determined by the commissioner [board]. Unless the
41-25 commissioner [State Board of Insurance] accepts a qualifying
42-1 examination administered by a testing service, as provided under
42-2 Article 21.01-1, Insurance Code, as amended, the commissioner
42-3 [Commissioner of Insurance] shall also collect from such applicants
42-4 an examination fee in an amount not to exceed $20 as determined by
42-5 the commissioner [board]. A new examination fee shall be paid for
42-6 each examination. The examination fee shall not be returned under
42-7 any circumstances other than for failure to appear and take the
42-8 examination after the applicant has given at least 24 hours notice
42-9 of an emergency situation to the commissioner [Commissioner of
42-10 Insurance] and received the commissioner's approval.
42-11 (c) Except as may be provided by a staggered renewal system
42-12 adopted under Article 21.01-2, Insurance Code, and its subsequent
42-13 amendments, each license issued to a health maintenance
42-14 organization agent shall expire two years following the date of
42-15 issue, unless prior thereto it is suspended or revoked by the
42-16 commissioner or the authority of the agent to act for the health
42-17 maintenance organization is terminated.
42-18 (d) Licenses which have not expired or been suspended or
42-19 revoked may be renewed by filing with the commissioner [State Board
42-20 of Insurance] a completed renewal application and by paying a
42-21 nonrefundable renewal fee in an amount not to exceed $50 as
42-22 determined by the commissioner [board] on or before the expiration
42-23 of the license.
42-24 (e) Any agent licensed under this section may represent and
42-25 act as an agent for more than one health maintenance organization
43-1 at any time while the agent's license is in force. Any such agent
43-2 and the health maintenance organization involved must give notice
43-3 to the commissioner [State Board of Insurance] of any additional
43-4 appointment or appointments authorizing the agent to act as agent
43-5 for an additional health maintenance organization or health
43-6 maintenance organizations. Such notice must be accompanied by a
43-7 certificate from each health maintenance organization to be named
43-8 in each additional appointment that said health maintenance
43-9 organization desires to appoint the applicant as its agent. This
43-10 notice shall contain such other information as the commissioner
43-11 [State Board of Insurance] may require. The agent shall be
43-12 required to pay a nonrefundable fee in an amount not to exceed $16
43-13 as determined by the commissioner [board] for each additional
43-14 appointment applied for, which fee shall accompany the notice. If
43-15 approval of the additional appointment is not received from the
43-16 commissioner [State Board of Insurance] before the eighth day after
43-17 the date on which the completed notice and fee were received by the
43-18 commissioner [board], the agent and the health maintenance
43-19 organization, in the absence of notice of disapproval, may assume
43-20 that the board approves the application, and the agent may act for
43-21 the health maintenance organization. The commissioner [State Board
43-22 of Insurance] shall suspend the license of an agent during any
43-23 period in which the agent does not have an outstanding valid
43-24 appointment to represent a health maintenance organization. The
43-25 suspension shall be lifted on receipt by the commissioner [board]
44-1 of acceptable notice of valid appointment.
44-2 (f) It shall be the duty of the commissioner to collect from
44-3 every agent of any health maintenance organization in the State of
44-4 Texas under the provisions of this section a licensing fee and an
44-5 initial appointment fee for each appointment by a health
44-6 maintenance organization. All fees collected under this section
44-7 shall be used by the commissioner [State Board of Insurance] to
44-8 administer the provisions of this [the Texas Health Maintenance
44-9 Organization] Act and all laws of this state governing and
44-10 regulating agents for such health maintenance organizations. All
44-11 of such funds shall be paid into the State Treasury to the credit
44-12 of the Texas Department [State Board] of Insurance operating fund
44-13 and shall be paid out for salaries, traveling expenses, office
44-14 expenses, and other incidental expenses incurred and approved by
44-15 the commissioner [State Board of Insurance].
44-16 (g) The commissioner [State Board of Insurance] may, after
44-17 notice and hearings, promulgate such reasonable rules and
44-18 regulations as are necessary to provide for the licensing of
44-19 agents.
44-20 (h) [(m) Duplicate License; Fee.] The commissioner
44-21 [Commissioner of Insurance] shall collect in advance from agents
44-22 requesting duplicate licenses a fee not to exceed $20. The
44-23 commissioner [State Board of Insurance] shall determine the amount
44-24 of the fee.
44-25 (i) [(n)] The commissioner [State Board of Insurance] shall
45-1 issue a license to a corporation if it finds that:
45-2 (1) the corporation is organized or existing under the
45-3 Texas Business Corporation Act, has its principal place of business
45-4 in this state, and has as one of its purposes the authority to act
45-5 as an agent under this section; and
45-6 (2) each officer, director, and shareholder of the
45-7 corporation is individually licensed under this section.
45-8 (j) [(o)] This section may not be construed to permit any
45-9 employee, agent, or corporation to perform any act of an agent
45-10 under this section without obtaining a license.
45-11 (k) [(p)] If, at any time, a corporation that holds an
45-12 agent's license does not maintain the qualifications necessary to
45-13 obtain a license, the commissioner [State Board of Insurance] shall
45-14 cancel or revoke the license of that corporation to act as an
45-15 agent. If a person who is not a licensed agent under this section
45-16 acquires shares in such a corporation by devise or descent, that
45-17 person must either obtain a license or dispose of the shares to a
45-18 person licensed under this section not later than the 90th day
45-19 after the date on which the person acquires the shares.
45-20 (l) [(q)] If an unlicensed person acquires shares in a
45-21 corporation and does not dispose of the shares within the 90-day
45-22 period, the shares must be purchased by the corporation for the
45-23 value of the shares as reflected by the regular books and records
45-24 of the corporation as of the date of the acquisition of the shares
45-25 by the unlicensed person. If the corporation fails or refuses to
46-1 purchase the shares, the commissioner [State Board of Insurance]
46-2 shall cancel its license.
46-3 (m) [(r)] A corporation may redeem the shares of any
46-4 shareholder or the shares of a deceased shareholder on terms agreed
46-5 to by the board of directors and the shareholder or the
46-6 shareholder's personal representative or at a price and on terms
46-7 provided in the articles of incorporation, the bylaws of the
46-8 corporation, or an existing contract entered into by the
46-9 shareholders of the corporation.
46-10 (n) [(s)] With the application for a license or a license
46-11 renewal, each corporation licensed as an agent under this section
46-12 must file a sworn statement listing the names and addresses of all
46-13 of its officers, directors, and shareholders.
46-14 (o) [(t)] Each corporation shall notify the commissioner
46-15 [State Board of Insurance] of any change in its officers,
46-16 directors, or shareholders not later than the 30th day after the
46-17 date on which the change takes effect.
46-18 (p) [(u)] Another corporation may not own an interest in a
46-19 corporation licensed under this section. Each owner of an interest
46-20 in a corporation licensed under this section must be a natural
46-21 person who holds a valid license issued under this section.
46-22 SECTION 13. Section 15A, Texas Health Maintenance
46-23 Organization Act (Article 20A.15A, Vernon's Texas Insurance Code),
46-24 is amended to read as follows:
46-25 Sec. 15A. AGENTS FOR SINGLE HEALTH CARE SERVICE PLANS.
47-1 (a) A person acting as an agent for a health maintenance
47-2 organization offering only a single health care service plan who is
47-3 licensed by examination under Article 21.07, Insurance Code, or
47-4 Chapter 213, Acts of the 54th Legislature, Regular Session, 1955
47-5 (Article 21.07-1, Vernon's Texas Insurance Code), is subject to the
47-6 licensing requirements provided by this section, and except as
47-7 specifically provided by this Act or some other law, no other agent
47-8 licensing requirements apply.
47-9 (b) The commissioner shall collect in advance from
47-10 applicants for licensure as health maintenance organization agents
47-11 under this section a nonrefundable license fee in an amount not to
47-12 exceed $70 as determined by the commissioner [State Board of
47-13 Insurance].
47-14 (c) Except as may be provided by a staggered renewal system
47-15 adopted under Article 21.01-2, Insurance Code, and its subsequent
47-16 amendments, each license issued to a health maintenance
47-17 organization agent under this section shall expire two years
47-18 following the date of issuance, unless before that time the license
47-19 is suspended or revoked by the commissioner or the authority of the
47-20 agent to act for the health maintenance organization is terminated.
47-21 (d) Licenses issued under this section that have not expired
47-22 or been suspended or revoked may be renewed by filing a completed
47-23 application and paying to the commissioner [board] the required
47-24 nonrefundable renewal fee in an amount not to exceed $50 as
47-25 determined by the commissioner [board].
48-1 (e) An agent licensed under this section may represent and
48-2 act as an agent for more than one health maintenance organization
48-3 offering only a single health care service plan at any time while
48-4 that agent's license is in force. The agent and the health
48-5 maintenance organization offering only a single health care service
48-6 plan involved must give notice to the commissioner [State Board of
48-7 Insurance] of any additional appointment authorizing the agent to
48-8 act as agent for an additional health maintenance organization
48-9 offering only a single health care service plan. The notice must
48-10 be accompanied by a certificate from each health maintenance
48-11 organization to be named in each additional appointment stating
48-12 that the health maintenance organization offers only a single
48-13 health care service plan and desires to appoint the applicant as
48-14 its agent. The notice must include other information required by
48-15 the commissioner [State Board of Insurance]. The agent shall pay a
48-16 nonrefundable fee in an amount not to exceed $70 as determined by
48-17 the commissioner [State Board of Insurance] for each additional
48-18 appointment applied for. The fee must accompany the notice. If
48-19 approval of the additional appointment is not received from the
48-20 commissioner [State Board of Insurance] before the eighth day after
48-21 the date on which the completed notice and fee were received by the
48-22 commissioner [board], the agent and the health maintenance
48-23 organization, in the absence of notice of disapproval, may assume
48-24 that the commissioner [board] approves the application, and the
48-25 agent may act for the health maintenance organization offering a
49-1 single health care service plan. The commissioner [State Board of
49-2 Insurance] shall suspend the license of an agent during any period
49-3 in which the agent does not have an outstanding valid appointment
49-4 to represent a health maintenance organization offering a single
49-5 health care service plan. The suspension shall be lifted on
49-6 receipt by the commissioner [board] of acceptable notice of valid
49-7 appointment.
49-8 (f) The commissioner shall collect from each agent for any
49-9 health maintenance organization offering only a single health care
49-10 service plan a license fee and an appointment fee for each
49-11 additional appointment.
49-12 (g) Fees collected under this section shall be used by the
49-13 commissioner [State Board of Insurance] to administer this Act and
49-14 laws governing and regulating agents for health maintenance
49-15 organizations. The funds shall be deposited in the state treasury
49-16 to the credit of the Texas Department [State Board] of Insurance
49-17 operating fund and shall be paid out for salaries, traveling
49-18 expenses, office expenses, and other incidental expenses incurred
49-19 and approved by the commissioner [State Board of Insurance].
49-20 (h) The commissioner [State Board of Insurance] may, after
49-21 notice and hearing, adopt reasonable rules that are necessary to
49-22 provide for the licensing of agents under this section.
49-23 (i) A licensee may renew an unexpired license issued under
49-24 this section by filing the required renewal application and paying
49-25 a nonrefundable fee with the commissioner [State Board of
50-1 Insurance] on or before the expiration date of the license.
50-2 (j) [(l)] A health maintenance organization offering only a
50-3 single health care service plan that desires to appoint an agent
50-4 under this section shall provide to its prospective agents a
50-5 written manual, a copy of which shall be filed with the
50-6 commissioner [State Board of Insurance], outlining and describing
50-7 the single health care service offered by the health maintenance
50-8 organization, outlining this Act, and the rules of the [State Board
50-9 of Insurance and] commissioner adopted under this Act. The health
50-10 maintenance organization shall certify to the commissioner [State
50-11 Board of Insurance] that it has provided the written manual
50-12 required by this subsection to its prospective agents and has
50-13 provided, under the supervision of a licensed health maintenance
50-14 organization agent, a minimum of four hours of training in its
50-15 single health care service, this Act, and the rules of the [State
50-16 Board of Insurance and the] commissioner adopted under this Act.
50-17 (k) [(n)] Any regular salaried officer or employee of a
50-18 health maintenance organization offering only a single health care
50-19 service plan who solicits applications on behalf of that health
50-20 maintenance organization must be licensed as a health maintenance
50-21 organization agent under this section and must take any examination
50-22 and pay any fee provided by Subsection [Subsections] (b) [and (j)]
50-23 of Section 15 of this Act.
50-24 (l) [(o)] The commissioner shall collect in advance from
50-25 agents requesting duplicate licenses a fee not to exceed $20. The
51-1 commissioner [State Board of Insurance] shall determine the amount
51-2 of the fee.
51-3 SECTION 14. Section 17, Texas Health Maintenance
51-4 Organization Act (Article 20A.17, Vernon's Texas Insurance Code),
51-5 is amended to read as follows:
51-6 Sec. 17. EXAMINATIONS. (a) The commissioner may make an
51-7 examination concerning the quality of health care services and of
51-8 the affairs of any applicant for a certificate of authority or any
51-9 health maintenance organization as often as the commissioner deems
51-10 [it is deemed] necessary, but not less frequently than once every
51-11 three years.
51-12 (b) [The board may make an examination concerning the
51-13 quality of health care services of any health maintenance
51-14 organization as often as it deems it necessary, but not less
51-15 frequently than once every three years.]
51-16 [(c)] (1) Every health maintenance organization shall make
51-17 its books and records relating to its operation available for such
51-18 examinations and in every way facilitate the examinations. Every
51-19 physician and provider with whom a health maintenance organization
51-20 has a contract, agreement, or other arrangement need only make
51-21 available for examination that portion of its books and records
51-22 relevant to its relationship with the health maintenance
51-23 organization.
51-24 (2) A copy of any contract, agreement, or other
51-25 arrangement between a health maintenance organization and a
52-1 physician or provider shall be provided to the commissioner by the
52-2 health maintenance organization on the request of the commissioner.
52-3 Such documentation provided to the commissioner under this
52-4 subsection shall be deemed confidential and not subject to the open
52-5 records law, Chapter 552, Government Code.
52-6 (3) Medical, hospital, and health records of enrollees
52-7 and records of physicians and providers providing service under
52-8 independent contract with a health maintenance organization shall
52-9 only be subject to such examination as is necessary for an ongoing
52-10 quality of health assurance program concerning health care
52-11 procedures and outcome in accordance with an approved plan as
52-12 provided for in this Act. Said plan shall provide for adequate
52-13 protection of confidentiality of medical information and shall only
52-14 be disclosed in accordance with applicable law and this Act and
52-15 shall only be subject to subpoena upon a showing of good cause.
52-16 (4) [(3)] For the purpose of examinations, the
52-17 commissioner [and board] may administer oaths to and examine the
52-18 officers and agents of the health maintenance organization and the
52-19 principals of such physicians and providers concerning their
52-20 business.
52-21 (c) [(d)] Articles 1.04A, 1.15, 1.16, and 1.19, as amended,
52-22 of the Insurance Code shall be construed to apply to health
52-23 maintenance organizations, except to the extent that the
52-24 commissioner determines that the nature of the examination of a
52-25 health maintenance organization renders such clearly inappropriate.
53-1 (d) [(e)] Articles 1.12, 1.24, and 1.30, and Section 7 of
53-2 Article 1.10, Insurance Code, apply to health maintenance
53-3 organizations.
53-4 SECTION 15. Subsections (d) and (f), Section 18, Texas
53-5 Health Maintenance Organization Act (Article 20A.18, Vernon's Texas
53-6 Insurance Code), are amended to read as follows:
53-7 (d) Except as otherwise provided by this subsection, the
53-8 bond required under Subsection (c) of this section must be issued
53-9 by an insurance company that holds a certificate of authority in
53-10 this state. If, after notice and hearing, the commissioner [State
53-11 Board of Insurance] determines that the fidelity bond required by
53-12 this section is not available from an insurance company that holds
53-13 a certificate of authority in this state, a fidelity bond procured
53-14 by a licensed Texas surplus lines agent resident in this state in
53-15 compliance with Article 1.14-2, Insurance Code, satisfies the
53-16 requirements of this section.
53-17 (f) Instead of a bond, the management contractor may deposit
53-18 with the comptroller [State Treasurer] cash or securities
53-19 acceptable to the commissioner [State Board of Insurance]. Such a
53-20 deposit must be maintained in the amount and subject to the same
53-21 conditions as required for a bond under this section.
53-22 SECTION 16. The Texas Health Maintenance Organization Act
53-23 (Article 20A.01 et seq., Vernon's Texas Insurance Code), is amended
53-24 by adding Section 18A to read as follows:
53-25 Sec. 18A. PHYSICIAN AND PROVIDER CONTRACTS. (a) A health
54-1 maintenance organization shall, on request, make available and
54-2 disclose to physicians and providers written application procedures
54-3 and qualification requirements for contracting with the health
54-4 maintenance organization. Each physician and provider who
54-5 initially applies to contract with a health maintenance
54-6 organization for the provision of health care services on behalf
54-7 of the health maintenance organization and who is denied a
54-8 contract with the health maintenance organization must be provided
54-9 written notice of the reasons the initial application was denied.
54-10 Unless otherwise limited by Article 21.52B, Insurance Code, this
54-11 subsection does not prohibit a health maintenance organization plan
54-12 from rejecting an application from a physician or provider based on
54-13 the determination that the plan has sufficient qualified physicians
54-14 or providers.
54-15 (b) Before terminating a contract with a physician or
54-16 provider, the health maintenance organization shall provide a
54-17 written explanation to the physician or provider of the reasons for
54-18 termination. On request and before the effective date of the
54-19 termination, a physician or provider shall be entitled to a review
54-20 of the health maintenance organization's proposed termination by an
54-21 advisory review panel, except in cases in which there is imminent
54-22 harm to patient health or an action by a state medical or dental or
54-23 other medical or dental licensing board, or other licensing board
54-24 or other government agency, that effectively impairs the
54-25 physician's or provider's ability to practice medicine, dentistry,
55-1 or other profession, or in cases of fraud or malfeasance. The
55-2 advisory review panel shall be composed of physicians and
55-3 providers, including at least one representative in the physician's
55-4 or provider's specialty or a similar specialty, if available,
55-5 appointed to serve on the standing quality assurance committee or
55-6 utilization review committee of the health maintenance
55-7 organization. The decision of the advisory review panel must be
55-8 considered but is not binding on the health maintenance
55-9 organization. The health maintenance organization shall provide to
55-10 the affected physician or provider, on request, a copy of the
55-11 recommendation of the advisory review panel and the health
55-12 maintenance organization's determination.
55-13 (c) Each contract between a health maintenance organization
55-14 and a physician or provider of health care services must provide
55-15 that reasonable advance notice be given to an enrollee of the
55-16 impending termination from the plan of a physician or provider who
55-17 is currently treating the enrollee. Each contract must also
55-18 provide that the termination of the physician or provider contract,
55-19 except for reason of medical competence or professional behavior,
55-20 does not release the health maintenance organization from the
55-21 obligation to reimburse the physician or provider who is treating
55-22 an enrollee of special circumstance, such as a person who has a
55-23 disability, acute condition, or life-threatening illness or is past
55-24 the twenty-fourth week of pregnancy, at no less than the contract
55-25 rate for that enrollee's care in exchange for continuity of ongoing
56-1 treatment of an enrollee then receiving medically necessary
56-2 treatment in accordance with the dictates of medical prudence. For
56-3 purposes of this subsection, "special circumstance" means a
56-4 condition such that the treating physician or provider reasonably
56-5 believes that discontinuing care by the treating physician or
56-6 provider could cause harm to the patient. The special circumstance
56-7 shall be identified by the treating physician or provider, who must
56-8 request that the enrollee be permitted to continue treatment under
56-9 the physician's or provider's care and agree not to seek payment
56-10 from the patient of any amounts for which the enrollee would not be
56-11 responsible if the physician or provider were still on the health
56-12 maintenance organization network. Contracts between a health
56-13 maintenance organization and physicians or providers shall provide
56-14 procedures for resolving disputes regarding the necessity for
56-15 continued treatment by a physician or provider. This section does
56-16 not extend the obligation of the health maintenance organization to
56-17 reimburse the terminated physician or provider for ongoing
56-18 treatment of an enrollee beyond the 90th day after the effective
56-19 date of the termination. However, the obligation of the health
56-20 maintenance organization to reimburse the terminated physician or
56-21 provider or, if applicable, the enrollee for services to an
56-22 enrollee who at the time of the termination is past the 24th week
56-23 of pregnancy, extends through delivery of the child, immediate
56-24 postpartum care, and the follow-up checkup within the first six
56-25 weeks of delivery.
57-1 (d) A physician or provider who is terminated or deselected
57-2 shall be entitled to an expedited review process by the health
57-3 maintenance organization on request by the physician or provider.
57-4 If the physician or provider is deselected for reasons other than
57-5 at the physician's or provider's request, the health maintenance
57-6 organization may not notify patients of the physician's or
57-7 provider's deselection until the effective date of the termination
57-8 or the time a review panel makes a formal recommendation. If a
57-9 physician or provider is deselected for reasons related to imminent
57-10 harm, the health maintenance organization may notify patients
57-11 immediately.
57-12 (e) The following applies to any health maintenance
57-13 organization that to any extent uses capitation as a method of
57-14 compensation:
57-15 (1) The health maintenance organization shall begin
57-16 payment of capitated amounts to the enrollee's primary care
57-17 physician or primary care provider, calculated from the date of
57-18 enrollment, no later than the 90th day following the date an
57-19 enrollee has selected or has been assigned a primary care physician
57-20 or primary care provider. If selection or assignment does not
57-21 occur at the time of enrollment, capitation which would otherwise
57-22 have been paid to a selected primary care physician or primary care
57-23 provider had a selection been made shall be reserved as a
57-24 capitation payable until such time as an enrollee makes a selection
57-25 or the plan assigns a primary care physician or primary care
58-1 provider.
58-2 (2) If an enrollee does not select a primary care
58-3 physician or primary care provider at the time of application or
58-4 enrollment, a health maintenance organization may assign an
58-5 enrollee to a primary care physician or primary care provider. If
58-6 a health maintenance organization elects to assign an enrollee to a
58-7 primary care physician or primary care provider, the assignment
58-8 shall be made to a primary care physician or primary care provider
58-9 located within the zip code nearest the enrollee's residence or
58-10 place of employment and, to the extent practicable given the zip
58-11 code limitation, shall be done in a manner that results in a fair
58-12 and equal distribution of enrollees among the plan's primary care
58-13 physicians or primary care providers. An enrollee shall have the
58-14 right at any time to reject the physician or provider assigned and
58-15 to select another physician or provider from the list of primary
58-16 care physicians or primary care providers for the health
58-17 maintenance organization network. An election by an enrollee to
58-18 reject an assigned physician or provider shall not be counted as a
58-19 change in providers for purposes of the limitation described in
58-20 Section 11(a) of this Act.
58-21 (3) A health maintenance organization shall notify a
58-22 physician or provider of the selection of the physician or provider
58-23 as a primary care physician or primary care provider by an enrollee
58-24 within 30 working days of the selection or assignment of an
58-25 enrollee to that physician or provider by the health maintenance
59-1 organization.
59-2 (4) As an alternative to the provisions of
59-3 Subdivisions (1), (2), and (3) of this subsection, a health
59-4 maintenance organization may seek approval from the Texas
59-5 Department of Insurance of a different capitation payment scheme
59-6 that assures:
59-7 (A) immediate availability and accessibility of
59-8 a primary care physician or primary care provider; and
59-9 (B) payment to the primary care physician or
59-10 primary care provider of a capitation amount certified by a
59-11 qualified actuary to be actuarially sufficient to compensate the
59-12 primary care physician or primary care provider for the risk being
59-13 assumed.
59-14 (f) A contract between a health maintenance organization and
59-15 a physician or provider may not contain any clause purporting to
59-16 indemnify the health maintenance organization for any tort
59-17 liability resulting from acts or omissions of the health
59-18 maintenance organization.
59-19 (g) All contracts or other agreements between a health
59-20 maintenance organization and a physician or provider shall specify
59-21 that the physician or provider will hold an enrollee harmless for
59-22 payment of the cost of covered health care services in the event
59-23 the health maintenance organization fails to pay the provider for
59-24 health care services.
59-25 (h) A health maintenance organization that conducts or uses
60-1 economic profiling of physicians or providers within the health
60-2 maintenance organization shall make available to a network
60-3 physician or provider on request the economic profile of that
60-4 physician or provider, including the standards by which the
60-5 physician or provider is measured. The use of an economic profile
60-6 must recognize the characteristics of a physician's or provider's
60-7 practice that may account for variations from expected costs.
60-8 (i) A contract between a health maintenance organization and
60-9 a physician or a provider must require the physician or provider to
60-10 post, in the office of the physician or provider, a notice to
60-11 enrollees on the process for resolving complaints with the health
60-12 maintenance organization. The notice must include the Texas
60-13 Department of Insurance's toll-free telephone number for filing
60-14 complaints.
60-15 SECTION 17. Section 19, Texas Health Maintenance
60-16 Organization Act (Article 20A.19, Vernon's Texas Insurance Code),
60-17 is amended to read as follows:
60-18 Sec. 19. HAZARDOUS FINANCIAL CONDITION. (a) Whenever the
60-19 financial condition of any health maintenance organization
60-20 indicates a condition such that the continued operation of the
60-21 health maintenance organization might be hazardous to its
60-22 enrollees, creditors, or the general public, then the commissioner
60-23 [of insurance] may, after notice and opportunity for hearing, order
60-24 the health maintenance organization to take such action as may be
60-25 reasonably necessary to rectify the existing condition, including
61-1 but not necessarily limited to one or more of the following steps:
61-2 (1) to reduce the total amount of present and
61-3 potential liability for benefits by reinsurance;
61-4 (2) to reduce the volume of new business being
61-5 accepted;
61-6 (3) to reduce expenses by specified methods;
61-7 (4) to suspend or limit the writing of new business
61-8 for a period of time;
61-9 (5) to increase the health maintenance organization's
61-10 capital and surplus by contribution; or
61-11 (6) to suspend or revoke the certificate of authority.
61-12 (b) The commissioner [State Board of Insurance] is
61-13 authorized, by rules and regulations, to fix uniform standards and
61-14 criteria for early warning that the continued operation of any
61-15 health maintenance organization might be hazardous to its
61-16 enrollees, creditors, or the general public, and to fix standards
61-17 for evaluating the financial condition of any health maintenance
61-18 organization, which standards shall be consistent with the purposes
61-19 expressed in Subsection (a) of this section.
61-20 SECTION 18. Subsection (a), Section 20, Texas Health
61-21 Maintenance Organization Act (Article 20A.20, Vernon's Texas
61-22 Insurance Code), is amended to read as follows:
61-23 (a) The commissioner may after notice and opportunity for
61-24 hearing (i) suspend or revoke any certificate of authority issued
61-25 to a health maintenance organization under this Act; (ii) impose
62-1 sanctions under Section 7, Article 1.10, Insurance Code;
62-2 (iii) impose administrative penalties under Article 1.10E,
62-3 Insurance Code; or (iv) issue a cease and desist order under
62-4 Article 1.10A, Insurance Code, if the commissioner finds that any
62-5 of the following conditions exist:
62-6 (1) The health maintenance organization is operating
62-7 significantly in contravention of its basic organizational
62-8 documents, or its health care plan, or in a manner contrary to that
62-9 described in and reasonably inferred from any other information
62-10 submitted under Section 4 of this Act.
62-11 (2) The health maintenance organization issues
62-12 evidence of coverage or uses a schedule of charges for health care
62-13 services which does not comply with the requirements of Section 9
62-14 of this Act.
62-15 (3) The health care plan does not provide or arrange
62-16 for basic health care services or the single health care service
62-17 plan does not provide or arrange for a single health care service.
62-18 (4) The [board certifies to the commissioner that:]
62-19 [(A) the] health maintenance organization does
62-20 not meet the requirements of Section 5(a)(1) [5(a)(2)] of this
62-21 Act.[; or]
62-22 (5) The [(B) the] health maintenance organization is
62-23 unable to fulfill its obligation to furnish health care services as
62-24 required under its health care plan or to furnish a single health
62-25 care service as required under its single health care service plan.
63-1 (6) [(5)] The health maintenance organization is no
63-2 longer financially responsible and may be reasonably expected to be
63-3 unable to meet its obligations to enrollees or prospective
63-4 enrollees.
63-5 (7) [(6)] The health maintenance organization has
63-6 failed to implement the complaint system required by Section 12 of
63-7 this Act in a manner to resolve reasonably valid complaints.
63-8 (8) [(7)] The health maintenance organization, or any
63-9 person on its behalf, has advertised or merchandised its services
63-10 in an untrue, misrepresentative, misleading, deceptive, or unfair
63-11 manner.
63-12 (9) [(8)] The continued operation of the health
63-13 maintenance organization would be hazardous to its enrollees.
63-14 (10) [(9)] The health maintenance organization has
63-15 otherwise failed to comply substantially with this Act, and any
63-16 rule and regulation thereunder.
63-17 (11) The health maintenance organization has failed to
63-18 carry out corrective action the commissioner considers necessary to
63-19 correct a failure to comply with this Act, any applicable provision
63-20 of the Insurance Code, or any applicable rule or order of the
63-21 commissioner within 30 days after the date of notice of a
63-22 deficiency or within any longer period of time that the
63-23 commissioner determines to be reasonable and specifies in the
63-24 notice.
63-25 SECTION 19. Section 22, Texas Health Maintenance
64-1 Organization Act (Article 20A.22, Vernon's Texas Insurance Code),
64-2 is amended to read as follows:
64-3 Sec. 22. RULES AND REGULATIONS. (a) The commissioner
64-4 [State Board of Insurance] may promulgate such reasonable rules and
64-5 regulations as are necessary and proper to carry out the provisions
64-6 of this Act.
64-7 (b) The commissioner [State Board of Insurance] is
64-8 specifically authorized to promulgate rules to prescribe
64-9 [prescribing] authorized investments for health maintenance
64-10 organizations for all investments for which provision is not
64-11 otherwise made in this Act; to ensure that enrollees have adequate
64-12 access to health care services; and to establish minimum
64-13 physician/patient ratios, mileage requirements for primary and
64-14 specialty care, maximum travel time, and maximum waiting times for
64-15 obtaining appointments. The rulemaking authority provided by this
64-16 subsection does not limit in any manner the rulemaking authority
64-17 granted to the commissioner [State Board of Insurance] under
64-18 Subsection (a) of this section.
64-19 (c) The commissioner may promulgate such reasonable rules
64-20 and regulations as are necessary and proper to meet the
64-21 requirements of federal law and regulations.
64-22 SECTION 20. Section 23, Texas Health Maintenance
64-23 Organization Act (Article 20A.23, Vernon's Texas Insurance Code),
64-24 is amended to read as follows:
64-25 Sec. 23. APPEALS. (a) Any person who is affected by any
65-1 rule, ruling, or decision of the Texas Department of Insurance or
65-2 the commissioner [or board] shall have the right to have such rule,
65-3 ruling, or decision reviewed by the commissioner [State Board of
65-4 Insurance] by making an application to the commissioner [State
65-5 Board of Insurance]. Such application shall state the identities
65-6 of the person, the rule, ruling, or decision complained of, the
65-7 interest of the person in such rule, ruling, or decision, the
65-8 grounds of such objection, the action sought of the commissioner
65-9 [State Board of Insurance], and the reasons and grounds for such
65-10 action by the commissioner [State Board of Insurance]. The
65-11 original shall be filed with the chief clerk of the Texas
65-12 Department [State Board] of Insurance together with a certification
65-13 that a true and correct copy of such application has been filed
65-14 with the commissioner. Within 30 days after the application is
65-15 filed, and after 10 days' written notice to all parties of record,
65-16 the commissioner [State Board of Insurance] shall review the action
65-17 complained of in a public hearing and render its decision at the
65-18 earliest possible date thereafter. The commissioner [State Board
65-19 of Insurance] shall make such other rules and regulations with
65-20 respect to such applications and their consideration as it
65-21 considers to be advisable, not inconsistent with this Act. Said
65-22 application shall have precedence over all other business of a
65-23 different nature pending before said commissioner [State Board of
65-24 Insurance].
65-25 (b) In the public hearing, any and all evidence and matters
66-1 pertinent to the appeal may be submitted to the commissioner [State
66-2 Board of Insurance] whether included in the application or not.
66-3 (c) If any person who is affected by any rule, ruling, or
66-4 decision of the commissioner [State Board of Insurance] be
66-5 dissatisfied with any rule, ruling, or decision adopted by the
66-6 commissioner, [board, or State Board of Insurance,] that person,
66-7 after failing to get relief from the commissioner [State Board of
66-8 Insurance], may file a petition seeking review of the rule, ruling,
66-9 or decision and setting forth the particular objection to such
66-10 rule, ruling, or decision, or either or all of them, in a district
66-11 court of Travis County, Texas, and not elsewhere, against the
66-12 commissioner [State Board of Insurance] as defendant. The action
66-13 shall have precedence over all other causes on the docket of a
66-14 different nature. The proceedings on appeal shall be tried and
66-15 determined as provided by Article 1.04, Insurance Code. Either
66-16 party to the action may appeal to the appellate court having
66-17 jurisdiction of the cause and the appeal shall at once be
66-18 returnable to the appellate court having jurisdiction of the cause
66-19 and the action so appealed shall have precedence in the appellate
66-20 court over all causes of a different character therein pending.
66-21 The commissioner [State Board of Insurance] is not required to give
66-22 any appeal bond in any cause arising hereunder.
66-23 SECTION 21. Subdivision (4), Subsection (f), Section 26,
66-24 Texas Health Maintenance Organization Act (Article 20A.26, Vernon's
66-25 Texas Insurance Code), is amended to read as follows:
67-1 (4) Except for Articles 21.07-6 and 21.58A, Insurance
67-2 Code, the insurance laws, including the group hospital service
67-3 corporation law, do not apply to physicians and providers; however,
67-4 [provided that Article 21.58A shall not apply to utilization review
67-5 undertaken by] a physician or provider who conducts utilization
67-6 review during [in] the ordinary course of treatment of patients [by
67-7 a physician or provider] pursuant to a joint or delegated review
67-8 agreement or agreements with a health maintenance organization on
67-9 services rendered by the physician or provider shall not be
67-10 required to obtain certification under Section 3, Article 21.58A,
67-11 Insurance Code.
67-12 SECTION 22. Section 28, Texas Health Maintenance
67-13 Organization Act (Article 20A.28, Vernon's Texas Insurance Code),
67-14 is amended to read as follows:
67-15 Sec. 28. AUTHORITY TO CONTRACT. The commissioner [or
67-16 board], in carrying out the commissioner's [their] obligations
67-17 under this Act, may contract with other state agencies or, after
67-18 notice and opportunity for hearing, with other qualified persons to
67-19 make recommendations concerning the determinations to be made by
67-20 the commissioner [or board].
67-21 SECTION 23. Section 32, Texas Health Maintenance
67-22 Organization Act (Article 20A.32, Vernon's Texas Insurance Code),
67-23 is amended to read as follows:
67-24 Sec. 32. FEES. (a)(1) Every organization subject to this
67-25 chapter shall pay to the commissioner the following fees:
68-1 (A) for filing and review of its original
68-2 application for a certificate of authority, a fee in an amount not
68-3 to exceed $18,000 [$15,000] as determined by the commissioner
68-4 [State Board of Insurance];
68-5 (B) for filing each annual report pursuant to
68-6 Section 10 of this Act, a fee in an amount not to exceed $500 as
68-7 determined by the commissioner [State Board of Insurance];
68-8 (C) the expenses of all examinations of health
68-9 maintenance organizations made on behalf of the State of Texas by
68-10 the commissioner [State Board of Insurance] or under the
68-11 commissioner's [its] authority in such amounts as the commissioner
68-12 shall certify to be just and reasonable;
68-13 (D) the expenses of an examination under Section
68-14 17(a) of this Act incurred by the commissioner or under the
68-15 commissioner's authority, provided that:
68-16 (i) examination expenses are the expenses
68-17 attributable directly to a specific examination including the
68-18 actual salaries and expenses of the examiners directly attributable
68-19 to that examination as determined under rules adopted by the
68-20 commissioner; and
68-21 (ii) the expenses shall be assessed by the
68-22 commissioner and paid in accordance with rules adopted by the
68-23 commissioner;
68-24 (E) the licensing, appointment, and examination
68-25 fees pursuant to Section 15 of this[, Texas Health Maintenance
69-1 Organization] Act [(Article 20A.15, Vernon's Texas Insurance
69-2 Code)];
69-3 (F) [(E)] for filing an evidence of coverage
69-4 which requires approval, a fee not to exceed $200 as determined by
69-5 the commissioner [State Board of Insurance]; and
69-6 (G) [(F)] for filings required by rule but which
69-7 do not require approval, a fee not to exceed $100 as determined by
69-8 the commissioner [State Board of Insurance].
69-9 (2) The commissioner [State Board of Insurance] shall,
69-10 within the limits fixed by this subsection, prescribe the fees to
69-11 be charged under this subsection.
69-12 (3) Fees collected under this subsection must be
69-13 deposited in the State Treasury to the credit of the Texas
69-14 Department [State Board] of Insurance operating fund.
69-15 (4) Notwithstanding Subdivision (1) of this
69-16 subsection, the comptroller shall collect the annual report filing
69-17 fee prescribed by Subdivision (1)(B) of this subsection.
69-18 (b)[(1) Every organization subject to this chapter shall pay
69-19 to the board the following fees:]
69-20 [(A) for review of its original application for
69-21 a certificate of authority, a fee in an amount not to exceed $3,000
69-22 as determined by the board and paid pursuant to rules adopted by
69-23 the board; and]
69-24 [(B) the expenses of an examination under
69-25 Section 17(b) of this Act incurred by the board or under its
70-1 authority.]
70-2 [(2) Examination expenses are the expenses
70-3 attributable directly to a specific examination including the
70-4 actual salaries and expenses of the examiners plus the cost of
70-5 administrative departmental expenses directly attributable to that
70-6 examination as determined under rules adopted by the board. The
70-7 expenses shall be assessed by the board and paid in accordance with
70-8 rules adopted by the board.]
70-9 [(3) Except as provided by Subdivision (4) of this
70-10 subsection, the amount paid by a health maintenance organization in
70-11 each taxable year under Subdivision (1)(B) of this subsection shall
70-12 be allowed as a credit on the amount of premium taxes to be paid by
70-13 the health maintenance organization for that taxable year.]
70-14 [(4)] The amount directly attributable to an
70-15 examination of the books, records, accounts, or principal offices
70-16 of a health maintenance organization located outside this state may
70-17 not be allowed as a credit against the amount of premium taxes to
70-18 be paid by the health maintenance organization.
70-19 [(5) The funds received by the board shall be
70-20 deposited in the state treasury to the credit of the Texas
70-21 Department of Health health maintenance organization fund, and
70-22 those funds shall be appropriated to the Texas Department of Health
70-23 to carry out the statutory duties of the board under this chapter.]
70-24 SECTION 24. Subsections (a), (b), (c), (e), and (g), Section
70-25 36, Texas Health Maintenance Organization Act (Article 20A.36,
71-1 Vernon's Texas Insurance Code), are amended to read as follows:
71-2 (a) The Health Maintenance Organization Solvency
71-3 Surveillance Committee is created under the direction of the
71-4 commissioner. The committee shall perform its functions under a
71-5 plan of operation approved by the commissioner [State Board of
71-6 Insurance]. The committee is composed of nine members appointed by
71-7 the commissioner [of insurance]. No two members may be employees
71-8 or officers of the same health maintenance organization or holding
71-9 company system. The qualifications for membership, terms of
71-10 office, and reimbursement of expenses shall be as provided by the
71-11 plan of operation approved by the commissioner [State Board of
71-12 Insurance]. A "member" is a Texas licensed health maintenance
71-13 organization as defined in Section 2(n) [2(j)] of this Act or a
71-14 public representative. The commissioner of insurance shall appoint
71-15 the member along with the officer or employee of the member who
71-16 shall serve on the committee if the member is a representative of a
71-17 Texas licensed health maintenance organization or its holding
71-18 company system. Five of the members shall represent health
71-19 maintenance organizations or their holding company system. Of the
71-20 health maintenance organization members, one shall be a single
71-21 health care service plan as defined in Section 2(y) [2(s)] of this
71-22 Act. The remaining health maintenance organization members shall
71-23 be selected by the commissioner [of insurance] with due
71-24 consideration of factors deemed appropriate including, but not
71-25 limited to, the varying categories of premium income and
72-1 geographical location.
72-2 A public representative may not be:
72-3 (1) an officer, director, or employee of a health
72-4 maintenance organization, a health maintenance organization agent,
72-5 or any other business entity regulated by the commissioner [State
72-6 Board of Insurance];
72-7 (2) a person required to register with the Texas
72-8 Ethics Commission [secretary of state] under Chapter 305,
72-9 Government Code; or
72-10 (3) related to a person described by Subdivision (1)
72-11 or (2) of this subsection within the second degree of affinity or
72-12 consanguinity.
72-13 (b)(1) The committee shall assist and advise the
72-14 commissioner relating to the detection and prevention of insolvency
72-15 problems regarding health maintenance organizations. The committee
72-16 shall also assist and advise the commissioner regarding any health
72-17 maintenance organization placed in rehabilitation, liquidation,
72-18 supervision, or conservation. The method of providing this
72-19 assistance and advice shall be as contained in the plan of
72-20 operation approved by the commissioner [State Board of Insurance].
72-21 (2) Reports regarding the financial condition of Texas
72-22 licensed health maintenance organizations and regarding the
72-23 financial condition, administration, and status of health
72-24 maintenance organizations in rehabilitation, liquidation,
72-25 supervision, or conservation shall be provided to the committee
73-1 members at meetings. Committee members shall not reveal the
73-2 condition of nor any information secured in the course of any
73-3 meeting of the Solvency Surveillance Committee with regard to any
73-4 corporation, form or person examined by the committee. Committee
73-5 proceedings shall be filed with the commissioner [and reported to
73-6 the members of the State Board of Insurance].
73-7 (c) To provide funds for the administrative expenses of the
73-8 commissioner [State Board of Insurance] regarding rehabilitation,
73-9 liquidation, supervision, or conservation of an impaired health
73-10 maintenance organization in this state, the committee, at the
73-11 commissioner's direction, shall assess each health maintenance
73-12 organization licensed in this state in the proportion that the
73-13 gross premiums of that health maintenance organization written in
73-14 this state during the preceding calendar year bear to the aggregate
73-15 gross premiums written in this state by all health maintenance
73-16 organizations, as furnished to the committee by the commissioner
73-17 after review of annual statements and other reports the
73-18 commissioner considers necessary. Assessments to supplement or pay
73-19 for administrative expenses of rehabilitation, liquidation,
73-20 supervision, or conservation may be made only after the
73-21 commissioner determines that adequate assets of the health
73-22 maintenance organization are not immediately available for those
73-23 purposes or that use of those assets could be detrimental to
73-24 rehabilitation, liquidation, supervision, or conservation. The
73-25 commissioner may abate or defer the assessments, either in whole or
74-1 in part, if, in the opinion of the commissioner, payment of the
74-2 assessment would endanger the ability of a health maintenance
74-3 organization to fulfill its contractual obligations. If an
74-4 assessment is abated or deferred, either in whole or in part, the
74-5 amount by which the assessment is abated or deferred may be
74-6 assessed against the remaining licensed health maintenance
74-7 organizations in a manner consistent with the basis for assessments
74-8 provided by the plan of operation approved by the commissioner
74-9 [State Board of Insurance]. The total of all assessments on a
74-10 health maintenance organization may not exceed one-quarter of one
74-11 percent of the health maintenance organization's gross premiums in
74-12 any one calendar year.
74-13 (e) Not later than the 180th day after the date on which the
74-14 final member of the committee is appointed, the committee shall
74-15 submit to the commissioner [State Board of Insurance] a plan of
74-16 operation. The plan of operation takes effect on approval in
74-17 writing by the commissioner [State Board of Insurance]. If the
74-18 committee fails to submit a suitable plan of operation within the
74-19 period set by this subsection, or if, after the adoption of a plan,
74-20 the committee fails to submit suitable amendments to the plan, the
74-21 commissioner [State Board of Insurance] may, after notice and
74-22 hearing, adopt rules as necessary to implement this Act. Those
74-23 rules continue in effect until modified by the commissioner [State
74-24 Board of Insurance] or superseded by a plan submitted by the
74-25 committee and approved by the commissioner [State Board of
75-1 Insurance].
75-2 (g) A licensed health maintenance organization or its agents
75-3 or employees, the committee or its agents, employees, or members,
75-4 or the [State Board of Insurance, the] commissioner[,] or the
75-5 commissioner's [their] representatives are not liable in a civil
75-6 action for any act taken or not taken in good faith in the
75-7 performance of powers and duties under this section.
75-8 SECTION 25. The Texas Health Maintenance Organization Act
75-9 (Article 20A.01 et seq., Vernon's Texas Insurance Code), is amended
75-10 by adding Section 37 to read as follows:
75-11 Sec. 37. HEALTH MAINTENANCE ORGANIZATION QUALITY ASSURANCE.
75-12 (a) A health maintenance organization shall establish procedures
75-13 to assure that the health care services provided to enrollees shall
75-14 be rendered under reasonable standards of quality of care
75-15 consistent with prevailing professionally recognized standards of
75-16 medical practice. Such procedures shall include mechanisms to
75-17 assure availability, accessibility, quality, and continuity of
75-18 care.
75-19 (b) A health maintenance organization shall have an ongoing
75-20 internal quality assurance program to monitor and evaluate its
75-21 health care services, including primary and specialist physician
75-22 services, and ancillary and preventive health care services, in all
75-23 institutional and noninstitutional contexts. The commissioner by
75-24 rule may establish minimum standards and requirements for ongoing
75-25 internal quality assurance programs for health maintenance
76-1 organizations, including but not limited to standards for assuring
76-2 availability, accessibility, quality, and continuity of care.
76-3 (c) A health maintenance organization shall record formal
76-4 proceedings of quality assurance program activities and maintain
76-5 documentation in a confidential manner. Quality assurance program
76-6 minutes shall be available to the commissioner.
76-7 (d) A health maintenance organization shall establish and
76-8 maintain a physician review panel to assist in reviewing medical
76-9 guidelines or criteria and to assist in determining the
76-10 prescription drugs to be covered by the health maintenance
76-11 organization, if the health maintenance organization offers a
76-12 prescription drug benefit.
76-13 (e) A health maintenance organization shall ensure the use
76-14 and maintenance of an adequate patient record system that will
76-15 facilitate documentation and retrieval of clinical information for
76-16 the purpose of the health maintenance organization's evaluation of
76-17 continuity and coordination of patient care and assessment of the
76-18 quality of health and medical care provided to enrollees.
76-19 (f) Enrollees' clinical records shall be available to the
76-20 commissioner for examination and review to determine compliance.
76-21 Such records shall be confidential and not subject to the open
76-22 records law, Chapter 552, Government Code.
76-23 (g) A health maintenance organization shall establish a
76-24 mechanism for the periodic reporting of quality assurance program
76-25 activities to the governing body, providers, and appropriate
77-1 organization staff.
77-2 SECTION 26. This Act takes effect September 1, 1997.
77-3 SECTION 27. The importance of this legislation and the
77-4 crowded condition of the calendars in both houses create an
77-5 emergency and an imperative public necessity that the
77-6 constitutional rule requiring bills to be read on three several
77-7 days in each house be suspended, and this rule is hereby suspended.