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 5, Article 1.35A, Insurance Code, is
1-4 amended by adding Subsection (e) to read as follows:
1-5 (e) The office of public insurance counsel shall develop and
1-6 implement a system to compare and evaluate, on an objective basis,
1-7 the quality of care provided by and the performance of health
1-8 maintenance organizations that are established under the Texas
1-9 Health Maintenance Organization Act (Chapter 20A, Vernon's Texas
1-10 Insurance Code).
1-11 (1) In developing the system under this subsection,
1-12 the office of public insurance counsel may use information or data
1-13 from any person, agency, organization, or governmental unit that
1-14 the office deems reliable.
1-15 (2) The office of public insurance counsel shall
1-16 develop and issue annually consumer report cards that identify and
1-17 compare, on an objective basis, health maintenance organizations in
1-18 this state. The consumer report card may be based on information
1-19 or data from any person, agency, organization, or governmental unit
1-20 that the office deems reliable.
1-21 (3) The department and the health care information
1-22 council shall provide information or data as requested by the
1-23 office of public insurance counsel in furtherance of these duties.
2-1 (4) The office of public insurance counsel shall use
2-2 the information collected or received under this subsection for the
2-3 benefit of the public. Except as provided by this subsection, the
2-4 information is subject to the open records law, Chapter 552,
2-5 Government Code, and the office of public insurance counsel shall
2-6 make determinations on requests for information in favor of access.
2-7 (5) The office of public insurance counsel is entitled
2-8 to information that is confidential under any law of this state,
2-9 including Section 27, Texas Health Maintenance Organization Act
2-10 (Article 20A.27, Vernon's Texas Insurance Code), Chapter 108,
2-11 Health and Safety Code, and the open records law, Chapter 552,
2-12 Government Code.
2-13 (6) The office of public insurance counsel may not
2-14 make public confidential information provided to the office under
2-15 this subsection but may disclose a summary of the information that
2-16 does not directly or indirectly identify the health maintenance
2-17 organization that is the subject of the information. The office of
2-18 public insurance counsel may not release, and a person or entity
2-19 may not gain access to, any information that:
2-20 (A) could reasonably be expected to reveal the
2-21 identity of a patient or physician or that reveals the zip code of
2-22 a patient's primary residence;
2-23 (B) discloses provider discounts or
2-24 differentials between payments and billed charges; or
2-25 (C) relates to actual payments to an identified
3-1 provider made by a payer.
3-2 (7) Information collected or used by the office of
3-3 public insurance counsel under this subsection is subject to the
3-4 confidentiality provisions and criminal penalties of:
3-5 (A) Section 81.103, Health and Safety Code;
3-6 (B) Section 311.037, Health and Safety Code; and
3-7 (C) Section 5.08, Medical Practice Act (Article
3-8 4495b, Vernon's Texas Civil Statutes).
3-9 (8) Information that is in the possession of the
3-10 office of public insurance counsel and that relates to patients and
3-11 physicians and any compilation, report, or analysis produced from
3-12 the information that identifies patients and physicians is not:
3-13 (A) subject to discovery, subpoena, or other
3-14 means of legal compulsion for release to any person or entity; or
3-15 (B) admissible in any civil, administrative, or
3-16 criminal proceeding.
3-17 (9) Notwithstanding Subdivision (6)(A) of this
3-18 subsection, the office of public insurance counsel may use zip code
3-19 information to analyze information on a geographic basis.
3-20 (10) The office of public insurance counsel may not
3-21 endorse or recommend a specific health maintenance organization or
3-22 plan, or subjectively rate or rank such organizations or plans,
3-23 other than through comparison and evaluation of objective criteria.
3-24 (11) The office of public insurance counsel shall
3-25 provide a copy of the consumer report to any person on request on
4-1 payment of a reasonable fee.
4-2 SECTION 2. Subsection (a), Article 1.35B, Insurance Code, is
4-3 amended to read as follows:
4-4 (a) To defray the costs of creating, administering, and
4-5 operating the office of public insurance counsel, the comptroller
4-6 shall collect the following assessments annually in connection with
4-7 the collection of other taxes imposed on insurers:
4-8 (1) each property and casualty insurer authorized to
4-9 do business in this state shall pay an annual assessment of 5.7
4-10 cents for each policy of property and casualty insurance in force
4-11 at year end in this state;
4-12 (2) each insurer shall pay an annual assessment of 5.7
4-13 [3] cents for each individual policy, and for each certificate of
4-14 insurance evidencing coverage under a group policy, of life,
4-15 health, or accident insurance written for delivery and placed in
4-16 force with the initial premium thereon paid in full in this state
4-17 during each calendar year if the insurer is authorized to do
4-18 business in this state under:
4-19 (A) Chapter 3, 10, 11, 14, 20, 22, 23, or 25 of
4-20 this code;
4-21 (B) Chapter 113, Acts of the 53rd Legislature,
4-22 Regular Session, 1953 (Article 3.49-1, Vernon's Texas Insurance
4-23 Code);
4-24 (C) Section 1, Chapter 417, Acts of the 56th
4-25 Legislature, Regular Session, 1959 (Article 3.49-2, Vernon's Texas
5-1 Insurance Code);
5-2 (D) the Texas Employees Uniform Group Insurance
5-3 Benefits Act (Article 3.50-2, Vernon's Texas Insurance Code);
5-4 (E) the Texas State College and University
5-5 Employees Uniform Insurance Benefits Act (Article 3.50-3, Vernon's
5-6 Texas Insurance Code);
5-7 (F) Section 1, Chapter 123, Acts of the 60th
5-8 Legislature, Regular Session, 1967 (Article 3.51-3, Vernon's Texas
5-9 Insurance Code);
5-10 (G) Section 1, Chapter 387, Acts of the 55th
5-11 Legislature, Regular Session, 1957 (Article 3.62-1, Vernon's Texas
5-12 Insurance Code);
5-13 (H) Sections 1 to 3A and 4 to 13, Chapter 397,
5-14 Acts of the 54th Legislature, Regular Session, 1955 (Articles
5-15 3.70-1 to 3.70-3A and 3.70-4 to 3.70-11, Vernon's Texas Insurance
5-16 Code); or
5-17 (I) the Texas Health Maintenance Organization
5-18 Act (Chapter 20A, Vernon's Texas Insurance Code); and
5-19 (3) each title insurance company authorized to do
5-20 business in this state shall pay an annual assessment of 5.7 cents
5-21 for each owner policy and mortgage policy of title insurance
5-22 written for delivery in this state during each calendar year and
5-23 for which the full basic premium is charged.
5-24 SECTION 3. Section 2, Texas Health Maintenance Organization
5-25 Act (Article 20A.02, Vernon's Texas Insurance Code), is amended to
6-1 read as follows:
6-2 Sec. 2. Definitions. For the purposes of this Act:
6-3 (a) "Adverse determination" means a determination by a
6-4 health maintenance organization or a utilization review agent that
6-5 the health care services furnished or proposed to be furnished to a
6-6 patient are not medically necessary.
6-7 (b) "Basic health care services" means health care services
6-8 which the commissioner determines an enrolled population might
6-9 reasonably require in order to be maintained in good health,
6-10 including, at [as] a minimum, services designated as basic health
6-11 services under Section 1302, Title XIII, Public Health Service Act
6-12 (42 U.S.C. Section 300e-1(1)) [emergency care, inpatient hospital
6-13 and medical services, and outpatient medical services].
6-14 [(b) "Board" means the Texas Board of Health.]
6-15 (c) "Capitation" means a method of compensation to a
6-16 physician or provider based on a predetermined payment per enrollee
6-17 for a specified period of time for certain enrollees in exchange
6-18 for arranging for or providing a defined set of covered health care
6-19 services to such enrollees for a specified period of time,
6-20 regardless of the amount of services actually provided.
6-21 (d) "Commissioner" means the commissioner of insurance.
6-22 (e) "Complainant" means an enrollee, or a physician,
6-23 provider, or other person designated to act on behalf of an
6-24 enrollee, who files a complaint.
6-25 (f) "Complaint" means any dissatisfaction expressed by a
7-1 complainant orally or in writing to the health maintenance
7-2 organization with any aspect of the health maintenance
7-3 organization's operation, including but not limited to
7-4 dissatisfaction with plan administration; appeal of an adverse
7-5 determination; the denial, reduction, or termination of a service;
7-6 the way a service is provided; or disenrollment decisions,
7-7 expressed by a complainant. A complaint is not a misunderstanding
7-8 or a problem of misinformation that is resolved promptly by
7-9 clearing up the misunderstanding or supplying the appropriate
7-10 information to the satisfaction of the enrollee.
7-11 (g) "Emergency care" means health care services provided in
7-12 a hospital emergency facility or comparable facility to evaluate
7-13 and stabilize medical conditions of a recent onset and severity,
7-14 including but not limited to severe pain, that would lead a prudent
7-15 layperson, possessing an average knowledge of medicine and health,
7-16 to believe that his or her condition, sickness, or injury is of
7-17 such a nature that failure to get immediate medical care could
7-18 result in:
7-19 (1) placing the patient's health in serious jeopardy;
7-20 (2) serious impairment to bodily functions;
7-21 (3) serious dysfunction of any bodily organ or part;
7-22 (4) serious disfigurement; or
7-23 (5) in the case of a pregnant woman, serious jeopardy
7-24 to the health of the fetus.
7-25 (h) [(d)] "Enrollee" means an individual who is enrolled in
8-1 a health care plan, including covered dependents.
8-2 (i) [(e)] "Evidence of coverage" means any certificate,
8-3 agreement, or contract issued to an enrollee setting out the
8-4 coverage to which the enrollee is entitled.
8-5 (j) [(f)] "Group hospital service corporation" means a
8-6 nonprofit corporation organized and operating under Chapter 20 of
8-7 the Insurance Code.
8-8 (k) [(g)] "Health care" means prevention, maintenance,
8-9 rehabilitation, pharmaceutical, and chiropractic services provided
8-10 by qualified persons other than medical care.
8-11 (l) [(h)] "Health care plan" means any plan whereby any
8-12 person undertakes to provide, arrange for, pay for, or reimburse
8-13 any part of the cost of any health care services; provided,
8-14 however, a part of such plan consists of arranging for or the
8-15 provision of health care services, as distinguished from
8-16 indemnification against the cost of such service, on a prepaid
8-17 basis through insurance or otherwise.
8-18 (m) [(i)] "Health care services" means any services,
8-19 including the furnishing to any individual of pharmaceutical
8-20 services, medical, chiropractic, or dental care, or hospitalization
8-21 or incident to the furnishing of such services, care, or
8-22 hospitalization, as well as the furnishing to any person of any and
8-23 all other services for the purpose of preventing, alleviating,
8-24 curing or healing human illness or injury or a single health care
8-25 service plan.
9-1 (n) [(j)] "Health maintenance organization" means any person
9-2 who arranges for or provides a health care plan or a single health
9-3 care service plan to enrollees on a prepaid basis.
9-4 (o) "Life threatening" means a disease or condition for
9-5 which the likelihood of death is probable unless the course of the
9-6 disease or condition is interrupted.
9-7 (p) [(k)] "Medical care" means furnishing those services
9-8 defined as practicing medicine under Section 1.03(8), Medical
9-9 Practice Act (Article 4495b, Vernon's Texas Civil Statutes).
9-10 (q) [(l)] "Person" means any natural or artificial person,
9-11 including, but not limited to, individuals, partnerships,
9-12 associations, organizations, trusts, hospital districts, limited
9-13 liability companies, limited liability partnerships, or
9-14 corporations.
9-15 (r) [(m)] "Physician" means:
9-16 (1) an individual licensed to practice medicine in
9-17 this state;
9-18 (2) a professional association organized under the
9-19 Texas Professional Association Act (Article 1528f, Vernon's Texas
9-20 Civil Statutes) or a nonprofit health corporation certified under
9-21 Section 5.01, Medical Practice Act (Article 4495b, Vernon's Texas
9-22 Civil Statutes);
9-23 (3) a medical school or medical and dental unit, as
9-24 described by Section 61.003, 61.501, or 74.601, Education Code,
9-25 that employs or contracts with physicians to teach or provide
10-1 medical services or employs physicians and contracts with
10-2 physicians in a practice plan; or
10-3 (4) [(3)] another person wholly owned by physicians.
10-4 (s) "Prospective enrollee" means:
10-5 (1) in the case of an individual who is a member of a
10-6 group, an individual eligible for enrollment in a health
10-7 maintenance organization purchased through that individual's group;
10-8 or
10-9 (2) in the case of an individual who is not a member
10-10 of a group or whose group has not purchased or does not intend to
10-11 purchase a health maintenance organization plan, an individual who
10-12 has expressed an interest in purchasing individual health
10-13 maintenance organization coverage and who is eligible for coverage
10-14 by the health maintenance organization.
10-15 (t) [(n)] "Provider" means:
10-16 (1) any person other than a physician, including a
10-17 licensed doctor of chiropractic, registered nurse, pharmacist,
10-18 optometrist, registered optician, pharmacy, hospital, or other
10-19 institution or organization or person that is licensed or otherwise
10-20 authorized to provide a health care service in this state;
10-21 (2) a person who is wholly owned or controlled by a
10-22 provider or by a group of providers who are licensed to provide the
10-23 same health care service; or
10-24 (3) a person who is wholly owned or controlled by one
10-25 or more hospitals and physicians, including a physician-hospital
11-1 organization.
11-2 (u) [(o)] "Sponsoring organization" means a person who
11-3 guarantees the uncovered expenses of the health maintenance
11-4 organization and who is financially capable, as determined by the
11-5 commissioner, of meeting the obligations resulting from those
11-6 guarantees.
11-7 (v) [(p)] "Uncovered expenses" means the estimated
11-8 administrative expenses and the estimated cost of health care
11-9 services that are not guaranteed, insured, or assumed by a person
11-10 other than the health maintenance organization. Health care
11-11 services may be considered covered if the physician or provider
11-12 agrees in writing that enrollees shall in no way be liable,
11-13 assessable, or in any way subject to payment for services except as
11-14 described in the evidence of coverage issued to the enrollee under
11-15 Section 9 of this Act. The amount due on loans in the next
11-16 calendar year will be considered uncovered expenses unless
11-17 specifically subordinated to uncovered medical and health care
11-18 expenses or unless guaranteed by the sponsoring organization.
11-19 (w) [(q)] "Uncovered liabilities" means obligations
11-20 resulting from unpaid uncovered expenses, the outstanding
11-21 indebtedness of loans that are not specifically subordinated to
11-22 uncovered medical and health care expenses or guaranteed by the
11-23 sponsoring organization, and all other monetary obligations that
11-24 are not similarly subordinated or guaranteed.
11-25 (x) [(r)] "Single health care service" means a health care
12-1 service that an enrolled population may reasonably require in order
12-2 to be maintained in good health with respect to a particular health
12-3 care need for the purpose of preventing, alleviating, curing, or
12-4 healing human illness or injury of a single specified nature and
12-5 that is to be provided by one or more persons each of whom is
12-6 licensed by the state to provide that specific health care service.
12-7 (y) [(s)] "Single health care service plan" means a plan
12-8 under which any person undertakes to provide, arrange for, pay for,
12-9 or reimburse any part of the cost of a single health care service,
12-10 provided, that a part of the plan consists of arranging for or the
12-11 provision of the single health care service, as distinguished from
12-12 an indemnification against the cost of that service, on a prepaid
12-13 basis through insurance or otherwise and that no part of that plan
12-14 consists of arranging for the provision of more than one health
12-15 care need of a single specified nature.
12-16 (z) [(t) "Emergency care" means bona fide emergency services
12-17 provided after the sudden onset of a medical condition manifesting
12-18 itself by acute symptoms of sufficient severity, including severe
12-19 pain, such that the absence of immediate medical attention could
12-20 reasonably be expected to result in:]
12-21 [(1) placing the patient's health in serious jeopardy;]
12-22 [(2) serious impairment to bodily functions; or]
12-23 [(3) serious dysfunction of any bodily organ or part.]
12-24 [(u)] "Health maintenance organization delivery network"
12-25 means a health care delivery system in which a health maintenance
13-1 organization arranges for health care services directly or
13-2 indirectly through contracts and subcontracts with providers and
13-3 physicians.
13-4 SECTION 4. Section 3, Texas Health Maintenance Organization
13-5 Act (Article 20A.03, Vernon's Texas Insurance Code), is amended by
13-6 adding Subsections (e), (f), (g), and (h) to read as follows:
13-7 (e) A person, physician, or provider may not perform any of
13-8 the acts of a health maintenance organization, as defined in this
13-9 Act, except as provided by and in accordance with the specific
13-10 authorization of this Act or other law.
13-11 (f) A person, physician, or provider who performs any of the
13-12 acts of a health maintenance organization that require a
13-13 certificate of authority under this Act without having first
13-14 obtained a certificate of authority from the Texas Department of
13-15 Insurance is subject to all enforcement processes and procedures
13-16 available against an unauthorized insurer under Articles 1.14-1 and
13-17 1.19-1, Insurance Code.
13-18 (g) Subsections (e) and (f) of this section do not apply to
13-19 an activity exempt from regulation under Section 26(f) of this Act.
13-20 (h) The commissioner may exercise subpoena authority in
13-21 accordance with Article 1.19-1, Insurance Code, in implementing
13-22 this Act.
13-23 SECTION 5. Section 4, Texas Health Maintenance Organization
13-24 Act (Article 20A.04, Vernon's Texas Insurance Code), is amended to
13-25 read as follows:
14-1 Sec. 4. APPLICATION FOR CERTIFICATE OF AUTHORITY. (a) Each
14-2 application for a certificate of authority shall be on a form
14-3 prescribed by rule of the commissioner and shall be verified by the
14-4 applicant, an officer, or other authorized representative of the
14-5 applicant, and shall set forth or be accompanied by the following:
14-6 (1) a copy of the basic organizational document, if
14-7 any, of the applicant, such as the articles of incorporation,
14-8 articles of association, partnership agreement, trust agreement, or
14-9 other applicable documents, and all amendments thereto;
14-10 (2) a copy of the bylaws, rules and regulations, or
14-11 similar document, if any, regulating the conduct of the internal
14-12 affairs of the applicant;
14-13 (3) a list of the names, addresses, and official
14-14 positions of the persons who are to be responsible for the conduct
14-15 of the affairs of the applicant, including all members of the board
14-16 of directors, board of trustees, executive committee, or other
14-17 governing body or committee, the principal officer in the case of a
14-18 corporation, and the partnership or members in the case of a
14-19 partnership or association;
14-20 (4) a copy of any independent or other contract made
14-21 or to be made between any provider, physician, or persons listed in
14-22 Paragraph (3) hereof and the applicant;
14-23 (5) a copy of the form of evidence of coverage to be
14-24 issued to the enrollee;
14-25 (6) a copy of the form of the group contract, if any,
15-1 which is to be issued to employers, unions, trustees, or other
15-2 organizations;
15-3 (7) a current financial statement that includes:
15-4 (A) the sources and application of funds;
15-5 (B) projected financial statements during the
15-6 initial period of operations;
15-7 (C) a balance sheet beginning as of the date of
15-8 the expected start of operations;
15-9 (D) a statement of revenue and expenses with
15-10 expected member months; and
15-11 (E) a cash flow statement that states any
15-12 capital expenditures, purchase and sale of investments, and
15-13 deposits with the state;
15-14 (8) the schedule of charges to be used during the
15-15 first 12 months of operation;
15-16 (9) a statement acknowledging that all lawful process
15-17 in any legal action or proceeding against the health maintenance
15-18 organization on a cause of action arising in this state is valid if
15-19 served in accordance with Article 1.36, Insurance Code;
15-20 (10) a statement reasonably describing the geographic
15-21 area or areas to be served;
15-22 (11) a description of the complaint procedures to be
15-23 utilized;
15-24 (12) a description of the procedures and programs to
15-25 be implemented to meet the quality of health care requirements set
16-1 forth herein; [and]
16-2 (13) a written description of health care plan terms
16-3 and conditions made available to any current or prospective group
16-4 contract holder or current or prospective enrollee of the health
16-5 maintenance organization pursuant to the requirements of Section 11
16-6 of this Act;
16-7 (14) network configuration information, including an
16-8 explanation of the adequacy of the physician and other provider
16-9 network configuration; the information provided must include the
16-10 names of physicians, specialty physicians, and other providers by
16-11 zip code or zip code map and indicate whether each physician or
16-12 other provider is accepting new patients from the health
16-13 maintenance organization;
16-14 (15) a written description of the types of
16-15 compensation arrangements, such as compensation based on
16-16 fee-for-service arrangements, risk-sharing arrangements, or
16-17 capitated risk arrangements, made or to be made with physicians and
16-18 providers in exchange for the provision of or an arrangement to
16-19 provide health care services to enrollees, including any financial
16-20 incentives for physicians and providers; such compensation
16-21 arrangements shall be confidential and not subject to the open
16-22 records law, Chapter 552, Government Code;
16-23 (16) documentation demonstrating that the health
16-24 maintenance organization will pay for emergency care services
16-25 performed by non-network physicians or providers at the negotiated
17-1 or usual and customary rate and that the health care plan contains,
17-2 without regard to whether the physician or provider furnishing the
17-3 services has a contractual or other arrangement with the entity to
17-4 provide items or services to covered individuals, the following
17-5 provisions and procedures for coverage of emergency care services:
17-6 (A) any medical screening examination or other
17-7 evaluation required by state or federal law that is necessary to
17-8 determine whether an emergency medical condition exists will be
17-9 provided to covered enrollees in a hospital emergency facility or
17-10 comparable facility;
17-11 (B) necessary emergency care services will be
17-12 provided to covered enrollees, including the treatment and
17-13 stabilization of an emergency medical condition; and
17-14 (C) services originated in a hospital emergency
17-15 facility or comparable facility following treatment or
17-16 stabilization of an emergency medical condition will be provided to
17-17 covered enrollees as approved by the health maintenance
17-18 organization, provided that the health maintenance organization is
17-19 required to approve or deny coverage of poststabilization care as
17-20 requested by a treating physician or provider within the time
17-21 appropriate to the circumstances relating to the delivery of the
17-22 services and the condition of the patient, but in no case to exceed
17-23 one hour from the time of the request; the health maintenance
17-24 organization must respond to inquiries from the treating physician
17-25 or provider in compliance with this provision in the health
18-1 maintenance organization's plan; and
18-2 (17) such other information as the commissioner may
18-3 require to make the determinations required by this Act.
18-4 (b) The commissioner [State Board of Insurance] may
18-5 promulgate such reasonable rules and regulations as the
18-6 commissioner [it] deems necessary to the proper administration of
18-7 this Act to require a health maintenance organization, subsequent
18-8 to receiving its certificate of authority, to submit the
18-9 modifications or amendments to the operations or documents
18-10 described in Subsection (a) of this section to the commissioner,
18-11 either for his approval or for information only, prior to the
18-12 effectuation of the modification or amendment or to require the
18-13 health maintenance organization to indicate the modifications to
18-14 [both the board and] the commissioner at the time of the next site
18-15 visit or examination. As soon as reasonably possible after any
18-16 filing for approval required by this subsection is made, the
18-17 commissioner shall in writing approve or disapprove it. Any
18-18 modification or amendment for which the commissioner's approval is
18-19 required shall be considered approved unless disapproved within 30
18-20 days; provided that the commissioner may postpone the action for
18-21 such further time, not exceeding an additional 30 days, as
18-22 necessary for proper consideration.
18-23 SECTION 6. Section 5, Texas Health Maintenance Organization
18-24 Act (Article 20A.05, Vernon's Texas Insurance Code), is amended to
18-25 read as follows:
19-1 Sec. 5. Issuance of Certificate of Authority. (a)[(1) Upon
19-2 receipt of an application for issuance of a certificate of
19-3 authority, the commissioner shall begin consideration of the
19-4 application and forthwith transmit copies of such application and
19-5 accompanying documents to the board.]
19-6 [(2) The board shall determine whether the applicant
19-7 for a certificate of authority, with respect to health care
19-8 services to be furnished:]
19-9 [(A) has demonstrated the willingness and
19-10 potential ability to assure that such health care services will be
19-11 provided in a manner to assure both availability and accessibility
19-12 of adequate personnel and facilities, in a manner enhancing
19-13 availability, accessibility, and continuity of services;]
19-14 [(B) has arrangements, established in accordance
19-15 with rules and regulations promulgated by the board with the
19-16 concurrence of the commissioner, for an ongoing quality of health
19-17 care assurance program concerning health care processes and
19-18 outcome; and]
19-19 [(C) has a procedure, established by rules and
19-20 regulations of the board with the concurrence of the commissioner,
19-21 to develop, compile, evaluate, and report statistics relating to
19-22 the cost of operation, the pattern of utilization of its services,
19-23 availability and accessibility of its services.]
19-24 [(3) Within 45 days of receipt of the application by
19-25 the board for issuance of a certificate of authority, the board
20-1 shall certify to the commissioner whether the proposed health
20-2 maintenance organization meets the requirements of this section.
20-3 If the board certifies that the health maintenance organization
20-4 does not meet such requirements, it shall specify in what respects
20-5 it is deficient.]
20-6 [(b)] The commissioner shall, after notice and hearing,
20-7 issue or deny a certificate of authority to any person filing an
20-8 application pursuant to Section 4 of this Act, within 75 days of
20-9 the receipt of a completed application [the certification of the
20-10 board]; provided, however, that if notice and the opportunity for a
20-11 hearing is involved in a particular issuance or denial, then the
20-12 matter must be scheduled for a hearing within 75 days of the
20-13 receipt of a completed application. In any event, the commissioner
20-14 may grant a delay of final action on the application to an
20-15 applicant. Issuance of the certificate of authority shall be
20-16 granted upon payment of the application fee prescribed in Section
20-17 32 of this Act if the commissioner is satisfied that:
20-18 (1) the applicant for a certificate of authority, with
20-19 respect to health care services to be furnished:
20-20 (A) has demonstrated the willingness and
20-21 potential ability to assure that such health care services will be
20-22 provided in a manner to assure both availability and accessibility
20-23 of adequate personnel and facilities, in a manner enhancing
20-24 availability, accessibility, quality of care, and continuity of
20-25 services;
21-1 (B) has arrangements, established in accordance
21-2 with rules and regulations promulgated by the commissioner, for an
21-3 ongoing quality of health care assurance program concerning health
21-4 care processes and outcome; and
21-5 (C) has a procedure, established by rules and
21-6 regulations of the commissioner to develop, compile, evaluate, and
21-7 report statistics relating to the cost of operation, the pattern of
21-8 utilization of its services, and availability and accessibility of
21-9 its services; [board certifies that the health maintenance
21-10 organization's proposed plan of operation meets the requirements of
21-11 Subsection (a)(2) of this section; and]
21-12 (2) [the commissioner is satisfied that:]
21-13 [(A)] the person responsible for the conduct of
21-14 the affairs of the applicant is competent, trustworthy, and
21-15 possesses a good reputation;
21-16 (3) [(B)] the health care plan or single health care
21-17 service plan constitutes an appropriate mechanism whereby the
21-18 health maintenance organization will effectively provide or arrange
21-19 for the provision of basic health care services or single health
21-20 care service on a prepaid basis, through insurance or otherwise,
21-21 except to the extent of reasonable requirements for co-payment;
21-22 (4) [(C)] the health maintenance organization is fully
21-23 responsible and may reasonably be expected to meet its obligations
21-24 to enrollees and prospective enrollees. In making this
21-25 determination, the commissioner shall consider:
22-1 (A) [(i)] the financial soundness of the health
22-2 care plan's arrangement for health care services and a schedule of
22-3 charges used in connection therewith;
22-4 (B) [(ii)] the adequacy of working capital;
22-5 (C) [(iii)] any agreement with an insurer, group
22-6 hospital service corporation, a political subdivision of
22-7 government, or any other organization for insuring the payment of
22-8 the cost of health care services or the provision for automatic
22-9 applicability of an alternative coverage in the event of
22-10 discontinuance of plan;
22-11 (D) [(iv)] any agreement which provides for the
22-12 provision of health care services; and
22-13 (E) [(v)] any deposit of cash or securities
22-14 submitted in accordance with Section 13 of this Act as a guarantee
22-15 that the obligations will be duly performed; and
22-16 (5) [(D)] nothing in the proposed method of operation,
22-17 as shown by the information submitted pursuant to Section 4 of this
22-18 Act, or by independent investigation, is contrary to Texas law.
22-19 (b) [(c)] If [the board or] the commissioner[, or both,]
22-20 shall certify that the health maintenance organization's proposed
22-21 plan of operation does not meet the requirements of this section,
22-22 the commissioner shall not issue the certificate of authority. The
22-23 commissioner shall notify the applicant that it is deficient[,] and
22-24 shall specify in what respects it is deficient.
22-25 (c) [(d)] A certificate of authority shall continue in force
23-1 as long as the person to whom it is issued meets the requirements
23-2 of this Act or until suspended or revoked by the commissioner or
23-3 terminated at the request of the certificate holder. Any change in
23-4 control, as defined by Article 21.49--1 of the Insurance Code of
23-5 Texas, of the health maintenance organization, shall be subject to
23-6 the approval of the commissioner.
23-7 SECTION 7. Section 9, Texas Health Maintenance Organization
23-8 Act (Article 20A.09, Vernon's Texas Insurance Code), as amended by
23-9 Chapters 1091 and 1096, Acts of the 70th Legislature, Regular
23-10 Session, 1987, is amended to read as follows:
23-11 Sec. 9. EVIDENCE OF COVERAGE AND CHARGES. (a)(1) Every
23-12 enrollee residing in this state is entitled to evidence of coverage
23-13 under a health care plan. If the enrollee obtains coverage under a
23-14 health care plan through an insurance policy or a contract issued
23-15 by a group hospital service corporation, whether by option or
23-16 otherwise, the insurer or the group hospital service corporation
23-17 shall issue the evidence of coverage. Otherwise, the health
23-18 maintenance organization shall issue the evidence of coverage.
23-19 (2) No evidence of coverage, or amendment thereto,
23-20 shall be issued or delivered to any person in this state until a
23-21 copy of the form of evidence of coverage, or amendment thereto, has
23-22 been filed with and approved by the commissioner.
23-23 (3) An evidence of coverage shall contain:
23-24 (A) no provisions or statements which are
23-25 unjust, unfair, inequitable, misleading, deceptive, which encourage
24-1 misrepresentation, or which are untrue, misleading, or deceptive as
24-2 defined in Section 14 of this Act; [and]
24-3 (B) a clear and complete statement, if a
24-4 contract, or a reasonably complete facsimile, if a certificate, of:
24-5 (i) the medical, health care services, or
24-6 single health care service and the issuance of other benefits, if
24-7 any, to which the enrollee is entitled under the health care plan
24-8 or single health care service plan;
24-9 (ii) any limitation on the services, kinds
24-10 of services, benefits, or kinds of benefits to be provided,
24-11 including any deductible or co-payment feature;
24-12 (iii) where and in what manner information
24-13 is available as to how services may be obtained; and
24-14 (iv) a clear and understandable
24-15 description of the health maintenance organization's methods for
24-16 resolving enrollee complaints. Any subsequent changes may be
24-17 evidenced in a separate document issued to the enrollee;
24-18 (C) a provision that, if medically necessary
24-19 covered services are not available through network physicians or
24-20 providers, the health maintenance organization must, on the request
24-21 of a network physician or provider, within a reasonable time period
24-22 allow referral to a non-network physician or provider and shall
24-23 fully reimburse the non-network physician or provider at the usual
24-24 and customary or an agreed rate; each contract must further provide
24-25 for a review by a specialist of the same, or a similar, specialty
25-1 as the physician or provider to whom a referral is requested before
25-2 the health maintenance organization may deny a referral;
25-3 (D) a provision to allow enrollees with chronic,
25-4 disabling, or life-threatening illnesses to apply to the health
25-5 maintenance organization's medical director to utilize a nonprimary
25-6 care physician specialist as a primary care physician, provided
25-7 that:
25-8 (i) the request includes information
25-9 specified by the health maintenance organization, including
25-10 certification of medical need, and is signed by the enrollee and
25-11 the nonprimary care physician specialist interested in serving as
25-12 the primary care physician;
25-13 (ii) the nonprimary care physician
25-14 specialist meets the health maintenance organization's requirements
25-15 for primary care physician participation; and
25-16 (iii) the nonprimary care physician
25-17 specialist is willing to accept the coordination of all of the
25-18 enrollee's health care needs;
25-19 (E) a provision that if the request for special
25-20 consideration specified in Paragraph (D) of this subdivision is
25-21 denied, an enrollee may appeal the decision through the health
25-22 maintenance organization's established complaint and appeals
25-23 process; and
25-24 (F) a provision that the effective date of the
25-25 new designation of a nonprimary care physician specialist as set
26-1 out in Paragraph (D) of this subdivision shall not be retroactive;
26-2 the health maintenance organization may not reduce the amount of
26-3 compensation owed to the original primary care physician prior to
26-4 the date of the new designation.
26-5 (4) If an evidence of coverage provides benefits for
26-6 rehabilitation services and therapies, the provision of those
26-7 services and therapies that, in the opinion of a physician, are
26-8 medically necessary may not be denied, limited, or terminated if
26-9 they meet or exceed treatment goals for the enrollee. For a
26-10 physically disabled person, treatment goals may include maintenance
26-11 of functioning or prevention of or slowing of further
26-12 deterioration.
26-13 (5) Any form of the evidence of coverage or group
26-14 contract to be used in this state, and any amendments thereto, are
26-15 subject to the filing and approval requirements of Subsection (c)
26-16 of this section, unless it is subject to the jurisdiction of the
26-17 commissioner under the laws governing health insurance or group
26-18 hospital service corporations, in which event the filing and
26-19 approval provisions of such law shall apply. To the extent,
26-20 however, that such provisions do not apply to the requirements of
26-21 Subdivision (3)[, Subsection (a)] of this subsection [section], the
26-22 requirements of Subdivision (3) shall be applicable.
26-23 (b) The formula or method for calculating the schedule of
26-24 charges for enrollee coverage for medical services or health care
26-25 services must be filed with the commissioner before it is used in
27-1 conjunction with any health care plan. The formula or method must
27-2 be established in accordance with actuarial principles for the
27-3 various categories of enrollees. The charges resulting from the
27-4 application of the formula or method may not be altered for an
27-5 individual enrollee based on the status of that enrollee's health.
27-6 The formula or method must produce charges that are not excessive,
27-7 inadequate, or unfairly discriminatory, and benefits must be
27-8 reasonable with respect to the rates produced by the formula or
27-9 method. A statement by a qualified actuary that certifies the
27-10 appropriateness of the formula or method must accompany the filing
27-11 together with supporting information considered adequate by the
27-12 commissioner.
27-13 (c) The commissioner shall, within a reasonable period,
27-14 approve any form of the evidence of coverage or group contract, or
27-15 amendment thereto, if the requirements of this section are met.
27-16 After notice and opportunity for hearing, the commissioner may
27-17 withdraw previous approval of any form, if the commissioner
27-18 determines that it violates or does not comply with this Act or a
27-19 rule adopted by the commissioner [State Board of Insurance]. It
27-20 shall be unlawful to issue such form until approved. If the
27-21 commissioner disapproves such form, the commissioner shall notify
27-22 the filer. In the notice, the commissioner shall specify the
27-23 reason for the disapproval. A hearing shall be granted within 30
27-24 days after a request in writing by the person filing. If the
27-25 commissioner does not disapprove any form within 30 days after the
28-1 filing of such form it shall be considered approved; provided that
28-2 the commissioner may by written notice extend the period for
28-3 approval or disapproval of any filing for such further time, not
28-4 exceeding an additional 30 days, as necessary for proper
28-5 consideration of the filing.
28-6 (d) The commissioner may require the submission of whatever
28-7 relevant information he or she deems necessary in determining
28-8 whether to approve or disapprove a filing made pursuant to this
28-9 section.
28-10 (e) Article 3.74 of the Texas Insurance Code applies to
28-11 health maintenance organizations other than those health
28-12 maintenance organizations offering only a single health care
28-13 service plan.
28-14 (f) Article 3.51-9 of the Texas Insurance Code applies to
28-15 health maintenance organizations other than those health
28-16 maintenance organizations offering only a single health care
28-17 service plan.
28-18 (g) Evidence of coverage does not constitute a health
28-19 insurance policy as that term is defined by the Insurance Code.
28-20 (h) Article 3.70-1(F)(5) of the Insurance Code applies to
28-21 health maintenance organizations other than those health
28-22 maintenance organizations offering only a single health care
28-23 service plan.
28-24 (i) [(h)] Article 3.72 of the Insurance Code applies to
28-25 health maintenance organizations to the extent that such article is
29-1 not in conflict with this Act and to the extent that the
29-2 residential treatment center or crisis stabilization unit is
29-3 located within the service area of the health maintenance
29-4 organization and subject to such inspection and review as required
29-5 by this Act or the rules hereunder.
29-6 (j) A health maintenance organization shall comply with
29-7 [(i)] Article 21.55 of the Insurance Code with respect to prompt
29-8 payment to enrollees [this code applies to out-of-area or emergency
29-9 claims for which benefits are not assigned or payment is not made
29-10 directly to the physician or provider]. A health maintenance
29-11 organization shall make payment to a physician or provider for
29-12 covered services rendered to enrollees of the health maintenance
29-13 organization not later than the 45th day after the date a claim for
29-14 payment is received with documentation reasonably necessary for the
29-15 health maintenance organization to process the claim or, if
29-16 applicable, within the number of calendar days specified by written
29-17 agreement between the physician or provider and the health
29-18 maintenance organization. For purposes of this subsection,
29-19 "covered services" means health care services and benefits to which
29-20 enrollees are entitled under the terms of an applicable evidence of
29-21 coverage.
29-22 (k) [(j)] A health maintenance organization may provide
29-23 benefits under a health care plan to a dependent grandchild of an
29-24 enrollee when the dependent grandchild is less than 21 years old
29-25 and living with and in the household of the enrollee.
30-1 (l) A health maintenance organization that offers a basic
30-2 health care plan shall provide or arrange for the provision of
30-3 basic health care services to its enrollees as needed and without
30-4 limitations as to time and cost other than limitations prescribed
30-5 by rule of the commissioner.
30-6 (m) Nothing in this Act shall require a health maintenance
30-7 organization, physician, or provider to recommend, offer advice
30-8 concerning, pay for, provide, assist in, perform, arrange, or
30-9 participate in providing or performing any health care service that
30-10 violates its religious convictions. A health maintenance
30-11 organization that limits or denies health care services under this
30-12 subsection shall set forth such limitations in the evidence of
30-13 coverage as required by Section 9(a)(3) of this Act.
30-14 (n) The commissioner may adopt minimum standards relating to
30-15 basic health care services.
30-16 SECTION 8. Section 11, Texas Health Maintenance Organization
30-17 Act (Article 20A.11, Vernon's Texas Insurance Code), is amended to
30-18 read as follows:
30-19 Sec. 11. INFORMATION TO PROSPECTIVE AND CURRENT GROUP
30-20 CONTRACT HOLDERS AND ENROLLEES. (a) Each plan application form
30-21 shall prominently include a space in which the enrollee at the time
30-22 of application or enrollment shall make a selection of a primary
30-23 care physician or primary care provider. An enrollee shall at all
30-24 times have the right to select or change a primary care physician
30-25 or primary care provider within the health maintenance organization
31-1 network of available primary care physicians and primary care
31-2 providers. However, a health maintenance organization may limit an
31-3 enrollee's request to change physicians or providers to no more
31-4 than four changes in any 12-month period.
31-5 (b) A health maintenance organization shall provide an
31-6 accurate written description of health care plan terms and
31-7 conditions to allow any current or prospective group contract
31-8 holder and current or prospective enrollee eligible for enrollment
31-9 in a health care plan to make comparisons and informed decisions
31-10 before selecting among health care plans. The written description
31-11 must be in a readable and understandable format as prescribed by
31-12 the commissioner and shall include a current list of physicians and
31-13 providers. The health maintenance organization may provide its
31-14 handbook to satisfy this requirement provided the handbook's
31-15 content is substantially similar to and achieves the same level of
31-16 disclosure as the written description prescribed by the
31-17 commissioner and the current list of physicians and providers is
31-18 also provided.
31-19 (c) A health maintenance organization shall notify a group
31-20 contract holder within 30 days of any substantive changes to the
31-21 payment arrangements between the health maintenance organization
31-22 and health care physicians or providers.
31-23 (d) No health maintenance organization, or representative
31-24 thereof, may cause or knowingly permit the use or distribution of
31-25 prospective enrollee information which is untrue or misleading.
32-1 (e) Every health maintenance organization shall provide to
32-2 its enrollees reasonable notice of any material adverse change in
32-3 the operation of the organization that will affect them directly.
32-4 SECTION 9. The Texas Health Maintenance Organization Act
32-5 (Chapter 20A, Vernon's Texas Insurance Code) is amended by adding
32-6 Section 11A to read as follows:
32-7 Sec. 11A. ACCESS TO CERTAIN INFORMATION. (a) Each health
32-8 maintenance organization or approved nonprofit health corporation
32-9 certified under Section 5.01(a), Medical Practice Act (Article
32-10 4495b, Vernon's Texas Civil Statutes), and holding a certificate of
32-11 authority issued by the commissioner shall establish procedures to
32-12 provide to an enrollee a member handbook and materials relating to
32-13 the complaint and appeals process in the languages of the major
32-14 populations of the enrolled population. A major population is
32-15 defined as a group comprising 10 percent or more of the health
32-16 maintenance organization's enrolled population.
32-17 (b) Each health maintenance organization and approved
32-18 nonprofit health corporation certified under Section 5.01(a),
32-19 Medical Practice Act (Article 4495b, Vernon's Texas Civil
32-20 Statutes), and holding a certificate of authority issued by the
32-21 commissioner shall establish procedures to provide access to a
32-22 member handbook and the complaint and appeals process to an
32-23 enrollee who has a disability affecting the enrollee's ability to
32-24 communicate or to read.
32-25 SECTION 10. The Texas Health Maintenance Organization Act
33-1 (Chapter 20A, Vernon's Texas Insurance Code) is amended by adding
33-2 Section 11B to read as follows:
33-3 Sec. 11B. INFORMATION TO ENROLLEES AND PROSPECTIVE
33-4 ENROLLEES; MEDICARE-CONTRACTING HEALTH MAINTENANCE ORGANIZATION.
33-5 (a) Before a prospective enrollee is enrolled in a health care
33-6 plan offered to Medicare recipients by a Medicare-contracting
33-7 health maintenance organization, the health maintenance
33-8 organization must provide the prospective enrollee with a
33-9 disclosure form promulgated by the commissioner.
33-10 (b) The commissioner shall adopt a disclosure form informing
33-11 prospective enrollees in a Medicare-contracting health maintenance
33-12 organization of the effect of enrollment in a Medicare-contracting
33-13 health maintenance organization on the prospective enrollee's
33-14 opportunity to purchase Medicare supplement insurance and of any
33-15 differences in the benefits and costs between the health care plan
33-16 offered to Medicare recipients and Medicare supplement insurance.
33-17 SECTION 11. Section 12, Texas Health Maintenance
33-18 Organization Act (Article 20A.12, Vernon's Texas Insurance Code),
33-19 is amended to read as follows:
33-20 Sec. 12. COMPLAINT AND APPEAL SYSTEM. (a) Every health
33-21 maintenance organization shall establish and maintain an internal
33-22 system for the resolution of complaints, including a process for
33-23 the notice and appeal of complaints. The commissioner may adopt
33-24 reasonable rules as necessary or proper to implement and administer
33-25 this section [a complaint system to provide reasonable procedures
34-1 for the resolution of written complaints initiated by enrollees
34-2 concerning health care services]. Each health maintenance
34-3 organization shall implement and maintain a system for the
34-4 resolution of complaints as provided by this section.
34-5 (b) If a complainant notifies the health maintenance
34-6 organization orally or in writing of a complaint, the health
34-7 maintenance organization, not later than the fifth business day
34-8 after the date of the receipt of the complaint, shall send to the
34-9 complainant a letter acknowledging the date of receipt of the
34-10 complaint that includes a description of the organization's
34-11 complaint procedures and time frames. If the complaint is received
34-12 orally, the health maintenance organization shall also enclose a
34-13 one-page complaint form. The one-page complaint form must
34-14 prominently and clearly state that the complaint form must be
34-15 returned to the health maintenance organization for prompt
34-16 resolution of the complaint.
34-17 (c) The health maintenance organization shall investigate
34-18 each oral and written complaint received in accordance with its own
34-19 policies and in compliance with this Act.
34-20 (d) The total time for acknowledgment, investigation, and
34-21 resolution of the complaint by the health maintenance organization
34-22 may not exceed 30 calendar days after the date the health
34-23 maintenance organization receives the written complaint or one-page
34-24 complaint form from the complainant.
34-25 (e) Subsections (b) and (d) of this section do not apply to
35-1 complaints concerning emergencies or denials of continued stays for
35-2 hospitalization. Investigation and resolution of complaints
35-3 concerning emergencies or denials of continued stays for
35-4 hospitalization shall be concluded in accordance with the medical
35-5 or dental immediacy of the case and may not exceed one business day
35-6 from receipt of the complaint.
35-7 (f) After the health maintenance organization has
35-8 investigated a complaint, the health maintenance organization shall
35-9 issue a response letter to the complainant explaining the health
35-10 maintenance organization's resolution of the complaint within the
35-11 time frame set forth in Subsection (d) of this section. The letter
35-12 must include a statement of the specific medical and contractual
35-13 reasons for the resolution and the specialization of any physician
35-14 or other provider consulted. If the resolution is to deny services
35-15 based on an adverse determination of medical necessity, the
35-16 clinical basis used to reach that decision must be included. The
35-17 response letter must contain a full description of the process for
35-18 appeal, including the time frames for the appeals process and the
35-19 time frames for the final decision on the appeal.
35-20 (g) If the complaint is not resolved to the satisfaction of
35-21 the complainant, the health maintenance organization shall provide
35-22 an appeals process that includes the right of the complainant
35-23 either to appear in person before a complaint appeal panel where
35-24 the enrollee normally receives health care services, unless another
35-25 site is agreed to by the complainant, or to address a written
36-1 appeal to the complaint appeal panel. The health maintenance
36-2 organization shall complete the appeals process under this section
36-3 not later than the 30th calendar day after the date of the receipt
36-4 of the request for appeal.
36-5 (h) The health maintenance organization shall send an
36-6 acknowledgment letter to the complainant not later than the fifth
36-7 business day after the date of receipt of the request for appeal.
36-8 (i) The health maintenance organization shall appoint
36-9 members to the complaint appeal panel, which shall advise the
36-10 health maintenance organization on the resolution of the dispute.
36-11 The complaint appeal panel shall be composed of equal numbers of
36-12 health maintenance organization staff, physicians or other
36-13 providers, and enrollees. A member of the complaint appeal panel
36-14 may not have been previously involved in the disputed decision.
36-15 The physicians or other providers must have experience in the area
36-16 of care that is in dispute and must be independent of any physician
36-17 or provider who made any prior determination. If specialty care is
36-18 in dispute, the appeal panel must include an additional person who
36-19 is a specialist in the field of care to which the appeal relates.
36-20 The enrollees may not be employees of the health maintenance
36-21 organization.
36-22 (j) Not later than the fifth business day before the
36-23 scheduled meeting of the panel, unless the complainant agrees
36-24 otherwise, the health maintenance organization shall provide to the
36-25 complainant or the complainant's designated representative:
37-1 (1) any documentation to be presented to the panel by
37-2 the health maintenance organization staff;
37-3 (2) the specialization of any physicians or providers
37-4 consulted during the investigation; and
37-5 (3) the name and affiliation of each health
37-6 maintenance organization representative on the panel.
37-7 (k) The complainant, or designated representative if the
37-8 enrollee is a minor or disabled, is entitled to:
37-9 (1) appear in person before the complaint appeal
37-10 panel;
37-11 (2) present alternative expert testimony; and
37-12 (3) request the presence of and question any person
37-13 responsible for making the prior determination that resulted in the
37-14 appeal.
37-15 (l) Investigation and resolution of appeals relating to
37-16 ongoing emergencies or denials of continued stays for
37-17 hospitalization shall be concluded in accordance with the medical
37-18 or dental immediacy of the case but in no event to exceed one
37-19 business day after the complainant's request for appeal. Due to
37-20 the ongoing emergency or continued hospital stay, and at the
37-21 request of the complainant, the health maintenance organization
37-22 shall provide, in lieu of a complaint appeal panel, a review by a
37-23 physician or provider who has not previously reviewed the case and
37-24 is of the same or similar specialty as typically manages the
37-25 medical condition, procedure, or treatment under discussion for
38-1 review of the appeal. The physician or provider reviewing the
38-2 appeal may interview the patient or the patient's designated
38-3 representative and shall render a decision on the appeal. Initial
38-4 notice of the decision may be delivered orally if followed by
38-5 written notice of the determination within three days.
38-6 Investigation and resolution of appeals after emergency care has
38-7 been provided shall be conducted in accordance with the process
38-8 established under this section, including the right to a review by
38-9 an appeal panel.
38-10 (m) Notice of the final decision of the health maintenance
38-11 organization on the appeal must include a statement of the specific
38-12 medical determination, clinical basis, and contractual criteria
38-13 used to reach the final decision. The notice must also include the
38-14 toll-free telephone number and the address of the Texas Department
38-15 of Insurance.
38-16 (n) The health maintenance organization shall maintain a
38-17 record of each complaint and any complaint proceeding and any
38-18 actions taken on a complaint for three years from the date of the
38-19 receipt of the complaint. A complainant is entitled to a copy of
38-20 the record on the applicable complaint and any complaint
38-21 proceeding.
38-22 (o) Each health maintenance organization shall maintain a
38-23 complaint and appeal log regarding each complaint.
38-24 (p) Each health maintenance organization shall maintain
38-25 documentation on each complaint received and the action taken on
39-1 the complaint until the third anniversary of the date of receipt of
39-2 the complaint. The Texas Department of Insurance may review
39-3 documentation maintained under this subsection during any
39-4 investigation of the health maintenance organization.
39-5 (q) The commissioner [or board] may examine the [such]
39-6 complaint system for compliance with this Act and may require the
39-7 health maintenance organization to make corrections as considered
39-8 necessary by the commissioner.
39-9 SECTION 12. The Texas Health Maintenance Organization Act
39-10 (Chapter 20A, Vernon's Texas Insurance Code), is amended by adding
39-11 Section 12A to read as follows:
39-12 Sec. 12A. FILING COMPLAINTS WITH THE TEXAS DEPARTMENT OF
39-13 INSURANCE. (a) Any person, including persons who have attempted
39-14 to resolve complaints through a health maintenance organization's
39-15 complaint system process who are dissatisfied with the resolution,
39-16 may report an alleged violation of this Act to the Texas Department
39-17 of Insurance.
39-18 (b) The commissioner shall investigate a complaint against a
39-19 health maintenance organization to determine compliance with this
39-20 Act within 60 days after the Texas Department of Insurance's
39-21 receipt of the complaint and all information necessary for the
39-22 department to determine compliance. The commissioner may extend
39-23 the time necessary to complete an investigation in the event any of
39-24 the following circumstances occur:
39-25 (1) additional information is needed;
40-1 (2) an on-site review is necessary;
40-2 (3) the health maintenance organization, the physician
40-3 or provider, or the complainant does not provide all documentation
40-4 necessary to complete the investigation; or
40-5 (4) other circumstances beyond the control of the
40-6 department occur.
40-7 SECTION 13. Subsections (a), (b), (c), (f), (g), and (h),
40-8 Section 13, Texas Health Maintenance Organization Act (Article
40-9 20A.13, Vernon's Texas Insurance Code), are amended to read as
40-10 follows:
40-11 (a) Unless otherwise provided by this section, each health
40-12 maintenance organization shall deposit with the comptroller [State
40-13 Treasurer] cash or securities, or any combination of these or other
40-14 guarantees that are acceptable to the commissioner [State Board of
40-15 Insurance], in an amount as set forth in this section.
40-16 (b) For a health maintenance organization which has not
40-17 received a certificate of authority from the State Board of
40-18 Insurance or the commissioner prior to September 1, 1987:
40-19 (1) the amount of the initial deposit or other
40-20 guarantee shall be $100,000 for an organization offering basic
40-21 health care services and $50,000 for an organization offering a
40-22 single health care service plan;
40-23 (2) on or before March 15 of the year following the
40-24 year in which the health maintenance organization receives a
40-25 certificate of authority, it shall deposit with the comptroller
41-1 [State Treasurer] an amount equal to the difference between the
41-2 initial deposit and 100 percent of its estimated uncovered health
41-3 care expenses for the first 12 months of operation;
41-4 (3) on or before March 15 of each subsequent year, it
41-5 shall deposit the difference between its total uncovered health
41-6 care expenses based on its annual statement from the previous year
41-7 and the total amount previously deposited and not withdrawn from
41-8 the State Treasury; and
41-9 (4) in any year in which the amount determined in
41-10 accordance with Subdivision (3) of this subsection is zero or less
41-11 than zero, the commissioner [State Board of Insurance] may not
41-12 require the health maintenance organization to make any additional
41-13 deposit under this subsection.
41-14 (c) For a health maintenance organization which has received
41-15 a certificate of authority from the State Board of Insurance prior
41-16 to September 1, 1987:
41-17 (1) on or before March 15, 1988, the organization
41-18 shall deposit an amount equal to the sum of:
41-19 (A) $100,000 for an organization offering basic
41-20 health care services or $50,000 for an organization offering a
41-21 single health care service plan; and
41-22 (B) 100 percent of the uncovered health care
41-23 expenses for the preceding 12 months of operation;
41-24 (2) on or before March 15 of each subsequent year, the
41-25 organization shall make additional deposits of the difference
42-1 between its total uncovered health care expenses based on its
42-2 annual statement from the previous year and the total amount
42-3 previously deposited and not withdrawn from the State Treasury; and
42-4 (3) in any year in which the amount determined in
42-5 accordance with Subdivision (2) of this subsection is zero or less
42-6 than zero, the commissioner [State Board of Insurance] may not
42-7 require the health maintenance organization to make any additional
42-8 deposit under this subsection.
42-9 (f) Upon application by a health maintenance organization
42-10 operating for more than one year under a certificate of authority
42-11 issued by the State Board of Insurance or the commissioner, the
42-12 commissioner [State Board of Insurance] may waive some or all of
42-13 the requirements of Subsection (b) or (c) of this section for any
42-14 period of time it shall deem proper whenever it finds that one or
42-15 more of the following conditions justifies such waiver:
42-16 (1) the total amount of the deposit or other guarantee
42-17 is equal to 25 percent of the health maintenance organization's
42-18 estimated uncovered expenses for the next calendar year;
42-19 (2) the health maintenance organization's net worth is
42-20 equal to at least 25 percent of its estimated uncovered expenses
42-21 for the next calendar year; or
42-22 (3) either the health maintenance organization has a
42-23 net worth of $5,000,000 or its sponsoring organization has a net
42-24 worth of at least $5,000,000 for each health maintenance
42-25 organization whose uncovered expenses it guarantees.
43-1 (g) If one or more of the requirements is waived, any amount
43-2 previously deposited shall remain on deposit until released in
43-3 whole or in part by the comptroller [State Treasurer] upon order of
43-4 the commissioner [State Board of Insurance] pursuant to Subsection
43-5 (f) of this section.
43-6 (h) A health maintenance organization that has made a
43-7 deposit with the comptroller [State Treasurer] may, at its option,
43-8 withdraw the deposit or any part thereof, first having deposited
43-9 with the comptroller [State Treasurer], in lieu thereof, a deposit
43-10 of cash or securities of equal amount and value to that withdrawn.
43-11 Any securities shall be approved by the commissioner [State Board
43-12 of Insurance] before being substituted.
43-13 SECTION 14. Section 14, Texas Health Maintenance
43-14 Organization Act (Article 20A.14, Vernon's Texas Insurance Code),
43-15 is amended by adding Subsections (i) through (l) to read as
43-16 follows:
43-17 (i)(1) A health maintenance organization shall not, as a
43-18 condition of a contract with a physician or provider or in any
43-19 other manner, prohibit, attempt to prohibit, or discourage a
43-20 physician or provider from:
43-21 (A) discussing with or communicating to a
43-22 current, prospective, or former patient, or a party designated by a
43-23 patient, information or opinions regarding the patient's health
43-24 care, including but not limited to the patient's medical condition
43-25 or treatment options; or
44-1 (B) discussing with or communicating in good
44-2 faith to a current, prospective, or former patient, or a party
44-3 designated by a patient, information or opinions regarding the
44-4 provisions, terms, requirements, or services of the health care
44-5 plan as they relate to the medical needs of the patient.
44-6 (2) A health maintenance organization shall not in any
44-7 way penalize, terminate, or refuse to compensate, for covered
44-8 services, a physician or provider for discussing or communicating
44-9 with a current, prospective, or former patient, or a party
44-10 designated by a patient, pursuant to this section.
44-11 (j) A health maintenance organization shall not engage in
44-12 any retaliatory action, including refusal to renew or cancellation
44-13 of coverage, against a group contract holder or enrollee because
44-14 the group, enrollee, or person acting on behalf of the group or
44-15 enrollee has filed a complaint against the health maintenance
44-16 organization or appealed a decision of the health maintenance
44-17 organization.
44-18 (k) A health maintenance organization shall not engage in
44-19 any retaliatory action, including termination of or refusal to
44-20 renew a contract, against a physician or provider because the
44-21 physician or provider has, on behalf of an enrollee, reasonably
44-22 filed a complaint against the health maintenance organization or
44-23 has appealed a decision of the health maintenance organization.
44-24 (l) A health maintenance organization may not use any
44-25 financial incentive or make any payment to a physician or provider
45-1 that acts directly or indirectly as an inducement to limit
45-2 medically necessary services. This subsection does not prohibit
45-3 the use of capitation as a method of payment.
45-4 SECTION 15. Section 15, Texas Health Maintenance
45-5 Organization Act (Article 20A.15, Vernon's Texas Insurance Code),
45-6 is amended to read as follows:
45-7 Sec. 15. REGULATION OF AGENTS [AGENT FOR SINGLE HEALTH CARE
45-8 SERVICE PLANS]. (a) A health maintenance organization agent is
45-9 anyone who represents any health maintenance organization in the
45-10 solicitation, negotiation, procurement, or effectuation of health
45-11 maintenance organization membership or holds himself or herself out
45-12 as such. No person or other legal entity may perform the acts of a
45-13 health maintenance organization agent within this state unless such
45-14 person or legal entity has a valid health maintenance organization
45-15 agent's license issued pursuant to this Act. The term "health
45-16 maintenance organization agent" shall not include:
45-17 (1) any regular salaried officer or employee of a
45-18 health maintenance organization or of a licensed health maintenance
45-19 organization agent, who devotes substantially all of his or her
45-20 time to activities other than the solicitation of applications for
45-21 health maintenance organization membership and receives no
45-22 commission or other compensation directly dependent upon the
45-23 business obtained and who does not solicit or accept from the
45-24 public applications for health maintenance organization membership;
45-25 (2) employers or their officers or employees or the
46-1 trustees of any employee benefit plan to the extent that such
46-2 employers, officers, employees, or trustees are engaged in the
46-3 administration or operation of any program of employee benefits
46-4 involving the use of membership in a health maintenance
46-5 organization; provided that such employers, officers, employees, or
46-6 trustees are not in any manner compensated directly or indirectly
46-7 by the health maintenance organization issuing such health
46-8 maintenance organization membership;
46-9 (3) banks or their officers and employees to the
46-10 extent that such banks, officers, and employees collect and remit
46-11 charges by charging same against accounts of depositors on the
46-12 orders of such depositors; or
46-13 (4) any person or the employee of any person who has
46-14 contracted to provide administrative, management, or health care
46-15 services to a health maintenance organization and who is
46-16 compensated for those services by the payment of an amount
46-17 calculated as a percentage of the revenues, net income, or profit
46-18 of the health maintenance organization, if that method of
46-19 compensation is the sole basis for subjecting that person or the
46-20 employee of the person to this section.
46-21 (b) The commissioner [Commissioner of Insurance] shall
46-22 collect in advance from health maintenance organization agent
46-23 applicants a nonrefundable license fee in an amount not to exceed
46-24 $50 as determined by the commissioner [board]. Unless the
46-25 commissioner [State Board of Insurance] accepts a qualifying
47-1 examination administered by a testing service, as provided under
47-2 Article 21.01-1, Insurance Code, as amended, the commissioner
47-3 [Commissioner of Insurance] shall also collect from such applicants
47-4 an examination fee in an amount not to exceed $20 as determined by
47-5 the commissioner [board]. A new examination fee shall be paid for
47-6 each examination. The examination fee shall not be returned under
47-7 any circumstances other than for failure to appear and take the
47-8 examination after the applicant has given at least 24 hours notice
47-9 of an emergency situation to the commissioner [Commissioner of
47-10 Insurance] and received the commissioner's approval.
47-11 (c) Except as may be provided by a staggered renewal system
47-12 adopted under Article 21.01-2, Insurance Code, and its subsequent
47-13 amendments, each license issued to a health maintenance
47-14 organization agent shall expire two years following the date of
47-15 issue, unless prior thereto it is suspended or revoked by the
47-16 commissioner or the authority of the agent to act for the health
47-17 maintenance organization is terminated.
47-18 (d) Licenses which have not expired or been suspended or
47-19 revoked may be renewed by filing with the commissioner [State Board
47-20 of Insurance] a completed renewal application and by paying a
47-21 nonrefundable renewal fee in an amount not to exceed $50 as
47-22 determined by the commissioner [board] on or before the expiration
47-23 of the license.
47-24 (e) Any agent licensed under this section may represent and
47-25 act as an agent for more than one health maintenance organization
48-1 at any time while the agent's license is in force. Any such agent
48-2 and the health maintenance organization involved must give notice
48-3 to the commissioner [State Board of Insurance] of any additional
48-4 appointment or appointments authorizing the agent to act as agent
48-5 for an additional health maintenance organization or health
48-6 maintenance organizations. Such notice must be accompanied by a
48-7 certificate from each health maintenance organization to be named
48-8 in each additional appointment that said health maintenance
48-9 organization desires to appoint the applicant as its agent. This
48-10 notice shall contain such other information as the commissioner
48-11 [State Board of Insurance] may require. The agent shall be
48-12 required to pay a nonrefundable fee in an amount not to exceed $16
48-13 as determined by the commissioner [board] for each additional
48-14 appointment applied for, which fee shall accompany the notice. If
48-15 approval of the additional appointment is not received from the
48-16 commissioner [State Board of Insurance] before the eighth day after
48-17 the date on which the completed notice and fee were received by the
48-18 commissioner [board], the agent and the health maintenance
48-19 organization, in the absence of notice of disapproval, may assume
48-20 that the board approves the application, and the agent may act for
48-21 the health maintenance organization. The commissioner [State Board
48-22 of Insurance] shall suspend the license of an agent during any
48-23 period in which the agent does not have an outstanding valid
48-24 appointment to represent a health maintenance organization. The
48-25 suspension shall be lifted on receipt by the commissioner [board]
49-1 of acceptable notice of valid appointment.
49-2 (f) It shall be the duty of the commissioner to collect from
49-3 every agent of any health maintenance organization in the State of
49-4 Texas under the provisions of this section a licensing fee and an
49-5 initial appointment fee for each appointment by a health
49-6 maintenance organization. All fees collected under this section
49-7 shall be used by the commissioner [State Board of Insurance] to
49-8 administer the provisions of this [the Texas Health Maintenance
49-9 Organization] Act and all laws of this state governing and
49-10 regulating agents for such health maintenance organizations. All
49-11 of such funds shall be paid into the State Treasury to the credit
49-12 of the Texas Department [State Board] of Insurance operating fund
49-13 and shall be paid out for salaries, traveling expenses, office
49-14 expenses, and other incidental expenses incurred and approved by
49-15 the commissioner [State Board of Insurance].
49-16 (g) The commissioner [State Board of Insurance] may, after
49-17 notice and hearings, promulgate such reasonable rules and
49-18 regulations as are necessary to provide for the licensing of
49-19 agents.
49-20 (h) [(m) Duplicate License; Fee.] The commissioner
49-21 [Commissioner of Insurance] shall collect in advance from agents
49-22 requesting duplicate licenses a fee not to exceed $20. The
49-23 commissioner [State Board of Insurance] shall determine the amount
49-24 of the fee.
49-25 (i) [(n)] The commissioner [State Board of Insurance] shall
50-1 issue a license to a corporation if it finds that:
50-2 (1) the corporation is organized or existing under the
50-3 Texas Business Corporation Act, has its principal place of business
50-4 in this state, and has as one of its purposes the authority to act
50-5 as an agent under this section; and
50-6 (2) each officer, director, and shareholder of the
50-7 corporation is individually licensed under this section.
50-8 (j) [(o)] This section may not be construed to permit any
50-9 employee, agent, or corporation to perform any act of an agent
50-10 under this section without obtaining a license.
50-11 (k) [(p)] If, at any time, a corporation that holds an
50-12 agent's license does not maintain the qualifications necessary to
50-13 obtain a license, the commissioner [State Board of Insurance] shall
50-14 cancel or revoke the license of that corporation to act as an
50-15 agent. If a person who is not a licensed agent under this section
50-16 acquires shares in such a corporation by devise or descent, that
50-17 person must either obtain a license or dispose of the shares to a
50-18 person licensed under this section not later than the 90th day
50-19 after the date on which the person acquires the shares.
50-20 (l) [(q)] If an unlicensed person acquires shares in a
50-21 corporation and does not dispose of the shares within the 90-day
50-22 period, the shares must be purchased by the corporation for the
50-23 value of the shares as reflected by the regular books and records
50-24 of the corporation as of the date of the acquisition of the shares
50-25 by the unlicensed person. If the corporation fails or refuses to
51-1 purchase the shares, the commissioner [State Board of Insurance]
51-2 shall cancel its license.
51-3 (m) [(r)] A corporation may redeem the shares of any
51-4 shareholder or the shares of a deceased shareholder on terms agreed
51-5 to by the board of directors and the shareholder or the
51-6 shareholder's personal representative or at a price and on terms
51-7 provided in the articles of incorporation, the bylaws of the
51-8 corporation, or an existing contract entered into by the
51-9 shareholders of the corporation.
51-10 (n) [(s)] With the application for a license or a license
51-11 renewal, each corporation licensed as an agent under this section
51-12 must file a sworn statement listing the names and addresses of all
51-13 of its officers, directors, and shareholders.
51-14 (o) [(t)] Each corporation shall notify the commissioner
51-15 [State Board of Insurance] of any change in its officers,
51-16 directors, or shareholders not later than the 30th day after the
51-17 date on which the change takes effect.
51-18 (p) [(u)] Another corporation may not own an interest in a
51-19 corporation licensed under this section. Each owner of an interest
51-20 in a corporation licensed under this section must be a natural
51-21 person who holds a valid license issued under this section.
51-22 SECTION 16. Section 15A, Texas Health Maintenance
51-23 Organization Act (Article 20A.15A, Vernon's Texas Insurance Code),
51-24 is amended to read as follows:
51-25 Sec. 15A. Agents for Single Health Care Service Plans.
52-1 (a) A person acting as an agent for a health maintenance
52-2 organization offering only a single health care service plan who is
52-3 licensed by examination under Article 21.07, Insurance Code, or
52-4 Chapter 213, Acts of the 54th Legislature, Regular Session, 1955
52-5 (Article 21.07-1, Vernon's Texas Insurance Code), is subject to the
52-6 licensing requirements provided by this section, and except as
52-7 specifically provided by this Act or some other law, no other agent
52-8 licensing requirements apply.
52-9 (b) The commissioner shall collect in advance from
52-10 applicants for licensure as health maintenance organization agents
52-11 under this section a nonrefundable license fee in an amount not to
52-12 exceed $70 as determined by the commissioner [State Board of
52-13 Insurance].
52-14 (c) Except as may be provided by a staggered renewal system
52-15 adopted under Article 21.01-2, Insurance Code, and its subsequent
52-16 amendments, each license issued to a health maintenance
52-17 organization agent under this section shall expire two years
52-18 following the date of issuance, unless before that time the license
52-19 is suspended or revoked by the commissioner or the authority of the
52-20 agent to act for the health maintenance organization is terminated.
52-21 (d) Licenses issued under this section that have not expired
52-22 or been suspended or revoked may be renewed by filing a completed
52-23 application and paying to the commissioner [board] the required
52-24 nonrefundable renewal fee in an amount not to exceed $50 as
52-25 determined by the commissioner [board].
53-1 (e) An agent licensed under this section may represent and
53-2 act as an agent for more than one health maintenance organization
53-3 offering only a single health care service plan at any time while
53-4 that agent's license is in force. The agent and the health
53-5 maintenance organization offering only a single health care service
53-6 plan involved must give notice to the commissioner [State Board of
53-7 Insurance] of any additional appointment authorizing the agent to
53-8 act as agent for an additional health maintenance organization
53-9 offering only a single health care service plan. The notice must
53-10 be accompanied by a certificate from each health maintenance
53-11 organization to be named in each additional appointment stating
53-12 that the health maintenance organization offers only a single
53-13 health care service plan and desires to appoint the applicant as
53-14 its agent. The notice must include other information required by
53-15 the commissioner [State Board of Insurance]. The agent shall pay a
53-16 nonrefundable fee in an amount not to exceed $70 as determined by
53-17 the commissioner [State Board of Insurance] for each additional
53-18 appointment applied for. The fee must accompany the notice. If
53-19 approval of the additional appointment is not received from the
53-20 commissioner [State Board of Insurance] before the eighth day after
53-21 the date on which the completed notice and fee were received by the
53-22 commissioner [board], the agent and the health maintenance
53-23 organization, in the absence of notice of disapproval, may assume
53-24 that the commissioner [board] approves the application, and the
53-25 agent may act for the health maintenance organization offering a
54-1 single health care service plan. The commissioner [State Board of
54-2 Insurance] shall suspend the license of an agent during any period
54-3 in which the agent does not have an outstanding valid appointment
54-4 to represent a health maintenance organization offering a single
54-5 health care service plan. The suspension shall be lifted on
54-6 receipt by the commissioner [board] of acceptable notice of valid
54-7 appointment.
54-8 (f) The commissioner shall collect from each agent for any
54-9 health maintenance organization offering only a single health care
54-10 service plan a license fee and an appointment fee for each
54-11 additional appointment.
54-12 (g) Fees collected under this section shall be used by the
54-13 commissioner [State Board of Insurance] to administer this Act and
54-14 laws governing and regulating agents for health maintenance
54-15 organizations. The funds shall be deposited in the state treasury
54-16 to the credit of the Texas Department [State Board] of Insurance
54-17 operating fund and shall be paid out for salaries, traveling
54-18 expenses, office expenses, and other incidental expenses incurred
54-19 and approved by the commissioner [State Board of Insurance].
54-20 (h) The commissioner [State Board of Insurance] may, after
54-21 notice and hearing, adopt reasonable rules that are necessary to
54-22 provide for the licensing of agents under this section.
54-23 (i) A licensee may renew an unexpired license issued under
54-24 this section by filing the required renewal application and paying
54-25 a nonrefundable fee with the commissioner [State Board of
55-1 Insurance] on or before the expiration date of the license.
55-2 (j) [(l)] A health maintenance organization offering only a
55-3 single health care service plan that desires to appoint an agent
55-4 under this section shall provide to its prospective agents a
55-5 written manual, a copy of which shall be filed with the
55-6 commissioner [State Board of Insurance], outlining and describing
55-7 the single health care service offered by the health maintenance
55-8 organization, outlining this Act, and the rules of the [State Board
55-9 of Insurance and] commissioner adopted under this Act. The health
55-10 maintenance organization shall certify to the commissioner [State
55-11 Board of Insurance] that it has provided the written manual
55-12 required by this subsection to its prospective agents and has
55-13 provided, under the supervision of a licensed health maintenance
55-14 organization agent, a minimum of four hours of training in its
55-15 single health care service, this Act, and the rules of the [State
55-16 Board of Insurance and the] commissioner adopted under this Act.
55-17 (k) [(n)] Any regular salaried officer or employee of a
55-18 health maintenance organization offering only a single health care
55-19 service plan who solicits applications on behalf of that health
55-20 maintenance organization must be licensed as a health maintenance
55-21 organization agent under this section and must take any examination
55-22 and pay any fee provided by Subsection [Subsections] (b) [and (j)]
55-23 of Section 15 of this Act.
55-24 (l) [(o)] The commissioner shall collect in advance from
55-25 agents requesting duplicate licenses a fee not to exceed $20. The
56-1 commissioner [State Board of Insurance] shall determine the amount
56-2 of the fee.
56-3 SECTION 17. Section 17, Texas Health Maintenance
56-4 Organization Act (Article 20A.17, Vernon's Texas Insurance Code),
56-5 is amended to read as follows:
56-6 Sec. 17. Examinations. (a) The commissioner may make an
56-7 examination concerning the quality of health care services and of
56-8 the affairs of any applicant for a certificate of authority or any
56-9 health maintenance organization as often as the commissioner deems
56-10 [it is deemed] necessary, but not less frequently than once every
56-11 three years.
56-12 (b) [The board may make an examination concerning the
56-13 quality of health care services of any health maintenance
56-14 organization as often as it deems it necessary, but not less
56-15 frequently than once every three years.]
56-16 [(c)] (1) Every health maintenance organization shall make
56-17 its books and records relating to its operation available for such
56-18 examinations and in every way facilitate the examinations. Every
56-19 physician and provider with whom a health maintenance organization
56-20 has a contract, agreement, or other arrangement need only make
56-21 available for examination that portion of its books and records
56-22 relevant to its relationship with the health maintenance
56-23 organization.
56-24 (2) A copy of any contract, agreement, or other
56-25 arrangement between a health maintenance organization and a
57-1 physician or provider shall be provided to the commissioner by the
57-2 health maintenance organization on the request of the commissioner.
57-3 Such documentation provided to the commissioner under this
57-4 subsection shall be deemed confidential and not subject to the open
57-5 records law, Chapter 552, Government Code.
57-6 (3) Medical, hospital, and health records of enrollees
57-7 and records of physicians and providers providing service under
57-8 independent contract with a health maintenance organization shall
57-9 only be subject to such examination as is necessary for an ongoing
57-10 quality of health assurance program concerning health care
57-11 procedures and outcome in accordance with an approved plan as
57-12 provided for in this Act. Said plan shall provide for adequate
57-13 protection of confidentiality of medical information and shall only
57-14 be disclosed in accordance with applicable law and this Act and
57-15 shall only be subject to subpoena upon a showing of good cause.
57-16 (4) The commissioner may examine and use the records
57-17 of a health maintenance organization, including records of a
57-18 quality of care assurance program and records of a medical peer
57-19 review committee as that term is used in Section 1.03, Medical
57-20 Practice Act (Article 4495b, Vernon's Texas Civil Statutes), as
57-21 necessary to carry out the purposes of this Act, including an
57-22 enforcement action under Section 20 of this Act. That information
57-23 is confidential and privileged and is not subject to the open
57-24 records law, Chapter 552, Government Code, or to subpoena except as
57-25 necessary for the commissioner to enforce this Act.
58-1 (5) [(3)] For the purpose of examinations, the
58-2 commissioner [and board] may administer oaths to and examine the
58-3 officers and agents of the health maintenance organization and the
58-4 principals of such physicians and providers concerning their
58-5 business.
58-6 (c) [(d)] Articles 1.04A, 1.15, 1.16, and 1.19, as amended,
58-7 of the Insurance Code shall be construed to apply to health
58-8 maintenance organizations, except to the extent that the
58-9 commissioner determines that the nature of the examination of a
58-10 health maintenance organization renders such clearly inappropriate.
58-11 (d) [(e)] Articles 1.12, 1.24, and 1.30, and Section 7 of
58-12 Article 1.10, Insurance Code, apply to health maintenance
58-13 organizations.
58-14 SECTION 18. Subsections (d) and (f), Section 18, Texas
58-15 Health Maintenance Organization Act (Article 20A.18, Vernon's Texas
58-16 Insurance Code), are amended to read as follows:
58-17 (d) Except as otherwise provided by this subsection, the
58-18 bond required under Subsection (c) of this section must be issued
58-19 by an insurance company that holds a certificate of authority in
58-20 this state. If, after notice and hearing, the commissioner [State
58-21 Board of Insurance] determines that the fidelity bond required by
58-22 this section is not available from an insurance company that holds
58-23 a certificate of authority in this state, a fidelity bond procured
58-24 by a licensed Texas surplus lines agent resident in this state in
58-25 compliance with Article 1.14-2, Insurance Code, satisfies the
59-1 requirements of this section.
59-2 (f) Instead of a bond, the management contractor may deposit
59-3 with the comptroller [State Treasurer] cash or securities
59-4 acceptable to the commissioner [State Board of Insurance]. Such a
59-5 deposit must be maintained in the amount and subject to the same
59-6 conditions as required for a bond under this section.
59-7 SECTION 19. The Texas Health Maintenance Organization Act
59-8 (Chapter 20A, Vernon's Texas Insurance Code), is amended by adding
59-9 Section 18A to read as follows:
59-10 Sec. 18A. PHYSICIAN AND PROVIDER CONTRACTS. (a) A health
59-11 maintenance organization shall, on request, make available and
59-12 disclose to physicians and providers written application procedures
59-13 and qualification requirements for contracting with the health
59-14 maintenance organization. Each physician and provider who
59-15 initially applies to contract with a health maintenance
59-16 organization for the provision of health care services on behalf of
59-17 the health maintenance organization and who is denied a contract
59-18 with the health maintenance organization must be provided written
59-19 notice of the reasons the initial application was denied. Unless
59-20 otherwise limited by Article 21.52B, Insurance Code, this
59-21 subsection does not prohibit a health maintenance organization plan
59-22 from rejecting an application from a physician or provider based on
59-23 the determination that the plan has sufficient qualified physicians
59-24 or providers.
59-25 (b) Before terminating a contract with a physician or
60-1 provider, the health maintenance organization shall provide a
60-2 written explanation to the physician or provider of the reasons for
60-3 termination. On request and before the effective date of the
60-4 termination, but within a period not to exceed 60 days, a physician
60-5 or provider shall be entitled to a review of the health maintenance
60-6 organization's proposed termination by an advisory review panel,
60-7 except in a case in which there is imminent harm to patient health
60-8 or an action by a state medical or dental board, other medical or
60-9 dental licensing board, or other licensing board or other
60-10 government agency, that effectively impairs the physician's or
60-11 provider's ability to practice medicine, dentistry, or another
60-12 profession, or in a case of fraud or malfeasance. The advisory
60-13 review panel shall be composed of physicians and providers,
60-14 including at least one representative in the physician's or
60-15 provider's specialty or a similar specialty, if available,
60-16 appointed to serve on the standing quality assurance committee or
60-17 utilization review committee of the health maintenance
60-18 organization. The decision of the advisory review panel must be
60-19 considered but is not binding on the health maintenance
60-20 organization. The health maintenance organization shall provide to
60-21 the affected physician or provider, on request, a copy of the
60-22 recommendation of the advisory review panel and the health
60-23 maintenance organization's determination.
60-24 (c) Each contract between a health maintenance organization
60-25 and a physician or provider of health care services must provide
61-1 that reasonable advance notice be given to an enrollee of the
61-2 impending termination from the plan of a physician or provider who
61-3 is currently treating the enrollee. Each contract must also
61-4 provide that the termination of the physician or provider contract,
61-5 except for reason of medical competence or professional behavior,
61-6 does not release the health maintenance organization from the
61-7 obligation to reimburse the physician or provider who is treating
61-8 an enrollee of special circumstance, such as a person who has a
61-9 disability, acute condition, or life-threatening illness or is past
61-10 the twenty-fourth week of pregnancy, at no less than the contract
61-11 rate for that enrollee's care in exchange for continuity of ongoing
61-12 treatment of an enrollee then receiving medically necessary
61-13 treatment in accordance with the dictates of medical prudence. For
61-14 purposes of this subsection, "special circumstance" means a
61-15 condition such that the treating physician or provider reasonably
61-16 believes that discontinuing care by the treating physician or
61-17 provider could cause harm to the patient. The special circumstance
61-18 shall be identified by the treating physician or provider, who must
61-19 request that the enrollee be permitted to continue treatment under
61-20 the physician's or provider's care and agree not to seek payment
61-21 from the patient of any amounts for which the enrollee would not be
61-22 responsible if the physician or provider were still on the health
61-23 maintenance organization network. Contracts between a health
61-24 maintenance organization and physicians or providers shall provide
61-25 procedures for resolving disputes regarding the necessity for
62-1 continued treatment by a physician or provider. This section does
62-2 not extend the obligation of the health maintenance organization to
62-3 reimburse the terminated physician or provider for ongoing
62-4 treatment of an enrollee beyond the 90th day after the effective
62-5 date of the termination, or beyond nine months in the case of an
62-6 enrollee who at the time of the termination has been diagnosed with
62-7 a terminal illness. However, the obligation of the health
62-8 maintenance organization to reimburse the terminated physician or
62-9 provider or, if applicable, the enrollee for services to an
62-10 enrollee who at the time of the termination is past the 24th week
62-11 of pregnancy, extends through delivery of the child, immediate
62-12 postpartum care, and the follow-up checkup within the first six
62-13 weeks of delivery.
62-14 (d) A physician or provider who is terminated or deselected
62-15 shall be entitled to an expedited review process by the health
62-16 maintenance organization on request by the physician or provider.
62-17 If the physician or provider is deselected for reasons other than
62-18 at the physician's or provider's request, the health maintenance
62-19 organization may not notify patients of the physician's or
62-20 provider's deselection until the effective date of the termination
62-21 or the time a review panel makes a formal recommendation. If a
62-22 physician or provider is deselected for reasons related to imminent
62-23 harm, the health maintenance organization may notify patients
62-24 immediately.
62-25 (e) The following applies to any health maintenance
63-1 organization that to any extent uses capitation as a method of
63-2 compensation:
63-3 (1) The health maintenance organization shall begin
63-4 payment of capitated amounts to the enrollee's primary care
63-5 physician or primary care provider, calculated from the date of
63-6 enrollment, no later than the 60th day following the date an
63-7 enrollee has selected or has been assigned a primary care physician
63-8 or primary care provider. If selection or assignment does not
63-9 occur at the time of enrollment, capitation which would otherwise
63-10 have been paid to a selected primary care physician or primary care
63-11 provider had a selection been made shall be reserved as a
63-12 capitation payable until such time as an enrollee makes a selection
63-13 or the plan assigns a primary care physician or primary care
63-14 provider.
63-15 (2) If an enrollee does not select a primary care
63-16 physician or primary care provider at the time of application or
63-17 enrollment, a health maintenance organization may assign an
63-18 enrollee to a primary care physician or primary care provider. If
63-19 a health maintenance organization elects to assign an enrollee to a
63-20 primary care physician or primary care provider, the assignment
63-21 shall be made to a primary care physician or primary care provider
63-22 located within the zip code nearest the enrollee's residence or
63-23 place of employment and, to the extent practicable given the zip
63-24 code limitation, shall be done in a manner that results in a fair
63-25 and equal distribution of enrollees among the plan's primary care
64-1 physicians or primary care providers. The health maintenance
64-2 organization shall inform an enrollee of the name, address, and
64-3 telephone number of the primary care physician or primary care
64-4 provider to whom the enrollee has been assigned and of the
64-5 enrollee's right to select a different primary care physician or
64-6 primary care provider. An enrollee shall have the right at any
64-7 time to reject the physician or provider assigned and to select
64-8 another physician or provider from the list of primary care
64-9 physicians or primary care providers for the health maintenance
64-10 organization network. An election by an enrollee to reject an
64-11 assigned physician or provider shall not be counted as a change in
64-12 providers for purposes of the limitation described in Section 11(a)
64-13 of this Act.
64-14 (3) A health maintenance organization shall notify a
64-15 physician or provider of the selection of the physician or provider
64-16 as a primary care physician or primary care provider by an enrollee
64-17 within 30 working days of the selection or assignment of an
64-18 enrollee to that physician or provider by the health maintenance
64-19 organization.
64-20 (4) As an alternative to the provisions of
64-21 Subdivisions (1), (2), and (3) of this subsection, a health
64-22 maintenance organization may seek approval from the Texas
64-23 Department of Insurance of a different capitation payment scheme
64-24 that assures:
64-25 (A) immediate availability and accessibility of
65-1 a primary care physician or primary care provider; and
65-2 (B) payment to the primary care physician or
65-3 primary care provider of a capitation amount certified by a
65-4 qualified actuary to be actuarially sufficient to compensate the
65-5 primary care physician or primary care provider for the risk being
65-6 assumed.
65-7 (f) A contract between a health maintenance organization and
65-8 a physician or provider may not contain any clause purporting to
65-9 indemnify the health maintenance organization for any tort
65-10 liability resulting from acts or omissions of the health
65-11 maintenance organization.
65-12 (g) All contracts or other agreements between a health
65-13 maintenance organization and a physician or provider shall specify
65-14 that the physician or provider will hold an enrollee harmless for
65-15 payment of the cost of covered health care services in the event
65-16 the health maintenance organization fails to pay the provider for
65-17 health care services.
65-18 (h) A health maintenance organization that conducts or uses
65-19 economic profiling of physicians or providers within the health
65-20 maintenance organization shall make available to a network
65-21 physician or provider on request the economic profile of that
65-22 physician or provider, including the standards by which the
65-23 physician or provider is measured. The use of an economic profile
65-24 must recognize the characteristics of a physician's or provider's
65-25 practice that may account for variations from expected costs.
66-1 (i) A contract between a health maintenance organization and
66-2 a physician or a provider must require the physician or provider to
66-3 post, in the office of the physician or provider, a notice to
66-4 enrollees on the process for resolving complaints with the health
66-5 maintenance organization. The notice must include the Texas
66-6 Department of Insurance's toll-free telephone number for filing
66-7 complaints.
66-8 SECTION 20. Section 19, Texas Health Maintenance
66-9 Organization Act (Article 20A.19, Vernon's Texas Insurance Code),
66-10 is amended to read as follows:
66-11 Sec. 19. Hazardous Financial Condition. (a) Whenever the
66-12 financial condition of any health maintenance organization
66-13 indicates a condition such that the continued operation of the
66-14 health maintenance organization might be hazardous to its
66-15 enrollees, creditors, or the general public, then the commissioner
66-16 [of insurance] may, after notice and opportunity for hearing, order
66-17 the health maintenance organization to take such action as may be
66-18 reasonably necessary to rectify the existing condition, including
66-19 but not necessarily limited to one or more of the following steps:
66-20 (1) to reduce the total amount of present and
66-21 potential liability for benefits by reinsurance;
66-22 (2) to reduce the volume of new business being
66-23 accepted;
66-24 (3) to reduce expenses by specified methods;
66-25 (4) to suspend or limit the writing of new business
67-1 for a period of time;
67-2 (5) to increase the health maintenance organization's
67-3 capital and surplus by contribution; or
67-4 (6) to suspend or revoke the certificate of authority.
67-5 (b) The commissioner [State Board of Insurance] is
67-6 authorized, by rules and regulations, to fix uniform standards and
67-7 criteria for early warning that the continued operation of any
67-8 health maintenance organization might be hazardous to its
67-9 enrollees, creditors, or the general public, and to fix standards
67-10 for evaluating the financial condition of any health maintenance
67-11 organization, which standards shall be consistent with the purposes
67-12 expressed in Subsection (a) of this section.
67-13 SECTION 21. Subsection (a), Section 20, Texas Health
67-14 Maintenance Organization Act (Article 20A.20, Vernon's Texas
67-15 Insurance Code), is amended to read as follows:
67-16 (a) The commissioner may after notice and opportunity for
67-17 hearing (i) suspend or revoke any certificate of authority issued
67-18 to a health maintenance organization under this Act; (ii) impose
67-19 sanctions under Section 7, Article 1.10, Insurance Code;
67-20 (iii) impose administrative penalties under Article 1.10E,
67-21 Insurance Code; or (iv) issue a cease and desist order under
67-22 Article 1.10A, Insurance Code, if the commissioner finds that any
67-23 of the following conditions exist:
67-24 (1) The health maintenance organization is operating
67-25 significantly in contravention of its basic organizational
68-1 documents, or its health care plan, or in a manner contrary to that
68-2 described in and reasonably inferred from any other information
68-3 submitted under Section 4 of this Act.
68-4 (2) The health maintenance organization issues
68-5 evidence of coverage or uses a schedule of charges for health care
68-6 services which does not comply with the requirements of Section 9
68-7 of this Act.
68-8 (3) The health care plan does not provide or arrange
68-9 for basic health care services or the single health care service
68-10 plan does not provide or arrange for a single health care service.
68-11 (4) The [board certifies to the commissioner that:]
68-12 [(A) the] health maintenance organization does
68-13 not meet the requirements of Section 5(a)(1) [5(a)(2)] of this
68-14 Act.[; or]
68-15 (5) The [(B) the] health maintenance organization is
68-16 unable to fulfill its obligation to furnish health care services as
68-17 required under its health care plan or to furnish a single health
68-18 care service as required under its single health care service plan.
68-19 (6) [(5)] The health maintenance organization is no
68-20 longer financially responsible and may be reasonably expected to be
68-21 unable to meet its obligations to enrollees or prospective
68-22 enrollees.
68-23 (7) [(6)] The health maintenance organization has
68-24 failed to implement the complaint system required by Section 12 of
68-25 this Act in a manner to resolve reasonably valid complaints.
69-1 (8) [(7)] The health maintenance organization, or any
69-2 person on its behalf, has advertised or merchandised its services
69-3 in an untrue, misrepresentative, misleading, deceptive, or unfair
69-4 manner.
69-5 (9) [(8)] The continued operation of the health
69-6 maintenance organization would be hazardous to its enrollees.
69-7 (10) [(9)] The health maintenance organization has
69-8 otherwise failed to comply substantially with this Act, and any
69-9 rule and regulation thereunder.
69-10 (11) The health maintenance organization has failed to
69-11 carry out corrective action the commissioner considers necessary to
69-12 correct a failure to comply with this Act, any applicable provision
69-13 of the Insurance Code, or any applicable rule or order of the
69-14 commissioner within 30 days after the date of notice of a
69-15 deficiency or within any longer period of time that the
69-16 commissioner determines to be reasonable and specifies in the
69-17 notice.
69-18 SECTION 22. Section 22, Texas Health Maintenance
69-19 Organization Act (Article 20A.22, Vernon's Texas Insurance Code),
69-20 is amended to read as follows:
69-21 Sec. 22. Rules and Regulations. (a) The commissioner
69-22 [State Board of Insurance] may promulgate such reasonable rules and
69-23 regulations as are necessary and proper to carry out the provisions
69-24 of this Act.
69-25 (b) The commissioner [State Board of Insurance] is
70-1 specifically authorized to promulgate rules to prescribe
70-2 [prescribing] authorized investments for health maintenance
70-3 organizations for all investments for which provision is not
70-4 otherwise made in this Act; to ensure that enrollees have adequate
70-5 access to health care services; and to establish minimum
70-6 physician/patient ratios, mileage requirements for primary and
70-7 specialty care, maximum travel time, and maximum waiting times for
70-8 obtaining appointments. The rulemaking authority provided by this
70-9 subsection does not limit in any manner the rulemaking authority
70-10 granted to the commissioner [State Board of Insurance] under
70-11 Subsection (a) of this section.
70-12 (c) The commissioner may promulgate such reasonable rules
70-13 and regulations as are necessary and proper to meet the
70-14 requirements of federal law and regulations.
70-15 SECTION 23. Section 23, Texas Health Maintenance
70-16 Organization Act (Article 20A.23, Vernon's Texas Insurance Code),
70-17 is amended to read as follows:
70-18 Sec. 23. Appeals. (a) Any person who is affected by any
70-19 rule, ruling, or decision of the Texas Department of Insurance or
70-20 the commissioner [or board] shall have the right to have such rule,
70-21 ruling, or decision reviewed by the commissioner [State Board of
70-22 Insurance] by making an application to the commissioner [State
70-23 Board of Insurance]. Such application shall state the identities
70-24 of the person, the rule, ruling, or decision complained of, the
70-25 interest of the person in such rule, ruling, or decision, the
71-1 grounds of such objection, the action sought of the commissioner
71-2 [State Board of Insurance], and the reasons and grounds for such
71-3 action by the commissioner [State Board of Insurance]. The
71-4 original shall be filed with the chief clerk of the Texas
71-5 Department [State Board] of Insurance together with a certification
71-6 that a true and correct copy of such application has been filed
71-7 with the commissioner. Within 30 days after the application is
71-8 filed, and after 10 days' written notice to all parties of record,
71-9 the commissioner [State Board of Insurance] shall review the action
71-10 complained of in a public hearing and render its decision at the
71-11 earliest possible date thereafter. The commissioner [State Board
71-12 of Insurance] shall make such other rules and regulations with
71-13 respect to such applications and their consideration as it
71-14 considers to be advisable, not inconsistent with this Act. Said
71-15 application shall have precedence over all other business of a
71-16 different nature pending before said commissioner [State Board of
71-17 Insurance].
71-18 (b) In the public hearing, any and all evidence and matters
71-19 pertinent to the appeal may be submitted to the commissioner [State
71-20 Board of Insurance] whether included in the application or not.
71-21 (c) If any person who is affected by any rule, ruling, or
71-22 decision of the commissioner [State Board of Insurance] be
71-23 dissatisfied with any rule, ruling, or decision adopted by the
71-24 commissioner, [board, or State Board of Insurance,] that person,
71-25 after failing to get relief from the commissioner [State Board of
72-1 Insurance], may file a petition seeking review of the rule, ruling,
72-2 or decision and setting forth the particular objection to such
72-3 rule, ruling, or decision, or either or all of them, in a district
72-4 court of Travis County, Texas, and not elsewhere, against the
72-5 commissioner [State Board of Insurance] as defendant. The action
72-6 shall have precedence over all other causes on the docket of a
72-7 different nature. The proceedings on appeal shall be tried and
72-8 determined as provided by Article 1.04, Insurance Code. Either
72-9 party to the action may appeal to the appellate court having
72-10 jurisdiction of the cause and the appeal shall at once be
72-11 returnable to the appellate court having jurisdiction of the cause
72-12 and the action so appealed shall have precedence in the appellate
72-13 court over all causes of a different character therein pending.
72-14 The commissioner [State Board of Insurance] is not required to give
72-15 any appeal bond in any cause arising hereunder.
72-16 SECTION 24. Section 26, Texas Health Maintenance
72-17 Organization Act (Article 20A.26, Vernon's Texas Insurance Code),
72-18 is amended by amending Subdivision (4), Subsection (f), and adding
72-19 Subsection (j) to read as follows:
72-20 (4) Except for Articles 21.07-6 and 21.58A, Insurance
72-21 Code, the insurance laws, including the group hospital service
72-22 corporation law, do not apply to physicians and providers; however,
72-23 [provided that Article 21.58A shall not apply to utilization review
72-24 undertaken by] a physician or provider who conducts utilization
72-25 review during [in] the ordinary course of treatment of patients [by
73-1 a physician or provider] pursuant to a joint or delegated review
73-2 agreement or agreements with a health maintenance organization on
73-3 services rendered by the physician or provider shall not be
73-4 required to obtain certification under Section 3, Article 21.58A,
73-5 Insurance Code.
73-6 (j) This Act applies to a medical school and medical and
73-7 dental unit as defined by Section 61.003, 61.501, or 74.601,
73-8 Education Code, except when such a medical school and medical and
73-9 dental unit contracts to deliver medical care within a health
73-10 maintenance organization delivery network.
73-11 SECTION 25. Section 28, Texas Health Maintenance
73-12 Organization Act (Article 20A.28, Vernon's Texas Insurance Code),
73-13 is amended to read as follows:
73-14 Sec. 28. AUTHORITY TO CONTRACT. The commissioner [or
73-15 board], in carrying out the commissioner's [their] obligations
73-16 under this Act, may contract with other state agencies or, after
73-17 notice and opportunity for hearing, with other qualified persons to
73-18 make recommendations concerning the determinations to be made by
73-19 the commissioner [or board].
73-20 SECTION 26. Section 32, Texas Health Maintenance
73-21 Organization Act (Article 20A.32, Vernon's Texas Insurance Code),
73-22 is amended to read as follows:
73-23 Sec. 32. Fees. (a)(1) Every organization subject to this
73-24 chapter shall pay to the commissioner the following fees:
73-25 (A) for filing and review of its original
74-1 application for a certificate of authority, a fee in an amount not
74-2 to exceed $18,000 [$15,000] as determined by the commissioner
74-3 [State Board of Insurance];
74-4 (B) for filing each annual report pursuant to
74-5 Section 10 of this Act, a fee in an amount not to exceed $500 as
74-6 determined by the commissioner [State Board of Insurance];
74-7 (C) the expenses of all examinations of health
74-8 maintenance organizations made on behalf of the State of Texas by
74-9 the commissioner [State Board of Insurance] or under the
74-10 commissioner's [its] authority in such amounts as the commissioner
74-11 shall certify to be just and reasonable;
74-12 (D) the expenses of an examination under Section
74-13 17(a) of this Act incurred by the commissioner or under the
74-14 commissioner's authority, provided that:
74-15 (i) examination expenses are the expenses
74-16 attributable directly to a specific examination including the
74-17 actual salaries and expenses of the examiners directly attributable
74-18 to that examination as determined under rules adopted by the
74-19 commissioner; and
74-20 (ii) the expenses shall be assessed by the
74-21 commissioner and paid in accordance with rules adopted by the
74-22 commissioner;
74-23 (E) the licensing, appointment, and examination
74-24 fees pursuant to Section 15 of this[, Texas Health Maintenance
74-25 Organization] Act [(Article 20A.15, Vernon's Texas Insurance
75-1 Code)];
75-2 (F) [(E)] for filing an evidence of coverage
75-3 which requires approval, a fee not to exceed $200 as determined by
75-4 the commissioner [State Board of Insurance]; and
75-5 (G) [(F)] for filings required by rule but which
75-6 do not require approval, a fee not to exceed $100 as determined by
75-7 the commissioner [State Board of Insurance].
75-8 (2) The commissioner [State Board of Insurance] shall,
75-9 within the limits fixed by this subsection, prescribe the fees to
75-10 be charged under this subsection.
75-11 (3) Fees collected under this subsection must be
75-12 deposited in the State Treasury to the credit of the Texas
75-13 Department [State Board] of Insurance operating fund.
75-14 (4) Notwithstanding Subdivision (1) of this
75-15 subsection, the comptroller shall collect the annual report filing
75-16 fee prescribed by Subdivision (1)(B) of this subsection.
75-17 (b) [(1) Every organization subject to this chapter shall
75-18 pay to the board the following fees:]
75-19 [(A) for review of its original application for
75-20 a certificate of authority, a fee in an amount not to exceed $3,000
75-21 as determined by the board and paid pursuant to rules adopted by
75-22 the board; and]
75-23 [(B) the expenses of an examination under
75-24 Section 17(b) of this Act incurred by the board or under its
75-25 authority.]
76-1 [(2) Examination expenses are the expenses
76-2 attributable directly to a specific examination including the
76-3 actual salaries and expenses of the examiners plus the cost of
76-4 administrative departmental expenses directly attributable to that
76-5 examination as determined under rules adopted by the board. The
76-6 expenses shall be assessed by the board and paid in accordance with
76-7 rules adopted by the board.]
76-8 [(3) Except as provided by Subdivision (4) of this
76-9 subsection, the amount paid by a health maintenance organization in
76-10 each taxable year under Subdivision (1)(B) of this subsection shall
76-11 be allowed as a credit on the amount of premium taxes to be paid by
76-12 the health maintenance organization for that taxable year.]
76-13 [(4)] The amount directly attributable to an
76-14 examination of the books, records, accounts, or principal offices
76-15 of a health maintenance organization located outside this state may
76-16 not be allowed as a credit against the amount of premium taxes to
76-17 be paid by the health maintenance organization.
76-18 [(5) The funds received by the board shall be
76-19 deposited in the state treasury to the credit of the Texas
76-20 Department of Health health maintenance organization fund, and
76-21 those funds shall be appropriated to the Texas Department of Health
76-22 to carry out the statutory duties of the board under this chapter.]
76-23 SECTION 27. Subsections (a), (b), (c), (e), and (g), Section
76-24 36, Texas Health Maintenance Organization Act (Article 20A.36,
76-25 Vernon's Texas Insurance Code), are amended to read as follows:
77-1 (a) The Health Maintenance Organization Solvency
77-2 Surveillance Committee is created under the direction of the
77-3 commissioner. The committee shall perform its functions under a
77-4 plan of operation approved by the commissioner [State Board of
77-5 Insurance]. The committee is composed of nine members appointed by
77-6 the commissioner [of insurance]. No two members may be employees
77-7 or officers of the same health maintenance organization or holding
77-8 company system. The qualifications for membership, terms of
77-9 office, and reimbursement of expenses shall be as provided by the
77-10 plan of operation approved by the commissioner [State Board of
77-11 Insurance]. A "member" is a Texas licensed health maintenance
77-12 organization as defined in Section 2(n) [2(j)] of this Act or a
77-13 public representative. The commissioner of insurance shall appoint
77-14 the member along with the officer or employee of the member who
77-15 shall serve on the committee if the member is a representative of a
77-16 Texas licensed health maintenance organization or its holding
77-17 company system. Five of the members shall represent health
77-18 maintenance organizations or their holding company system. Of the
77-19 health maintenance organization members, one shall be a single
77-20 health care service plan as defined in Section 2(y) [2(s)] of this
77-21 Act. The remaining health maintenance organization members shall
77-22 be selected by the commissioner [of insurance] with due
77-23 consideration of factors deemed appropriate including, but not
77-24 limited to, the varying categories of premium income and
77-25 geographical location.
78-1 A public representative may not be:
78-2 (1) an officer, director, or employee of a health
78-3 maintenance organization, a health maintenance organization agent,
78-4 or any other business entity regulated by the commissioner [State
78-5 Board of Insurance];
78-6 (2) a person required to register with the Texas
78-7 Ethics Commission [secretary of state] under Chapter 305,
78-8 Government Code; or
78-9 (3) related to a person described by Subdivision (1)
78-10 or (2) of this subsection within the second degree of affinity or
78-11 consanguinity.
78-12 (b)(1) The committee shall assist and advise the
78-13 commissioner relating to the detection and prevention of insolvency
78-14 problems regarding health maintenance organizations. The committee
78-15 shall also assist and advise the commissioner regarding any health
78-16 maintenance organization placed in rehabilitation, liquidation,
78-17 supervision, or conservation. The method of providing this
78-18 assistance and advice shall be as contained in the plan of
78-19 operation approved by the commissioner [State Board of Insurance].
78-20 (2) Reports regarding the financial condition of Texas
78-21 licensed health maintenance organizations and regarding the
78-22 financial condition, administration, and status of health
78-23 maintenance organizations in rehabilitation, liquidation,
78-24 supervision, or conservation shall be provided to the committee
78-25 members at meetings. Committee members shall not reveal the
79-1 condition of nor any information secured in the course of any
79-2 meeting of the Solvency Surveillance Committee with regard to any
79-3 corporation, form or person examined by the committee. Committee
79-4 proceedings shall be filed with the commissioner [and reported to
79-5 the members of the State Board of Insurance].
79-6 (c) To provide funds for the administrative expenses of the
79-7 commissioner [State Board of Insurance] regarding rehabilitation,
79-8 liquidation, supervision, or conservation of an impaired health
79-9 maintenance organization in this state, the committee, at the
79-10 commissioner's direction, shall assess each health maintenance
79-11 organization licensed in this state in the proportion that the
79-12 gross premiums of that health maintenance organization written in
79-13 this state during the preceding calendar year bear to the aggregate
79-14 gross premiums written in this state by all health maintenance
79-15 organizations, as furnished to the committee by the commissioner
79-16 after review of annual statements and other reports the
79-17 commissioner considers necessary. Assessments to supplement or pay
79-18 for administrative expenses of rehabilitation, liquidation,
79-19 supervision, or conservation may be made only after the
79-20 commissioner determines that adequate assets of the health
79-21 maintenance organization are not immediately available for those
79-22 purposes or that use of those assets could be detrimental to
79-23 rehabilitation, liquidation, supervision, or conservation. The
79-24 commissioner may abate or defer the assessments, either in whole or
79-25 in part, if, in the opinion of the commissioner, payment of the
80-1 assessment would endanger the ability of a health maintenance
80-2 organization to fulfill its contractual obligations. If an
80-3 assessment is abated or deferred, either in whole or in part, the
80-4 amount by which the assessment is abated or deferred may be
80-5 assessed against the remaining licensed health maintenance
80-6 organizations in a manner consistent with the basis for assessments
80-7 provided by the plan of operation approved by the commissioner
80-8 [State Board of Insurance]. The total of all assessments on a
80-9 health maintenance organization may not exceed one-quarter of one
80-10 percent of the health maintenance organization's gross premiums in
80-11 any one calendar year.
80-12 (e) Not later than the 180th day after the date on which the
80-13 final member of the committee is appointed, the committee shall
80-14 submit to the commissioner [State Board of Insurance] a plan of
80-15 operation. The plan of operation takes effect on approval in
80-16 writing by the commissioner [State Board of Insurance]. If the
80-17 committee fails to submit a suitable plan of operation within the
80-18 period set by this subsection, or if, after the adoption of a plan,
80-19 the committee fails to submit suitable amendments to the plan, the
80-20 commissioner [State Board of Insurance] may, after notice and
80-21 hearing, adopt rules as necessary to implement this Act. Those
80-22 rules continue in effect until modified by the commissioner [State
80-23 Board of Insurance] or superseded by a plan submitted by the
80-24 committee and approved by the commissioner [State Board of
80-25 Insurance].
81-1 (g) A licensed health maintenance organization or its agents
81-2 or employees, the committee or its agents, employees, or members,
81-3 or the [State Board of Insurance, the] commissioner[,] or the
81-4 commissioner's [their] representatives are not liable in a civil
81-5 action for any act taken or not taken in good faith in the
81-6 performance of powers and duties under this section.
81-7 SECTION 28. The Texas Health Maintenance Organization Act
81-8 (Chapter 20A, Vernon's Texas Insurance Code) is amended by adding
81-9 Sections 37 and 38 to read as follows:
81-10 Sec. 37. HEALTH MAINTENANCE ORGANIZATION QUALITY ASSURANCE.
81-11 (a) A health maintenance organization shall establish procedures
81-12 to assure that the health care services provided to enrollees shall
81-13 be rendered under reasonable standards of quality of care
81-14 consistent with prevailing professionally recognized standards of
81-15 medical practice. Such procedures shall include mechanisms to
81-16 assure availability, accessibility, quality, and continuity of
81-17 care.
81-18 (b) A health maintenance organization shall have an ongoing
81-19 internal quality assurance program to monitor and evaluate its
81-20 health care services, including primary and specialist physician
81-21 services, and ancillary and preventive health care services, in all
81-22 institutional and noninstitutional contexts. The commissioner by
81-23 rule may establish minimum standards and requirements for ongoing
81-24 internal quality assurance programs for health maintenance
81-25 organizations, including but not limited to standards for assuring
82-1 availability, accessibility, quality, and continuity of care.
82-2 (c) A health maintenance organization shall record formal
82-3 proceedings of quality assurance program activities and maintain
82-4 documentation in a confidential manner. Quality assurance program
82-5 minutes shall be available to the commissioner.
82-6 (d) A health maintenance organization shall establish and
82-7 maintain a physician review panel to assist in reviewing medical
82-8 guidelines or criteria and to assist in determining the
82-9 prescription drugs to be covered by the health maintenance
82-10 organization, if the health maintenance organization offers a
82-11 prescription drug benefit.
82-12 (e) A health maintenance organization shall ensure the use
82-13 and maintenance of an adequate patient record system that will
82-14 facilitate documentation and retrieval of clinical information for
82-15 the purpose of the health maintenance organization's evaluation of
82-16 continuity and coordination of patient care and assessment of the
82-17 quality of health and medical care provided to enrollees.
82-18 (f) Enrollees' clinical records shall be available to the
82-19 commissioner for examination and review to determine compliance.
82-20 Such records are confidential and privileged, and are not subject
82-21 to the open records law, Chapter 552, Government Code, or to
82-22 subpoena, except to the extent necessary to enable the commissioner
82-23 to enforce this article.
82-24 (g) A health maintenance organization shall establish a
82-25 mechanism for the periodic reporting of quality assurance program
83-1 activities to its governing body, providers, and appropriate
83-2 organization staff.
83-3 Sec. 38. EFFECT OF DENTAL POINT-OF-SERVICE OPTION ON HEALTH
83-4 MAINTENANCE ORGANIZATION. (a) Each dental health maintenance
83-5 organization or other single service health maintenance
83-6 organization that provides dental benefits is subject to this
83-7 section. This section does not apply to a health maintenance
83-8 organization with 10,000 or fewer enrollees in this state enrolled
83-9 in dental benefit plans based on a provider panel.
83-10 (b) If an employer, association, or other private group
83-11 arrangement that employs or has 25 or more employees or members
83-12 offers and contributes to the cost of dental benefit plan coverage
83-13 to employees or individuals only through a provider panel, the
83-14 health maintenance organization with which the employer,
83-15 association, or other private group arrangement is contracting for
83-16 the coverage shall offer, or contract with another entity to offer,
83-17 a dental point-of-service option to the employer, association, or
83-18 other private group arrangement. The employer may offer the dental
83-19 point-of-service option to the employee or individual to accept or
83-20 reject.
83-21 (c) If a health maintenance organization's dental provider
83-22 panel is the sole delivery system offered to employees by an
83-23 employer, the health maintenance organization:
83-24 (1) shall offer the employer a dental point-of-service
83-25 option;
84-1 (2) may not impose a minimum participation level on
84-2 the dental point-of-service option; and
84-3 (3) as part of the group enrollment application, shall
84-4 provide to each employer disclosure statements as required by rules
84-5 adopted under this code for each dental plan offered.
84-6 (d) An employer may require an employee or individual who
84-7 accepts the point-of-service option to be responsible for the
84-8 payment of a premium over the amount of the premium for the
84-9 coverage provided to employees or members under the dental benefit
84-10 plan offered through a provider panel either directly or by payroll
84-11 deduction in the same manner in which the other premium is paid.
84-12 The premium for the point-of-service option must be based on the
84-13 actuarial value of that coverage.
84-14 (e) Different cost-sharing provisions may be imposed for the
84-15 point-of-service option.
84-16 (f) An employer may charge an employee or individual who
84-17 accepts the point-of-service option a reasonable administrative fee
84-18 for costs associated with the employer's reasonable administration
84-19 of the point-of-service option.
84-20 (g) For purposes of this section:
84-21 (1) "Point-of-service option" means a plan provided
84-22 through a contractual arrangement under which indemnity benefits
84-23 for the cost of dental care services, other than emergency care or
84-24 emergency dental care, are provided by an insurer or group hospital
84-25 service corporation in conjunction with corresponding benefits
85-1 arranged or provided by a health maintenance organization, and
85-2 under which an enrollee may choose to obtain benefits or services
85-3 under either the indemnity plan or the health maintenance
85-4 organization plan in accordance with specific provisions of a
85-5 point-of-service contract.
85-6 (2) "Provider panel" means those providers with which
85-7 a health maintenance organization contracts to provide dental
85-8 services to enrollees covered under the dental benefit plan.
85-9 SECTION 29. This Act takes effect September 1, 1997.
85-10 SECTION 30. The importance of this legislation and the
85-11 crowded condition of the calendars in both houses create an
85-12 emergency and an imperative public necessity that the
85-13 constitutional rule requiring bills to be read on three several
85-14 days in each house be suspended, and this rule is hereby suspended.
S.B. No. 385
________________________________ ________________________________
President of the Senate Speaker of the House
I hereby certify that S.B. No. 385 passed the Senate on
March 11, 1997, by a viva-voce vote; May 28, 1997, Senate refused
to concur in House amendments and requested appointment of
Conference Committee; May 29, 1997, House granted request of the
Senate; June 1, 1997, Senate adopted Conference Committee Report by
a viva-voce vote.
_______________________________
Secretary of the Senate
I hereby certify that S.B. No. 385 passed the House, with
amendments, on May 26, 1997, by a non-record vote; May 29, 1997,
House granted request of the Senate for appointment of Conference
Committee; June 1, 1997, House adopted Conference Committee Report
by a non-record vote.
_______________________________
Chief Clerk of the House
Approved:
________________________________
Date
________________________________
Governor