75R12763 PB-F
By Sibley S.B. No. 385
Substitute the following for S.B. No. 385:
By Smithee C.S.S.B. No. 385
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the regulation of health maintenance organizations.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. Section 2, Texas Health Maintenance Organization
1-5 Act (Article 20A.02, Vernon's Texas Insurance Code), is amended to
1-6 read as follows:
1-7 Sec. 2. DEFINITIONS. For the purposes of this Act:
1-8 (a) "Adverse determination" means a determination by a
1-9 health maintenance organization or a utilization review agent that
1-10 the health care services furnished to a patient or proposed to be
1-11 furnished to a patient are not medically necessary or not
1-12 appropriate in the allocation of health care resources.
1-13 (b) "Basic health care services" means health care services
1-14 which the commissioner determines an enrolled population might
1-15 reasonably require in order to be maintained in good health,
1-16 including, at [as] a minimum, services designated as basic health
1-17 services under Section 1302, Title XIII, Public Health Service Act
1-18 (42 U.S.C. Section 300e-1(1)) [emergency care, inpatient hospital
1-19 and medical services, and outpatient medical services].
1-20 [(b) "Board" means the Texas Board of Health.]
1-21 (c) "Capitation" means a method of compensation to a
1-22 physician or provider based on a predetermined payment per enrollee
1-23 for a specified period for certain enrollees in exchange for
1-24 arranging for or providing a defined set of covered health care
2-1 services to those enrollees for a specified period, regardless of
2-2 the amount of services actually provided.
2-3 (d) "Commissioner" means the commissioner of insurance.
2-4 (e) "Complainant" means an enrollee, or a physician,
2-5 provider, or other person designated to act on behalf of an
2-6 enrollee, who files a complaint.
2-7 (f) "Complaint" means any dissatisfaction, expressed by a
2-8 complainant orally or in writing to the health maintenance
2-9 organization, with any aspect of the health maintenance
2-10 organization's operation, including dissatisfaction expressed by a
2-11 complainant with the plan administration, appeal of an adverse
2-12 determination, the denial, reduction, or termination of a service,
2-13 the way a service is provided, or disenrollment decisions. A
2-14 complaint is not a misunderstanding or a problem of misinformation
2-15 that is resolved promptly by clearing up the misunderstanding or
2-16 supplying the appropriate information to the satisfaction of the
2-17 enrollee.
2-18 (g) "Emergency care" means health care services provided in
2-19 a hospital emergency facility or comparable facility to evaluate
2-20 and stabilize medical conditions of recent onset and severity,
2-21 including severe pain, that would lead a prudent layperson,
2-22 possessing an average knowledge of medicine and health, to believe
2-23 that his or her condition, sickness, or injury is of such a nature
2-24 that failure to get immediate medical care could result in:
2-25 (1) placing the patient's health in serious jeopardy;
2-26 (2) serious impairment to bodily functions;
2-27 (3) serious dysfunction of any bodily organ or part;
3-1 (4) serious disfigurement; or
3-2 (5) in the case of a pregnant woman, serious jeopardy
3-3 to the health of the fetus.
3-4 (h) [(d)] "Enrollee" means an individual who is enrolled in
3-5 a health care plan, including covered dependents.
3-6 (i) [(e)] "Evidence of coverage" means any certificate,
3-7 agreement, or contract issued to an enrollee setting out the
3-8 coverage to which the enrollee is entitled.
3-9 (j) [(f)] "Group hospital service corporation" means a
3-10 nonprofit corporation organized and operating under Chapter 20 of
3-11 the Insurance Code.
3-12 (k) [(g)] "Health care" means prevention, maintenance,
3-13 rehabilitation, pharmaceutical, mental health, and chiropractic
3-14 services provided by qualified persons, other than medical care.
3-15 (l) [(h)] "Health care plan" means any plan whereby any
3-16 person undertakes to provide, arrange for, pay for, or reimburse
3-17 any part of the cost of any health care services; provided,
3-18 however, a part of such plan consists of arranging for or the
3-19 provision of health care services, as distinguished from
3-20 indemnification against the cost of such service, on a prepaid
3-21 basis through insurance or otherwise.
3-22 (m) [(i)] "Health care services" means any services,
3-23 including the furnishing to any individual of pharmaceutical
3-24 services, medical, chiropractic, mental health, or dental care, or
3-25 hospitalization or incident to the furnishing of such services,
3-26 care, or hospitalization, as well as the furnishing to any person
3-27 of any and all other services for the purpose of preventing,
4-1 alleviating, curing or healing human illness or injury or a single
4-2 health care service plan.
4-3 (n) [(j)] "Health maintenance organization" means any person
4-4 who arranges for or provides a health care plan or a single health
4-5 care service plan to enrollees on a prepaid basis.
4-6 (o) "Life-threatening" means a disease or condition for
4-7 which the likelihood of death is probable unless the course of the
4-8 disease or condition is interrupted.
4-9 (p) [(k)] "Medical care" means furnishing those services
4-10 defined as practicing medicine under Section 1.03(8), Medical
4-11 Practice Act (Article 4495b, Vernon's Texas Civil Statutes).
4-12 (q) [(l)] "Person" means any natural or artificial person,
4-13 including, but not limited to, individuals, partnerships,
4-14 associations, organizations, trusts, hospital districts, limited
4-15 liability companies, limited liability partnerships, or
4-16 corporations.
4-17 (r) [(m)] "Physician" means:
4-18 (1) an individual licensed to practice medicine in
4-19 this state;
4-20 (2) a professional association organized under the
4-21 Texas Professional Association Act (Article 1528f, Vernon's Texas
4-22 Civil Statutes);
4-23 (3) a medical school or medical and dental unit, as
4-24 described by Section 61.003, 61.501, or 74.601, Education Code,
4-25 that employs or contracts with physicians to teach or provide
4-26 medical services or employs physicians and contracts with
4-27 physicians in a practice plan;
5-1 (4) [or] a nonprofit health corporation certified
5-2 under Section 5.01, Medical Practice Act (Article 4495b, Vernon's
5-3 Texas Civil Statutes); or
5-4 (5) [(3)] another person wholly owned by physicians.
5-5 (s) "Prospective enrollee" means:
5-6 (1) in the case of an individual who is a member of a
5-7 group, an individual eligible for enrollment in a health
5-8 maintenance organization purchased through that individual's group;
5-9 or
5-10 (2) in the case of an individual who is not a member
5-11 of a group or whose group has not purchased or does not intend to
5-12 purchase a health maintenance organization plan, an individual who
5-13 has expressed an interest in purchasing individual health
5-14 maintenance organization coverage and who is eligible for coverage
5-15 by the health maintenance organization.
5-16 (t) [(n)] "Provider" means:
5-17 (1) any person other than a physician, including a
5-18 licensed doctor of chiropractic, registered nurse, pharmacist,
5-19 optometrist, registered optician, pharmacy, hospital, or other
5-20 institution or organization or person that is licensed or otherwise
5-21 authorized to provide a health care service in this state;
5-22 (2) a person who is wholly owned or controlled by a
5-23 provider or by a group of providers who are licensed to provide the
5-24 same health care service; or
5-25 (3) a person who is wholly owned or controlled by one
5-26 or more hospitals and physicians, including a physician-hospital
5-27 organization.
6-1 (u) [(o)] "Sponsoring organization" means a person who
6-2 guarantees the uncovered expenses of the health maintenance
6-3 organization and who is financially capable, as determined by the
6-4 commissioner, of meeting the obligations resulting from those
6-5 guarantees.
6-6 (v) [(p)] "Uncovered expenses" means the estimated
6-7 administrative expenses and the estimated cost of health care
6-8 services that are not guaranteed, insured, or assumed by a person
6-9 other than the health maintenance organization. Health care
6-10 services may be considered covered if the physician or provider
6-11 agrees in writing that enrollees shall in no way be liable,
6-12 assessable, or in any way subject to payment for services except as
6-13 described in the evidence of coverage issued to the enrollee under
6-14 Section 9 of this Act. The amount due on loans in the next
6-15 calendar year will be considered uncovered expenses unless
6-16 specifically subordinated to uncovered medical and health care
6-17 expenses or unless guaranteed by the sponsoring organization.
6-18 (w) [(q)] "Uncovered liabilities" means obligations
6-19 resulting from unpaid uncovered expenses, the outstanding
6-20 indebtedness of loans that are not specifically subordinated to
6-21 uncovered medical and health care expenses or guaranteed by the
6-22 sponsoring organization, and all other monetary obligations that
6-23 are not similarly subordinated or guaranteed.
6-24 (x) [(r)] "Single health care service" means a health care
6-25 service that an enrolled population may reasonably require in order
6-26 to be maintained in good health with respect to a particular health
6-27 care need for the purpose of preventing, alleviating, curing, or
7-1 healing human illness or injury of a single specified nature and
7-2 that is to be provided by one or more persons each of whom is
7-3 licensed by the state to provide that specific health care service.
7-4 (y) [(s)] "Single health care service plan" means a plan
7-5 under which any person undertakes to provide, arrange for, pay for,
7-6 or reimburse any part of the cost of a single health care service,
7-7 provided, that a part of the plan consists of arranging for or the
7-8 provision of the single health care service, as distinguished from
7-9 an indemnification against the cost of that service, on a prepaid
7-10 basis through insurance or otherwise and that no part of that plan
7-11 consists of arranging for the provision of more than one health
7-12 care need of a single specified nature.
7-13 (z) [(t) "Emergency care" means bona fide emergency services
7-14 provided after the sudden onset of a medical condition manifesting
7-15 itself by acute symptoms of sufficient severity, including severe
7-16 pain, such that the absence of immediate medical attention could
7-17 reasonably be expected to result in:]
7-18 [(1) placing the patient's health in serious jeopardy;]
7-19 [(2) serious impairment to bodily functions; or]
7-20 [(3) serious dysfunction of any bodily organ or part.]
7-21 [(u)] "Health maintenance organization delivery network"
7-22 means a health care delivery system in which a health maintenance
7-23 organization arranges for health care services directly or
7-24 indirectly through contracts and subcontracts with providers and
7-25 physicians.
7-26 SECTION 2. Section 3, Texas Health Maintenance Organization
7-27 Act (Article 20A.03, Vernon's Texas Insurance Code), is amended by
8-1 adding Subsections (e), (f), (g), and (h) to read as follows:
8-2 (e) A person, physician, or provider may not perform any of
8-3 the acts of a health maintenance organization, as defined by this
8-4 Act, except as provided by and in accordance with the specific
8-5 authorization of this Act or other law.
8-6 (f) A person, physician, or provider who performs any of the
8-7 acts of a health maintenance organization that require a
8-8 certificate of authority under this Act without having first
8-9 obtained a certificate of authority from the Texas Department of
8-10 Insurance is subject to all enforcement processes and procedures
8-11 available against an unauthorized insurer under Articles 1.14-1 and
8-12 1.19-1, Insurance Code.
8-13 (g) Subsections (e) and (f) of this section do not apply to
8-14 an activity exempt from regulation under Section 26(f) of this Act.
8-15 (h) The commissioner may exercise subpoena authority in
8-16 accordance with Article 1.19-1, Insurance Code, in implementing
8-17 this Act.
8-18 SECTION 3. Section 4, Texas Health Maintenance Organization
8-19 Act (Article 20A.04, Vernon's Texas Insurance Code), is amended to
8-20 read as follows:
8-21 Sec. 4. APPLICATION FOR CERTIFICATE OF AUTHORITY. (a) Each
8-22 application for a certificate of authority shall be on a form
8-23 prescribed by rule of the commissioner and shall be verified by the
8-24 applicant, an officer, or other authorized representative of the
8-25 applicant, and shall set forth or be accompanied by the following:
8-26 (1) a copy of the basic organizational document, if
8-27 any, of the applicant, such as the articles of incorporation,
9-1 articles of association, partnership agreement, trust agreement, or
9-2 other applicable documents, and all amendments thereto;
9-3 (2) a copy of the bylaws, rules and regulations, or
9-4 similar document, if any, regulating the conduct of the internal
9-5 affairs of the applicant;
9-6 (3) a list of the names, addresses, and official
9-7 positions of the persons who are to be responsible for the conduct
9-8 of the affairs of the applicant, including all members of the board
9-9 of directors, board of trustees, executive committee, or other
9-10 governing body or committee, the principal officer in the case of a
9-11 corporation, and the partnership or members in the case of a
9-12 partnership or association;
9-13 (4) a copy of any independent or other contract made
9-14 or to be made between any provider, physician, or persons listed in
9-15 Paragraph (3) hereof and the applicant;
9-16 (5) a copy of the form of evidence of coverage to be
9-17 issued to the enrollee;
9-18 (6) a copy of the form of the group contract, if any,
9-19 which is to be issued to employers, unions, trustees, or other
9-20 organizations;
9-21 (7) a current financial statement that includes:
9-22 (A) the sources and application of funds;
9-23 (B) projected financial statements during the
9-24 initial period of operations;
9-25 (C) a balance sheet beginning as of the date of
9-26 the expected start of operations;
9-27 (D) a statement of revenue and expenses with
10-1 expected member months; and
10-2 (E) a cash flow statement that states any
10-3 capital expenditures, purchase and sale of investments, and
10-4 deposits with the state;
10-5 (8) the schedule of charges to be used during the
10-6 first 12 months of operation;
10-7 (9) a statement acknowledging that all lawful process
10-8 in any legal action or proceeding against the health maintenance
10-9 organization on a cause of action arising in this state is valid if
10-10 served in accordance with Article 1.36, Insurance Code;
10-11 (10) a statement reasonably describing the geographic
10-12 area or areas to be served;
10-13 (11) a description of the complaint procedures to be
10-14 utilized;
10-15 (12) a description of the procedures and programs to
10-16 be implemented to meet the quality of health care requirements set
10-17 forth herein; [and]
10-18 (13) a written description of health care plan terms
10-19 and conditions made available to any current or prospective group
10-20 contract holder or current or prospective enrollee of the health
10-21 maintenance organization under the requirements of Section 11 of
10-22 this Act;
10-23 (14) network configuration information, including an
10-24 explanation of the adequacy of the physician and other provider
10-25 network configuration; the information provided must include the
10-26 names of physicians, specialty physicians, and other providers by
10-27 zip code or zip code map and indicate whether each physician or
11-1 other provider is accepting new patients from the health
11-2 maintenance organization;
11-3 (15) a written description of the types of
11-4 compensation arrangements, such as compensation based on
11-5 fee-for-service arrangements, risk-sharing arrangements, or
11-6 capitated risk arrangements, made or to be made with physicians and
11-7 providers in exchange for the provision of or an arrangement to
11-8 provide health care services to enrollees, including any financial
11-9 incentives for physicians and providers; those compensation
11-10 arrangements are confidential and are not subject to the open
11-11 records law, Chapter 552, Government Code;
11-12 (16) documentation demonstrating that the health
11-13 maintenance organization will pay for emergency care services
11-14 performed by non-network physicians or providers and that the
11-15 health care plan contains, without regard to whether the physician
11-16 or provider furnishing the services has a contractual or other
11-17 arrangement with the entity to provide items or services to covered
11-18 individuals, the following provisions and procedures for coverage
11-19 of emergency care services:
11-20 (A) any medical screening examination or other
11-21 evaluation required by state or federal law that is necessary to
11-22 determine whether an emergency medical condition exists will be
11-23 provided to covered enrollees in a hospital emergency facility or
11-24 comparable facility;
11-25 (B) necessary emergency care services will be
11-26 provided to covered enrollees, including the treatment and
11-27 stabilization of an emergency medical condition; and
12-1 (C) services originated in a hospital emergency
12-2 facility or comparable facility following treatment or
12-3 stabilization of an emergency medical condition will be provided to
12-4 covered enrollees as approved by the health maintenance
12-5 organization, provided that the health maintenance organization is
12-6 required to approve or deny coverage of poststabilization care as
12-7 requested by a treating physician or provider within the time
12-8 appropriate to the circumstances relating to the delivery of the
12-9 services and the condition of the patient, but in no case to exceed
12-10 one hour from the time of the request; the health maintenance
12-11 organization must respond to inquiries from the treating physician
12-12 or provider in compliance with this provision in the health
12-13 maintenance organization's plan; and
12-14 (17) such other information as the commissioner may
12-15 require to make the determinations required by this Act.
12-16 (b) The commissioner [State Board of Insurance] may
12-17 promulgate such reasonable rules and regulations as the
12-18 commissioner [it] deems necessary to the proper administration of
12-19 this Act to require a health maintenance organization, subsequent
12-20 to receiving its certificate of authority, to submit the
12-21 modifications or amendments to the operations or documents
12-22 described in Subsection (a) of this section to the commissioner,
12-23 either for the commissioner's [his] approval or for information
12-24 only, prior to the effectuation of the modification or amendment or
12-25 to require the health maintenance organization to indicate the
12-26 modifications to [both the board and] the commissioner at the time
12-27 of the next site visit or examination. As soon as reasonably
13-1 possible after any filing for approval required by this subsection
13-2 is made, the commissioner shall in writing approve or disapprove
13-3 it. Any modification or amendment for which the commissioner's
13-4 approval is required shall be considered approved unless
13-5 disapproved within 30 days; provided that the commissioner may
13-6 postpone the action for such further time, not exceeding an
13-7 additional 30 days, as necessary for proper consideration.
13-8 SECTION 4. Section 5, Texas Health Maintenance Organization
13-9 Act (Article 20A.05, Vernon's Texas Insurance Code), is amended to
13-10 read as follows:
13-11 Sec. 5. ISSUANCE OF CERTIFICATE OF AUTHORITY. (a)[(1) Upon
13-12 receipt of an application for issuance of a certificate of
13-13 authority, the commissioner shall begin consideration of the
13-14 application and forthwith transmit copies of such application and
13-15 accompanying documents to the board.]
13-16 [(2) The board shall determine whether the applicant
13-17 for a certificate of authority, with respect to health care
13-18 services to be furnished:]
13-19 [(A) has demonstrated the willingness and
13-20 potential ability to assure that such health care services will be
13-21 provided in a manner to assure both availability and accessibility
13-22 of adequate personnel and facilities, in a manner enhancing
13-23 availability, accessibility, and continuity of services;]
13-24 [(B) has arrangements, established in accordance
13-25 with rules and regulations promulgated by the board with the
13-26 concurrence of the commissioner, for an ongoing quality of health
13-27 care assurance program concerning health care processes and
14-1 outcome; and]
14-2 [(C) has a procedure, established by rules and
14-3 regulations of the board with the concurrence of the commissioner,
14-4 to develop, compile, evaluate, and report statistics relating to
14-5 the cost of operation, the pattern of utilization of its services,
14-6 availability and accessibility of its services.]
14-7 [(3) Within 45 days of receipt of the application by
14-8 the board for issuance of a certificate of authority, the board
14-9 shall certify to the commissioner whether the proposed health
14-10 maintenance organization meets the requirements of this section.
14-11 If the board certifies that the health maintenance organization
14-12 does not meet such requirements, it shall specify in what respects
14-13 it is deficient.]
14-14 [(b)] The commissioner shall, after notice and hearing,
14-15 issue or deny a certificate of authority to any person filing an
14-16 application pursuant to Section 4 of this Act, within 75 days of
14-17 the receipt of a completed application [the certification of the
14-18 board]; provided, however, that if notice and the opportunity for a
14-19 hearing is involved in a particular issuance or denial, then the
14-20 matter must be scheduled for a hearing within 75 days of the
14-21 receipt of a completed application. In any event, the commissioner
14-22 may grant a delay of final action on the application to an
14-23 applicant. Issuance of the certificate of authority shall be
14-24 granted upon payment of the application fee prescribed in Section
14-25 32 of this Act if the commissioner is satisfied that:
14-26 (1) the applicant for a certificate of authority, with
14-27 respect to health care services to be furnished:
15-1 (A) has demonstrated the willingness and
15-2 potential ability to ensure that those health care services will be
15-3 provided in a manner to ensure both availability and accessibility
15-4 of adequate personnel and facilities, in a manner enhancing
15-5 availability, accessibility, quality of care, and continuity of
15-6 services;
15-7 (B) has arrangements, established in accordance
15-8 with rules and regulations promulgated by the commissioner, for an
15-9 ongoing quality of health care assurance program concerning health
15-10 care processes and outcome; and
15-11 (C) has a procedure, established by rules and
15-12 regulations adopted by the commissioner, to develop, compile,
15-13 evaluate, and report statistics relating to the cost of operation,
15-14 the pattern of utilization of its services, and availability and
15-15 accessibility of its services; [board certifies that the health
15-16 maintenance organization's proposed plan of operation meets the
15-17 requirements of Subsection (a)(2) of this section; and]
15-18 (2) [the commissioner is satisfied that:]
15-19 [(A)] the person responsible for the conduct of
15-20 the affairs of the applicant is competent, trustworthy, and
15-21 possesses a good reputation;
15-22 (3) [(B)] the health care plan or single health care
15-23 service plan constitutes an appropriate mechanism whereby the
15-24 health maintenance organization will effectively provide or arrange
15-25 for the provision of basic health care services or single health
15-26 care service on a prepaid basis, through insurance or otherwise,
15-27 except to the extent of reasonable requirements for co-payment;
16-1 (4) [(C)] the health maintenance organization is fully
16-2 responsible and may reasonably be expected to meet its obligations
16-3 to enrollees and prospective enrollees, provided that in[. In]
16-4 making this determination, the commissioner shall consider:
16-5 (A) [(i)] the financial soundness of the health
16-6 care plan's arrangement for health care services and a schedule of
16-7 charges used in connection therewith;
16-8 (B) [(ii)] the adequacy of working capital;
16-9 (C) [(iii)] any agreement with an insurer, group
16-10 hospital service corporation, a political subdivision of
16-11 government, or any other organization for insuring the payment of
16-12 the cost of health care services or the provision for automatic
16-13 applicability of an alternative coverage in the event of
16-14 discontinuance of plan;
16-15 (D) [(iv)] any agreement which provides for the
16-16 provision of health care services; and
16-17 (E) [(v)] any deposit of cash or securities
16-18 submitted in accordance with Section 13 of this Act as a guarantee
16-19 that the obligations will be duly performed; and
16-20 (5) [(D)] nothing in the proposed method of operation,
16-21 as shown by the information submitted pursuant to Section 4 of this
16-22 Act, or by independent investigation, is contrary to Texas law.
16-23 (b) [(c)] If [the board or] the commissioner[, or both,]
16-24 shall certify that the health maintenance organization's proposed
16-25 plan of operation does not meet the requirements of this section,
16-26 the commissioner shall not issue the certificate of authority. The
16-27 commissioner shall notify the applicant that it is deficient[,] and
17-1 shall specify in what respects it is deficient.
17-2 (c) [(d)] A certificate of authority shall continue in force
17-3 as long as the person to whom it is issued meets the requirements
17-4 of this Act or until suspended or revoked by the commissioner or
17-5 terminated at the request of the certificate holder. Any change in
17-6 control, as defined by Article 21.49--1 of the Insurance Code [of
17-7 Texas], of the health maintenance organization, shall be subject to
17-8 the approval of the commissioner.
17-9 SECTION 5. Section 9, Texas Health Maintenance Organization
17-10 Act (Article 20A.09, Vernon's Texas Insurance Code), as amended by
17-11 Chapters 1091 and 1096, Acts of the 70th Legislature, Regular
17-12 Session, 1987, is amended to read as follows:
17-13 Sec. 9. EVIDENCE OF COVERAGE AND CHARGES. (a)(1) Every
17-14 enrollee residing in this state is entitled to evidence of coverage
17-15 under a health care plan. If the enrollee obtains coverage under a
17-16 health care plan through an insurance policy or a contract issued
17-17 by a group hospital service corporation, whether by option or
17-18 otherwise, the insurer or the group hospital service corporation
17-19 shall issue the evidence of coverage. Otherwise, the health
17-20 maintenance organization shall issue the evidence of coverage.
17-21 (2) No evidence of coverage, or amendment thereto,
17-22 shall be issued or delivered to any person in this state until a
17-23 copy of the form of evidence of coverage, or amendment thereto, has
17-24 been filed with and approved by the commissioner.
17-25 (3) An evidence of coverage shall contain:
17-26 (A) no provisions or statements which are
17-27 unjust, unfair, inequitable, misleading, deceptive, which encourage
18-1 misrepresentation, or which are untrue, misleading, or deceptive as
18-2 defined in Section 14 of this Act; [and]
18-3 (B) a clear and complete statement, if a
18-4 contract, or a reasonably complete facsimile, if a certificate, of:
18-5 (i) the medical, health care services, or
18-6 single health care service and the issuance of other benefits, if
18-7 any, to which the enrollee is entitled under the health care plan
18-8 or single health care service plan;
18-9 (ii) any limitation on the services, kinds
18-10 of services, benefits, or kinds of benefits to be provided,
18-11 including any deductible or co-payment feature;
18-12 (iii) where and in what manner information
18-13 is available as to how services may be obtained; and
18-14 (iv) a clear and understandable
18-15 description of the health maintenance organization's methods for
18-16 resolving enrollee complaints. Any subsequent changes may be
18-17 evidenced in a separate document issued to the enrollee;
18-18 (C) a provision that, if medically necessary
18-19 covered services are not available through network physicians or
18-20 providers, the health maintenance organization must, on the request
18-21 of a network physician or provider, within a reasonable period,
18-22 allow referral to a non-network physician or provider and shall
18-23 fully reimburse the non-network physician or provider; each
18-24 contract must further provide for a review by a specialist of the
18-25 same, or a similar, specialty as the physician or provider to whom
18-26 a referral is requested before the health maintenance organization
18-27 may deny a referral;
19-1 (D) a provision to allow enrollees with chronic,
19-2 disabling, or life-threatening illnesses to apply to the health
19-3 maintenance organization's medical director to use a nonprimary
19-4 care physician specialist as a primary care physician, provided
19-5 that:
19-6 (i) the request includes information
19-7 specified by the health maintenance organization, including
19-8 certification of medical need, and is signed by the enrollee and
19-9 the nonprimary care physician specialist interested in serving as
19-10 the primary care physician;
19-11 (ii) the nonprimary care physician
19-12 specialist meets the health maintenance organization's requirements
19-13 for primary care physician participation; and
19-14 (iii) the nonprimary care physician
19-15 specialist is willing to accept the coordination of all of the
19-16 enrollee's health care needs;
19-17 (E) a provision that if the request for special
19-18 consideration specified by Paragraph (D) of this subdivision is
19-19 denied, an enrollee may appeal the decision through the health
19-20 maintenance organization's established complaint and appeals
19-21 process; and
19-22 (F) a provision that the effective date of the
19-23 new designation of a nonprimary care physician specialist as
19-24 provided by Paragraph (D) of this subdivision may not be
19-25 retroactive; the health maintenance organization may not reduce the
19-26 amount of compensation owed to the original primary care physician
19-27 prior to the date of the new designation.
20-1 (4) If an evidence of coverage provides benefits for
20-2 rehabilitation services and therapies, the provision of those
20-3 services and therapies that, in the opinion of a physician, are
20-4 medically necessary may not be denied, limited, or terminated by a
20-5 health maintenance organization based on a determination that the
20-6 rehabilitation services and therapies are not resulting, or will
20-7 not result, in significant improvement in the enrollee's condition.
20-8 (5) Any form of the evidence of coverage or group
20-9 contract to be used in this state, and any amendments thereto, are
20-10 subject to the filing and approval requirements of Subsection (c)
20-11 of this section, unless it is subject to the jurisdiction of the
20-12 commissioner under the laws governing health insurance or group
20-13 hospital service corporations, in which event the filing and
20-14 approval provisions of such law shall apply. To the extent,
20-15 however, that such provisions do not apply to the requirements of
20-16 Subdivision (3)[, Subsection (a)] of this subsection [section], the
20-17 requirements of Subdivision (3) shall be applicable.
20-18 (b) The formula or method for calculating the schedule of
20-19 charges for enrollee coverage for medical services or health care
20-20 services must be filed with the commissioner before it is used in
20-21 conjunction with any health care plan. The formula or method must
20-22 be established in accordance with actuarial principles for the
20-23 various categories of enrollees. The charges resulting from the
20-24 application of the formula or method may not be altered for an
20-25 individual enrollee based on the status of that enrollee's health.
20-26 The formula or method must produce charges that are not excessive,
20-27 inadequate, or unfairly discriminatory, and benefits must be
21-1 reasonable with respect to the rates produced by the formula or
21-2 method. A statement by a qualified actuary that certifies the
21-3 appropriateness of the formula or method must accompany the filing
21-4 together with supporting information considered adequate by the
21-5 commissioner.
21-6 (c) The commissioner shall, within a reasonable period,
21-7 approve any form of the evidence of coverage or group contract, or
21-8 amendment thereto, if the requirements of this section are met.
21-9 After notice and opportunity for hearing, the commissioner may
21-10 withdraw previous approval of any form, if the commissioner
21-11 determines that it violates or does not comply with this Act or a
21-12 rule adopted by the commissioner [State Board of Insurance]. It
21-13 shall be unlawful to issue such form until approved. If the
21-14 commissioner disapproves such form, the commissioner shall notify
21-15 the filer. In the notice, the commissioner shall specify the
21-16 reason for the disapproval. A hearing shall be granted within 30
21-17 days after a request in writing by the person filing. If the
21-18 commissioner does not disapprove any form within 30 days after the
21-19 filing of such form it shall be considered approved; provided that
21-20 the commissioner may by written notice extend the period for
21-21 approval or disapproval of any filing for such further time, not
21-22 exceeding an additional 30 days, as necessary for proper
21-23 consideration of the filing.
21-24 (d) The commissioner may require the submission of whatever
21-25 relevant information the commissioner considers [he or she deems]
21-26 necessary in determining whether to approve or disapprove a filing
21-27 made pursuant to this section.
22-1 (e) Article 3.74 of the Texas Insurance Code applies to
22-2 health maintenance organizations other than those health
22-3 maintenance organizations offering only a single health care
22-4 service plan.
22-5 (f) Article 3.51-9 of the [Texas] Insurance Code applies to
22-6 health maintenance organizations other than those health
22-7 maintenance organizations offering only a single health care
22-8 service plan.
22-9 (g) Evidence of coverage does not constitute a health
22-10 insurance policy as that term is defined by the Insurance Code.
22-11 (h) Article 3.70-1(F)(5) of the Insurance Code applies to
22-12 health maintenance organizations other than those health
22-13 maintenance organizations offering only a single health care
22-14 service plan.
22-15 (i) [(h)] Article 3.72 of the Insurance Code applies to
22-16 health maintenance organizations to the extent that such article is
22-17 not in conflict with this Act and to the extent that the
22-18 residential treatment center or crisis stabilization unit is
22-19 located within the service area of the health maintenance
22-20 organization and subject to such inspection and review as required
22-21 by this Act or the rules hereunder.
22-22 (j) [(i)] A health maintenance organization shall comply
22-23 with Article 21.55 of the Insurance Code with respect to prompt
22-24 payment to enrollees [this code applies to out-of-area or emergency
22-25 claims for which benefits are not assigned or payment is not made
22-26 directly to the physician or provider]. A health maintenance
22-27 organization shall make payment to a physician or provider for
23-1 covered services rendered to enrollees of the health maintenance
23-2 organization not later than the 45th day after the date a claim for
23-3 payment is received with documentation reasonably necessary for the
23-4 health maintenance organization to process the claim, or within a
23-5 period, not to exceed 60 days, specified by a written agreement
23-6 between the physician or provider and the health maintenance
23-7 organization. For purposes of this subsection, "covered services"
23-8 means health care services and benefits to which enrollees are
23-9 entitled under the terms of an applicable evidence of coverage.
23-10 (k) [(j)] A health maintenance organization may provide
23-11 benefits under a health care plan to a dependent grandchild of an
23-12 enrollee when the dependent grandchild is less than 21 years old
23-13 and living with and in the household of the enrollee.
23-14 (l) A health maintenance organization that offers a basic
23-15 health care plan shall provide or arrange for the provision of
23-16 basic health care services to its enrollees as needed and without
23-17 limitations as to time and cost other than limitations prescribed
23-18 by rule of the commissioner.
23-19 (m) Nothing in this Act shall require a health maintenance
23-20 organization, physician, or provider to recommend, offer advice
23-21 concerning, pay for, provide, assist in, perform, arrange, or
23-22 participate in providing or performing any health care service that
23-23 violates its religious convictions. A health maintenance
23-24 organization that limits or denies health care services under this
23-25 subsection shall set forth such limitations in the evidence of
23-26 coverage as required by Section 9(a)(3) of this Act.
23-27 (n) The commissioner may adopt minimum standards relating to
24-1 basic health care services.
24-2 SECTION 6. Section 11, Texas Health Maintenance
24-3 Organization Act (Article 20A.11, Vernon's Texas Insurance Code),
24-4 is amended to read as follows:
24-5 Sec. 11. INFORMATION TO PROSPECTIVE AND CURRENT GROUP
24-6 CONTRACT HOLDERS AND ENROLLEES. (a) Each plan application form
24-7 shall prominently include a space in which the enrollee at the time
24-8 of application or enrollment shall make a selection of a primary
24-9 care physician or primary care provider. An enrollee shall at all
24-10 times have the right to select or change a primary care physician
24-11 or primary care provider within the health maintenance organization
24-12 network of available primary care physicians and primary care
24-13 providers. However, a health maintenance organization may limit
24-14 an enrollee's request to change physicians or providers to not more
24-15 than four changes in any 12-month period.
24-16 (b) A health maintenance organization shall provide an
24-17 accurate written description of health care plan terms and
24-18 conditions to allow any current or prospective group contract
24-19 holder and current or prospective enrollee eligible for enrollment
24-20 in a health care plan to make comparisons and informed decisions
24-21 before selecting among health care plans. The written description
24-22 must be in a readable and understandable format as prescribed by
24-23 the commissioner and must include:
24-24 (1) a statement that the entity providing the coverage
24-25 is a health maintenance organization;
24-26 (2) a toll-free telephone number, unless exempted by
24-27 statute or rule, and the address for the prospective group contract
25-1 holder or prospective enrollee to obtain additional information,
25-2 including provider information;
25-3 (3) a description of each covered service and benefit,
25-4 including a description of any options for prescription drug
25-5 coverage, both generic and brand name;
25-6 (4) emergency care services and benefits, including
25-7 coverage for out-of-area emergency care services and information on
25-8 access to after-hours care;
25-9 (5) out-of-area services and benefits, if any;
25-10 (6) an explanation of the enrollee's financial
25-11 responsibility for payment of premiums, copayments, deductibles,
25-12 and any other out-of-pocket expenses for non-covered or out-of-plan
25-13 services, and, if applicable, an explanation that network
25-14 physicians and providers have agreed to look only to the health
25-15 maintenance organization and not to its enrollees for payment of
25-16 covered services except as set forth in this description;
25-17 (7) any applicable limitations and exclusions,
25-18 including the existence of any drug formulary limitations;
25-19 (8) any prior authorization requirements, including
25-20 limitations or restrictions on, and a summary of procedures to
25-21 obtain approval for, referrals to providers other than primary care
25-22 physicians or dentists, and other review requirements, including
25-23 preauthorization review, concurrent review, post-service review,
25-24 and post-payment review, and the consequences resulting from the
25-25 failure to obtain any required authorizations;
25-26 (9) a provision for continuity of treatment in the
25-27 event of the termination of a primary care physician;
26-1 (10) a summary of the complaint resolution procedures
26-2 of the health maintenance organization and a statement that the
26-3 health maintenance organization is prohibited from retaliating
26-4 against a group contract holder or enrollee because the group
26-5 contract holder or enrollee has filed a complaint against the
26-6 health maintenance organization or appealed a decision of the
26-7 health maintenance organization and is prohibited from retaliating
26-8 against a physician or provider because the physician or provider
26-9 has, on behalf of an enrollee, reasonably filed a complaint against
26-10 the health maintenance organization or appealed a decision of the
26-11 health maintenance organization;
26-12 (11) a current list of physicians and providers,
26-13 updated on at least a quarterly basis, including names and
26-14 locations of physicians and providers, a statement of limitations
26-15 of accessibility and referrals to specialists, and a disclosure of
26-16 which physicians and providers will not accept new enrollees or
26-17 participate in closed-provider networks serving only enrollees;
26-18 (12) the service area; and
26-19 (13) any additional information as required by the
26-20 commissioner.
26-21 (c) The health maintenance organization may provide a
26-22 handbook published by the health maintenance organization to
26-23 satisfy the requirements adopted under Subsection (b) of this
26-24 section if the content of the handbook is substantially similar to
26-25 and achieves the same level of disclosure as the written
26-26 description prescribed by the commissioner and the current list of
26-27 physicians and providers is also provided.
27-1 (d) A health maintenance organization shall notify a group
27-2 contract holder of any substantive change to the payment
27-3 arrangements between the health maintenance organization and health
27-4 care physicians or providers not later than the 30th day after the
27-5 effective date of the change.
27-6 (e) A health maintenance organization, or representative of
27-7 a health maintenance organization, may not cause or knowingly
27-8 permit the use of or distribution to a prospective enrollee of
27-9 information that is untrue or misleading.
27-10 (f) Every health maintenance organization shall provide to
27-11 its enrollees reasonable notice of any material adverse change in
27-12 the operation of the organization that will affect them directly.
27-13 SECTION 7. The Texas Health Maintenance Organization Act
27-14 (Chapter 20A, Vernon's Texas Insurance Code) is amended by adding
27-15 Section 11A to read as follows:
27-16 Sec. 11A. ACCESS TO CERTAIN INFORMATION. (a) Each health
27-17 maintenance organization or approved nonprofit health corporation
27-18 certified under Section 5.01(a), Medical Practice Act (Article
27-19 4495b, Vernon's Texas Civil Statutes), and holding a certificate of
27-20 authority issued by the commissioner shall establish procedures to
27-21 provide to an enrollee a member handbook and materials relating to
27-22 the complaint and appeals process in the languages of the major
27-23 populations of the enrolled population. For purposes of this
27-24 subsection, a major population is defined as a group comprising 10
27-25 percent or more of the health maintenance organization's enrolled
27-26 population.
27-27 (b) Each health maintenance organization and approved
28-1 nonprofit health corporation certified under Section 5.01(a),
28-2 Medical Practice Act (Article 4495b, Vernon's Texas Civil Statutes)
28-3 and holding a certificate of authority issued by the commissioner
28-4 shall establish procedures to provide access to a member handbook
28-5 and the complaint and appeals process to an enrollee who has a
28-6 disability affecting the enrollee's ability to communicate or to
28-7 read.
28-8 SECTION 8. The Texas Health Maintenance Organization Act
28-9 (Chapter 20A, Vernon's Texas Insurance Code) is amended by adding
28-10 Section 11B to read as follows:
28-11 Sec. 11B. INFORMATION TO ENROLLEES AND PROSPECTIVE
28-12 ENROLLEES: MEDICARE-CONTRACTING HEALTH MAINTENANCE ORGANIZATION.
28-13 (a) Before a prospective enrollee is enrolled in the health care
28-14 plan offered to Medicare recipients by a Medicare-contracting
28-15 health maintenance organization, the health maintenance
28-16 organization must provide the prospective enrollee the following
28-17 disclosure:
28-18 IF YOU ENROLL IN THIS HEALTH CARE PLAN AND REMAIN ENROLLED FOR MORE
28-19 THAN SIX MONTHS AFTER YOUR 65TH BIRTHDAY, YOU MAY LOSE YOUR
28-20 OPPORTUNITY TO PURCHASE MEDICARE SUPPLEMENT INSURANCE (MEDIGAP).
28-21 MEDICARE SUPPLEMENT INSURANCE (MEDIGAP) MUST BE OFFERED TO YOU
28-22 WITHOUT REGARD TO YOUR HEALTH STATUS, INCLUDING ANY PREEXISTING
28-23 CONDITION, BUT ONLY DURING THE FIRST SIX MONTHS AFTER YOUR 65TH
28-24 BIRTHDAY. AFTER SIX MONTHS AFTER YOUR 65TH BIRTHDAY YOU MAY BE
28-25 DENIED MEDICARE SUPPLEMENT INSURANCE (MEDIGAP), COVERAGE UNDER
28-26 MEDICARE SUPPLEMENT INSURANCE (MEDIGAP) MAY BE LIMITED, OR YOU MAY
28-27 BE SUBJECT TO HIGHER COSTS BECAUSE OF YOUR HEALTH STATUS.
29-1 (b) Before a prospective enrollee is enrolled, the health
29-2 maintenance organization must obtain the prospective enrollee's
29-3 signature acknowledging receipt of the disclosure required by
29-4 Subsection (a) or this section.
29-5 SECTION 9. Section 12, Texas Health Maintenance
29-6 Organization Act (Article 20A.12, Vernon's Texas Insurance Code),
29-7 is amended to read as follows:
29-8 Sec. 12. COMPLAINT AND APPEAL SYSTEM. (a) Every health
29-9 maintenance organization shall establish and maintain an internal
29-10 system for the resolution of complaints, including a process for
29-11 the notice and appeal of complaints. The commissioner may adopt
29-12 reasonable rules as necessary or proper to implement and
29-13 administer this section [a complaint system to provide reasonable
29-14 procedures for the resolution of written complaints initiated by
29-15 enrollees concerning health care services]. Each health
29-16 maintenance organization shall implement and maintain a system for
29-17 the resolution of complaints as provided by this section.
29-18 (b) If a complainant notifies the health maintenance
29-19 organization orally or in writing of a complaint, the health
29-20 maintenance organization, not later than the fifth business day
29-21 after the date of the receipt of the complaint, shall send to the
29-22 complainant a letter acknowledging the date of receipt of the
29-23 complaint that includes a description of the organization's
29-24 complaint procedures and time frames. If the complaint is received
29-25 orally, the health maintenance organization shall also enclose a
29-26 one-page complaint form.
29-27 (c) The health maintenance organization shall investigate
30-1 each oral and written complaint received in accordance with its own
30-2 policies and in compliance with this Act.
30-3 (d) The total time for acknowledgment, investigation, and
30-4 resolution of the complaint by the health maintenance organization
30-5 may not exceed 30 calendar days after the date the health
30-6 maintenance organization receives the complaint from the
30-7 complainant.
30-8 (e) Subsections (b) and (d) of this section do not apply to
30-9 complaints concerning emergencies or denials of continued stays for
30-10 hospitalization. Investigation and resolution of complaints
30-11 concerning emergencies or denials of continued stays for
30-12 hospitalization shall be concluded in accordance with the medical
30-13 or dental immediacy of the case and may not exceed one business day
30-14 from receipt of the complaint.
30-15 (f) After the health maintenance organization has
30-16 investigated a complaint, the health maintenance organization shall
30-17 issue a response letter to the complainant explaining the health
30-18 maintenance organization's resolution of the complaint within the
30-19 time frame set forth in Subsection (d) of this section. The letter
30-20 must include a statement of the specific medical and contractual
30-21 reasons for the resolution and the specialization of any physician
30-22 or other provider consulted. If the resolution is to deny services
30-23 based on an adverse determination of medical necessity, the
30-24 clinical basis used to reach that decision must be included. The
30-25 response letter must contain a full description of the process for
30-26 appeal, including the time frames for the appeals process and the
30-27 time frames for the final decision on the appeal.
31-1 (g) If the complaint is not resolved to the satisfaction of
31-2 the complainant, the health maintenance organization shall provide
31-3 an appeals process that includes the right of the complainant
31-4 either to appear in person before a complaint appeal panel where
31-5 the enrollee normally receives health care services, unless another
31-6 site is agreed to by the complainant, or to address a written
31-7 appeal to the complaint appeal panel. The health maintenance
31-8 organization shall complete the appeals process under this section
31-9 not later than the 30th calendar day after the date of the receipt
31-10 of the request for appeal.
31-11 (h) The health maintenance organization shall send an
31-12 acknowledgment letter to the complainant not later than the fifth
31-13 business day after the date of receipt of the request for appeal.
31-14 (i) The health maintenance organization shall appoint
31-15 members to the complaint appeal panel, which shall advise the
31-16 health maintenance organization on the resolution of the dispute.
31-17 The complaint appeal panel shall be composed of equal numbers of
31-18 health maintenance organization staff, physicians or other
31-19 providers, and enrollees. A member of the complaint appeal panel
31-20 may not have been previously involved in the disputed decision.
31-21 The physicians or other providers must have experience in the area
31-22 of care that is in dispute and must be independent of any physician
31-23 or provider who made any prior determination. If specialty care is
31-24 in dispute, the appeal panel must include an additional person who
31-25 is a specialist in the field of care to which the appeal relates.
31-26 The enrollees may not be employees of the health maintenance
31-27 organization.
32-1 (j) Not later than the fifth business day before the
32-2 scheduled meeting of the panel, the health maintenance organization
32-3 shall provide to the complainant or the complainant's designated
32-4 representative:
32-5 (1) any documentation to be presented to the panel by
32-6 the health maintenance organization staff;
32-7 (2) the specialization of any physicians or providers
32-8 consulted during the investigation; and
32-9 (3) the name and affiliation of each health
32-10 maintenance organization representative on the panel.
32-11 (k) The complainant or the designated representative is
32-12 entitled to:
32-13 (1) appear in person before the complaint appeal
32-14 panel;
32-15 (2) present alternative expert testimony; and
32-16 (3) request the presence of and question any person
32-17 responsible for making the prior determination that resulted in the
32-18 appeal.
32-19 (l) Investigation and resolution of appeals relating to
32-20 ongoing emergencies or denials of continued stays for
32-21 hospitalization shall be concluded in accordance with the medical
32-22 or dental immediacy of the case but in no event to exceed one
32-23 business day after the complainant's request for appeal. Due to
32-24 the ongoing emergency or continued hospital stay, and at the
32-25 request of the complainant, the health maintenance organization
32-26 shall provide, in lieu of a complaint appeal panel, a review by a
32-27 physician or provider who has not previously reviewed the case and
33-1 is of the same or similar specialty as typically manages the
33-2 medical condition, procedure, or treatment under discussion for
33-3 review of the appeal. The physician or provider reviewing the
33-4 appeal may interview the patient or the patient's designated
33-5 representative and shall render a decision on the appeal. Initial
33-6 notice of the decision may be delivered orally if followed by
33-7 written notice of the determination within three days.
33-8 Investigation and resolution of appeals after emergency care has
33-9 been provided shall be conducted in accordance with the process
33-10 established under this section, including the right to a review by
33-11 an appeal panel.
33-12 (m) Notice of the final decision of the health maintenance
33-13 organization on the appeal must include a statement of the specific
33-14 medical determination, clinical basis, and contractual criteria
33-15 used to reach the final decision. The notice must also include the
33-16 toll-free telephone number and the address of the Texas Department
33-17 of Insurance.
33-18 (n) The health maintenance organization shall maintain a
33-19 record of each complaint and any complaint proceeding, and any
33-20 actions taken on a complaint for three years from the date of the
33-21 receipt of the complaint. A complainant is entitled to a copy of
33-22 the record on the applicable complaint and any complaint
33-23 proceeding.
33-24 (o) Each health maintenance organization shall maintain a
33-25 complaint and appeal log regarding each complaint.
33-26 (p) Each health maintenance organization shall maintain
33-27 documentation on each complaint received and the action taken on
34-1 the complaint until the third anniversary of the date of receipt of
34-2 the complaint. The Texas Department of Insurance may review
34-3 documentation maintained under this subsection during any
34-4 investigation of the health maintenance organization.
34-5 (q) The commissioner [or board] may examine the [such]
34-6 complaint system for compliance with this Act and may require the
34-7 health maintenance organization to make corrections as considered
34-8 necessary by the commissioner.
34-9 SECTION 10. The Texas Health Maintenance Organization Act
34-10 (Article 20A.01 et seq., Vernon's Texas Insurance Code) is amended
34-11 by adding Section 12A to read as follows:
34-12 Sec. 12A. FILING COMPLAINTS WITH THE TEXAS DEPARTMENT OF
34-13 INSURANCE. (a) Any person, including a person who has attempted
34-14 to resolve a complaint through the health maintenance
34-15 organization's complaint system process and who is dissatisfied
34-16 with the resolution offered through that process, may report an
34-17 alleged violation of this Act to the Texas Department of Insurance.
34-18 (b) Not later than the 60th day after the date on which the
34-19 Texas Department of Insurance receives a complaint against a health
34-20 maintenance organization and all information necessary for the
34-21 department to determine compliance, the commissioner shall
34-22 investigate the complaint to determine compliance with this Act.
34-23 The commissioner may extend for a period not to exceed six months
34-24 the time to complete an investigation if:
34-25 (1) additional information is needed;
34-26 (2) an on-site review is necessary;
34-27 (3) the health maintenance organization, the physician
35-1 or provider, or the complainant does not provide all documentation
35-2 necessary to complete the investigation; or
35-3 (4) other circumstances beyond the control of the
35-4 department occur.
35-5 SECTION 11. Subsections (a), (b), (c), (f), (g), and (h),
35-6 Section 13, Texas Health Maintenance Organization Act (Article
35-7 20A.13, Vernon's Texas Insurance Code), are amended to read as
35-8 follows:
35-9 (a) Unless otherwise provided by this section, each health
35-10 maintenance organization shall deposit with the comptroller [State
35-11 Treasurer] cash or securities, or any combination of these or other
35-12 guarantees that are acceptable to the commissioner [State Board of
35-13 Insurance], in an amount as set forth in this section.
35-14 (b) For a health maintenance organization which has not
35-15 received a certificate of authority from the State Board of
35-16 Insurance or the commissioner prior to September 1, 1987:
35-17 (1) the amount of the initial deposit or other
35-18 guarantee shall be $100,000 for an organization offering basic
35-19 health care services and $50,000 for an organization offering a
35-20 single health care service plan;
35-21 (2) on or before March 15 of the year following the
35-22 year in which the health maintenance organization receives a
35-23 certificate of authority, it shall deposit with the comptroller
35-24 [State Treasurer] an amount equal to the difference between the
35-25 initial deposit and 100 percent of its estimated uncovered health
35-26 care expenses for the first 12 months of operation;
35-27 (3) on or before March 15 of each subsequent year, it
36-1 shall deposit the difference between its total uncovered health
36-2 care expenses based on its annual statement from the previous year
36-3 and the total amount previously deposited and not withdrawn from
36-4 the State Treasury; and
36-5 (4) in any year in which the amount determined in
36-6 accordance with Subdivision (3) of this subsection is zero or less
36-7 than zero, the commissioner [State Board of Insurance] may not
36-8 require the health maintenance organization to make any additional
36-9 deposit under this subsection.
36-10 (c) For a health maintenance organization which has received
36-11 a certificate of authority from the State Board of Insurance prior
36-12 to September 1, 1987:
36-13 (1) on or before March 15, 1988, the organization
36-14 shall deposit an amount equal to the sum of:
36-15 (A) $100,000 for an organization offering basic
36-16 health care services or $50,000 for an organization offering a
36-17 single health care service plan; and
36-18 (B) 100 percent of the uncovered health care
36-19 expenses for the preceding 12 months of operation;
36-20 (2) on or before March 15 of each subsequent year, the
36-21 organization shall make additional deposits of the difference
36-22 between its total uncovered health care expenses based on its
36-23 annual statement from the previous year and the total amount
36-24 previously deposited and not withdrawn from the State Treasury; and
36-25 (3) in any year in which the amount determined in
36-26 accordance with Subdivision (2) of this subsection is zero or less
36-27 than zero, the commissioner [State Board of Insurance] may not
37-1 require the health maintenance organization to make any additional
37-2 deposit under this subsection.
37-3 (f) Upon application by a health maintenance organization
37-4 operating for more than one year under a certificate of authority
37-5 issued by the State Board of Insurance or the commissioner, the
37-6 commissioner [State Board of Insurance] may waive some or all of
37-7 the requirements of Subsection (b) or (c) of this section for any
37-8 period of time it shall deem proper whenever it finds that one or
37-9 more of the following conditions justifies such waiver:
37-10 (1) the total amount of the deposit or other guarantee
37-11 is equal to 25 percent of the health maintenance organization's
37-12 estimated uncovered expenses for the next calendar year;
37-13 (2) the health maintenance organization's net worth is
37-14 equal to at least 25 percent of its estimated uncovered expenses
37-15 for the next calendar year; or
37-16 (3) either the health maintenance organization has a
37-17 net worth of $5,000,000 or its sponsoring organization has a net
37-18 worth of at least $5,000,000 for each health maintenance
37-19 organization whose uncovered expenses it guarantees.
37-20 (g) If one or more of the requirements is waived, any amount
37-21 previously deposited shall remain on deposit until released in
37-22 whole or in part by the comptroller [State Treasurer] upon order of
37-23 the commissioner [State Board of Insurance] pursuant to Subsection
37-24 (f) of this section.
37-25 (h) A health maintenance organization that has made a
37-26 deposit with the comptroller [State Treasurer] may, at its option,
37-27 withdraw the deposit or any part thereof, first having deposited
38-1 with the comptroller [State Treasurer], in lieu thereof, a deposit
38-2 of cash or securities of equal amount and value to that withdrawn.
38-3 Any securities shall be approved by the commissioner [State Board
38-4 of Insurance] before being substituted.
38-5 SECTION 12. Section 14, Texas Health Maintenance
38-6 Organization Act (Article 20A.14, Vernon's Texas Insurance Code),
38-7 is amended by adding Subsections (i)-(m) to read as follows:
38-8 (i)(1) A health maintenance organization may not, as a
38-9 condition of a contract with a physician or provider or in any
38-10 other manner, prohibit, attempt to prohibit, or discourage a
38-11 physician or provider from:
38-12 (A) discussing with or communicating to a
38-13 current, prospective, or former patient, or a party designated by a
38-14 patient, information or opinions regarding the patient's health
38-15 care, including the patient's medical condition or treatment
38-16 options; or
38-17 (B) discussing with or communicating in good
38-18 faith to a current, prospective, or former patient, or a party
38-19 designated by a patient, information or opinions regarding the
38-20 provisions, terms, requirements, or services of the health care
38-21 plan as they relate to the medical needs of the patient.
38-22 (2) A health maintenance organization may not in any
38-23 way penalize, terminate, or refuse to compensate, for covered
38-24 services, a physician or provider for communicating with a current,
38-25 prospective, or former patient, or a party designated by a patient,
38-26 in a manner protected by this section.
38-27 (j) A health maintenance organization may not engage in any
39-1 retaliatory action, including the refusal to renew or cancellation
39-2 of coverage, against a group contract holder or enrollee because
39-3 the group, enrollee, or person acting on behalf of the group or
39-4 enrollee has filed a complaint against the health maintenance
39-5 organization or appealed a decision of the health maintenance
39-6 organization.
39-7 (k) A health maintenance organization may not engage in any
39-8 retaliatory action, including termination of or refusal to renew a
39-9 contract, against a physician or provider because the physician or
39-10 provider has, on behalf of an enrollee, reasonably filed a
39-11 complaint against the health maintenance organization or has
39-12 appealed a decision of the health maintenance organization.
39-13 (l) A health maintenance organization may not use any
39-14 financial incentive or make any payment to a physician or provider
39-15 that acts directly or indirectly as an inducement to limit
39-16 medically necessary services. This subsection does not prohibit
39-17 the use of capitation as a method of payment.
39-18 (m) A health maintenance organization may not:
39-19 (1) require, as a condition of coverage or for any
39-20 other reason:
39-21 (A) the observation of a psychotherapy session
39-22 relating to or involving a covered person; or
39-23 (B) that a provider's process or progress notes
39-24 be submitted to the health maintenance organization for review;
39-25 (2) deny benefits for psychotherapy on the grounds
39-26 that the patient:
39-27 (A) refuses medication based on religious
40-1 beliefs; or
40-2 (B) refuses medication for a period of time
40-3 beyond the contract limits related to outpatient visits; or
40-4 (3) deny benefits for mental health therapy on the
40-5 grounds that the therapy is provided in a group session with family
40-6 members or other individuals.
40-7 SECTION 13. Section 15, Texas Health Maintenance
40-8 Organization Act (Article 20A.15, Vernon's Texas Insurance Code),
40-9 is amended to read as follows:
40-10 Sec. 15. REGULATION OF AGENTS [AGENT FOR SINGLE HEALTH CARE
40-11 SERVICE PLANS]. (a) A health maintenance organization agent is
40-12 anyone who represents any health maintenance organization in the
40-13 solicitation, negotiation, procurement, or effectuation of health
40-14 maintenance organization membership or holds himself or herself out
40-15 as such. No person or other legal entity may perform the acts of a
40-16 health maintenance organization agent within this state unless such
40-17 person or legal entity has a valid health maintenance organization
40-18 agent's license issued pursuant to this Act. The term "health
40-19 maintenance organization agent" shall not include:
40-20 (1) any regular salaried officer or employee of a
40-21 health maintenance organization or of a licensed health maintenance
40-22 organization agent, who devotes substantially all of his or her
40-23 time to activities other than the solicitation of applications for
40-24 health maintenance organization membership and receives no
40-25 commission or other compensation directly dependent upon the
40-26 business obtained and who does not solicit or accept from the
40-27 public applications for health maintenance organization membership;
41-1 (2) employers or their officers or employees or the
41-2 trustees of any employee benefit plan to the extent that such
41-3 employers, officers, employees, or trustees are engaged in the
41-4 administration or operation of any program of employee benefits
41-5 involving the use of membership in a health maintenance
41-6 organization; provided that such employers, officers, employees, or
41-7 trustees are not in any manner compensated directly or indirectly
41-8 by the health maintenance organization issuing such health
41-9 maintenance organization membership;
41-10 (3) banks or their officers and employees to the
41-11 extent that such banks, officers, and employees collect and remit
41-12 charges by charging same against accounts of depositors on the
41-13 orders of such depositors; or
41-14 (4) any person or the employee of any person who has
41-15 contracted to provide administrative, management, or health care
41-16 services to a health maintenance organization and who is
41-17 compensated for those services by the payment of an amount
41-18 calculated as a percentage of the revenues, net income, or profit
41-19 of the health maintenance organization, if that method of
41-20 compensation is the sole basis for subjecting that person or the
41-21 employee of the person to this section.
41-22 (b) The commissioner [Commissioner of Insurance] shall
41-23 collect in advance from health maintenance organization agent
41-24 applicants a nonrefundable license fee in an amount not to exceed
41-25 $50 as determined by the commissioner [board]. Unless the
41-26 commissioner [State Board of Insurance] accepts a qualifying
41-27 examination administered by a testing service, as provided under
42-1 Article 21.01-1, Insurance Code, as amended, the commissioner
42-2 [Commissioner of Insurance] shall also collect from such applicants
42-3 an examination fee in an amount not to exceed $20 as determined by
42-4 the commissioner [board]. A new examination fee shall be paid for
42-5 each examination. The examination fee shall not be returned under
42-6 any circumstances other than for failure to appear and take the
42-7 examination after the applicant has given at least 24 hours notice
42-8 of an emergency situation to the commissioner [Commissioner of
42-9 Insurance] and received the commissioner's approval.
42-10 (c) Except as may be provided by a staggered renewal system
42-11 adopted under Article 21.01-2, Insurance Code, and its subsequent
42-12 amendments, each license issued to a health maintenance
42-13 organization agent shall expire two years following the date of
42-14 issue, unless prior thereto it is suspended or revoked by the
42-15 commissioner or the authority of the agent to act for the health
42-16 maintenance organization is terminated.
42-17 (d) Licenses which have not expired or been suspended or
42-18 revoked may be renewed by filing with the commissioner [State Board
42-19 of Insurance] a completed renewal application and by paying a
42-20 nonrefundable renewal fee in an amount not to exceed $50 as
42-21 determined by the commissioner [board] on or before the expiration
42-22 of the license.
42-23 (e) Any agent licensed under this section may represent and
42-24 act as an agent for more than one health maintenance organization
42-25 at any time while the agent's license is in force. Any such agent
42-26 and the health maintenance organization involved must give notice
42-27 to the commissioner [State Board of Insurance] of any additional
43-1 appointment or appointments authorizing the agent to act as agent
43-2 for an additional health maintenance organization or health
43-3 maintenance organizations. Such notice must be accompanied by a
43-4 certificate from each health maintenance organization to be named
43-5 in each additional appointment that said health maintenance
43-6 organization desires to appoint the applicant as its agent. This
43-7 notice shall contain such other information as the commissioner
43-8 [State Board of Insurance] may require. The agent shall be
43-9 required to pay a nonrefundable fee in an amount not to exceed $16
43-10 as determined by the commissioner [board] for each additional
43-11 appointment applied for, which fee shall accompany the notice. If
43-12 approval of the additional appointment is not received from the
43-13 commissioner [State Board of Insurance] before the eighth day after
43-14 the date on which the completed notice and fee were received by the
43-15 commissioner [board], the agent and the health maintenance
43-16 organization, in the absence of notice of disapproval, may assume
43-17 that the board approves the application, and the agent may act for
43-18 the health maintenance organization. The commissioner [State Board
43-19 of Insurance] shall suspend the license of an agent during any
43-20 period in which the agent does not have an outstanding valid
43-21 appointment to represent a health maintenance organization. The
43-22 suspension shall be lifted on receipt by the commissioner [board]
43-23 of acceptable notice of valid appointment.
43-24 (f) It shall be the duty of the commissioner to collect from
43-25 every agent of any health maintenance organization in the State of
43-26 Texas under the provisions of this section a licensing fee and an
43-27 initial appointment fee for each appointment by a health
44-1 maintenance organization. All fees collected under this section
44-2 shall be used by the commissioner [State Board of Insurance] to
44-3 administer the provisions of this [the Texas Health Maintenance
44-4 Organization] Act and all laws of this state governing and
44-5 regulating agents for such health maintenance organizations. All
44-6 of such funds shall be paid into the State Treasury to the credit
44-7 of the Texas Department [State Board] of Insurance operating fund
44-8 and shall be paid out for salaries, traveling expenses, office
44-9 expenses, and other incidental expenses incurred and approved by
44-10 the commissioner [State Board of Insurance].
44-11 (g) The commissioner [State Board of Insurance] may, after
44-12 notice and hearings, promulgate such reasonable rules and
44-13 regulations as are necessary to provide for the licensing of
44-14 agents.
44-15 (h) [(m) Duplicate License; Fee.] The commissioner
44-16 [Commissioner of Insurance] shall collect in advance from agents
44-17 requesting duplicate licenses a fee not to exceed $20. The
44-18 commissioner [State Board of Insurance] shall determine the amount
44-19 of the fee.
44-20 (i) [(n)] The commissioner [State Board of Insurance] shall
44-21 issue a license to a corporation if it finds that:
44-22 (1) the corporation is organized or existing under the
44-23 Texas Business Corporation Act, has its principal place of business
44-24 in this state, and has as one of its purposes the authority to act
44-25 as an agent under this section; and
44-26 (2) each officer, director, and shareholder of the
44-27 corporation is individually licensed under this section.
45-1 (j) [(o)] This section may not be construed to permit any
45-2 employee, agent, or corporation to perform any act of an agent
45-3 under this section without obtaining a license.
45-4 (k) [(p)] If, at any time, a corporation that holds an
45-5 agent's license does not maintain the qualifications necessary to
45-6 obtain a license, the commissioner [State Board of Insurance] shall
45-7 cancel or revoke the license of that corporation to act as an
45-8 agent. If a person who is not a licensed agent under this section
45-9 acquires shares in such a corporation by devise or descent, that
45-10 person must either obtain a license or dispose of the shares to a
45-11 person licensed under this section not later than the 90th day
45-12 after the date on which the person acquires the shares.
45-13 (l) [(q)] If an unlicensed person acquires shares in a
45-14 corporation and does not dispose of the shares within the 90-day
45-15 period, the shares must be purchased by the corporation for the
45-16 value of the shares as reflected by the regular books and records
45-17 of the corporation as of the date of the acquisition of the shares
45-18 by the unlicensed person. If the corporation fails or refuses to
45-19 purchase the shares, the commissioner [State Board of Insurance]
45-20 shall cancel its license.
45-21 (m) [(r)] A corporation may redeem the shares of any
45-22 shareholder or the shares of a deceased shareholder on terms agreed
45-23 to by the board of directors and the shareholder or the
45-24 shareholder's personal representative or at a price and on terms
45-25 provided in the articles of incorporation, the bylaws of the
45-26 corporation, or an existing contract entered into by the
45-27 shareholders of the corporation.
46-1 (n) [(s)] With the application for a license or a license
46-2 renewal, each corporation licensed as an agent under this section
46-3 must file a sworn statement listing the names and addresses of all
46-4 of its officers, directors, and shareholders.
46-5 (o) [(t)] Each corporation shall notify the commissioner
46-6 [State Board of Insurance] of any change in its officers,
46-7 directors, or shareholders not later than the 30th day after the
46-8 date on which the change takes effect.
46-9 (p) [(u)] Another corporation may not own an interest in a
46-10 corporation licensed under this section. Each owner of an interest
46-11 in a corporation licensed under this section must be a natural
46-12 person who holds a valid license issued under this section.
46-13 SECTION 14. Section 15A, Texas Health Maintenance
46-14 Organization Act (Article 20A.15A, Vernon's Texas Insurance Code),
46-15 is amended to read as follows:
46-16 Sec. 15A. AGENTS FOR SINGLE HEALTH CARE SERVICE PLANS. (a)
46-17 A person acting as an agent for a health maintenance organization
46-18 offering only a single health care service plan who is licensed by
46-19 examination under Article 21.07, Insurance Code, or Chapter 213,
46-20 Acts of the 54th Legislature, Regular Session, 1955 (Article
46-21 21.07-1, Vernon's Texas Insurance Code), is subject to the
46-22 licensing requirements provided by this section, and except as
46-23 specifically provided by this Act or some other law, no other agent
46-24 licensing requirements apply.
46-25 (b) The commissioner shall collect in advance from
46-26 applicants for licensure as health maintenance organization agents
46-27 under this section a nonrefundable license fee in an amount not to
47-1 exceed $70 as determined by the commissioner [State Board of
47-2 Insurance].
47-3 (c) Except as may be provided by a staggered renewal system
47-4 adopted under Article 21.01-2, Insurance Code, and its subsequent
47-5 amendments, each license issued to a health maintenance
47-6 organization agent under this section shall expire two years
47-7 following the date of issuance, unless before that time the license
47-8 is suspended or revoked by the commissioner or the authority of the
47-9 agent to act for the health maintenance organization is terminated.
47-10 (d) Licenses issued under this section that have not expired
47-11 or been suspended or revoked may be renewed by filing a completed
47-12 application and paying to the commissioner [board] the required
47-13 nonrefundable renewal fee in an amount not to exceed $50 as
47-14 determined by the commissioner [board].
47-15 (e) An agent licensed under this section may represent and
47-16 act as an agent for more than one health maintenance organization
47-17 offering only a single health care service plan at any time while
47-18 that agent's license is in force. The agent and the health
47-19 maintenance organization offering only a single health care service
47-20 plan involved must give notice to the commissioner [State Board of
47-21 Insurance] of any additional appointment authorizing the agent to
47-22 act as agent for an additional health maintenance organization
47-23 offering only a single health care service plan. The notice must
47-24 be accompanied by a certificate from each health maintenance
47-25 organization to be named in each additional appointment stating
47-26 that the health maintenance organization offers only a single
47-27 health care service plan and desires to appoint the applicant as
48-1 its agent. The notice must include other information required by
48-2 the commissioner [State Board of Insurance]. The agent shall pay a
48-3 nonrefundable fee in an amount not to exceed $70 as determined by
48-4 the commissioner [State Board of Insurance] for each additional
48-5 appointment applied for. The fee must accompany the notice. If
48-6 approval of the additional appointment is not received from the
48-7 commissioner [State Board of Insurance] before the eighth day after
48-8 the date on which the completed notice and fee were received by the
48-9 commissioner [board], the agent and the health maintenance
48-10 organization, in the absence of notice of disapproval, may assume
48-11 that the commissioner [board] approves the application, and the
48-12 agent may act for the health maintenance organization offering a
48-13 single health care service plan. The commissioner [State Board of
48-14 Insurance] shall suspend the license of an agent during any period
48-15 in which the agent does not have an outstanding valid appointment
48-16 to represent a health maintenance organization offering a single
48-17 health care service plan. The suspension shall be lifted on
48-18 receipt by the commissioner [board] of acceptable notice of valid
48-19 appointment.
48-20 (f) The commissioner shall collect from each agent for any
48-21 health maintenance organization offering only a single health care
48-22 service plan a license fee and an appointment fee for each
48-23 additional appointment.
48-24 (g) Fees collected under this section shall be used by the
48-25 commissioner [State Board of Insurance] to administer this Act and
48-26 laws governing and regulating agents for health maintenance
48-27 organizations. The funds shall be deposited in the state treasury
49-1 to the credit of the Texas Department [State Board] of Insurance
49-2 operating fund and shall be paid out for salaries, traveling
49-3 expenses, office expenses, and other incidental expenses incurred
49-4 and approved by the commissioner [State Board of Insurance].
49-5 (h) The commissioner [State Board of Insurance] may, after
49-6 notice and hearing, adopt reasonable rules that are necessary to
49-7 provide for the licensing of agents under this section.
49-8 (i) A licensee may renew an unexpired license issued under
49-9 this section by filing the required renewal application and paying
49-10 a nonrefundable fee with the commissioner [State Board of
49-11 Insurance] on or before the expiration date of the license.
49-12 (j) [(l)] A health maintenance organization offering only a
49-13 single health care service plan that desires to appoint an agent
49-14 under this section shall provide to its prospective agents a
49-15 written manual, a copy of which shall be filed with the
49-16 commissioner [State Board of Insurance], outlining and describing
49-17 the single health care service offered by the health maintenance
49-18 organization, outlining this Act, and the rules of the [State Board
49-19 of Insurance and] commissioner adopted under this Act. The health
49-20 maintenance organization shall certify to the commissioner [State
49-21 Board of Insurance] that it has provided the written manual
49-22 required by this subsection to its prospective agents and has
49-23 provided, under the supervision of a licensed health maintenance
49-24 organization agent, a minimum of four hours of training in its
49-25 single health care service, this Act, and the rules of the [State
49-26 Board of Insurance and the] commissioner adopted under this Act.
49-27 (k) [(n)] Any regular salaried officer or employee of a
50-1 health maintenance organization offering only a single health care
50-2 service plan who solicits applications on behalf of that health
50-3 maintenance organization must be licensed as a health maintenance
50-4 organization agent under this section and must take any examination
50-5 and pay any fee provided by Subsection [Subsections] (b) [and (j)]
50-6 of Section 15 of this Act.
50-7 (l) [(o)] The commissioner shall collect in advance from
50-8 agents requesting duplicate licenses a fee not to exceed $20. The
50-9 commissioner [State Board of Insurance] shall determine the amount
50-10 of the fee.
50-11 SECTION 15. Section 17, Texas Health Maintenance
50-12 Organization Act (Article 20A.17, Vernon's Texas Insurance Code),
50-13 is amended to read as follows:
50-14 Sec. 17. EXAMINATIONS. (a) The commissioner may make an
50-15 examination concerning the quality of health care services and of
50-16 the affairs of any applicant for a certificate of authority or any
50-17 health maintenance organization as often as the commissioner
50-18 considers [it is deemed] necessary, but not less frequently than
50-19 once every three years.
50-20 (b) [The board may make an examination concerning the
50-21 quality of health care services of any health maintenance
50-22 organization as often as it deems it necessary, but not less
50-23 frequently than once every three years.]
50-24 [(c)] (1) Every health maintenance organization shall make
50-25 its books and records relating to its operation available for such
50-26 examinations and in every way facilitate the examinations. Every
50-27 physician and provider with whom a health maintenance organization
51-1 has a contract, agreement, or other arrangement need only make
51-2 available for examination that portion of its books and records
51-3 relevant to its relationship with the health maintenance
51-4 organization.
51-5 (2) A copy of any contract, agreement, or other
51-6 arrangement between a health maintenance organization and a
51-7 physician or provider shall be provided to the commissioner by the
51-8 health maintenance organization on the request of the commissioner.
51-9 The documentation provided to the commissioner under this
51-10 subsection is confidential and is not subject to the open records
51-11 law, Chapter 552, Government Code.
51-12 (3) Medical, hospital, and health records of enrollees
51-13 and records of physicians and providers providing service under
51-14 independent contract with a health maintenance organization shall
51-15 only be subject to such examination as is necessary for an ongoing
51-16 quality of health assurance program concerning health care
51-17 procedures and outcome in accordance with an approved plan as
51-18 provided for in this Act. Said plan shall provide for adequate
51-19 protection of confidentiality of medical information and shall only
51-20 be disclosed in accordance with applicable law and this Act and
51-21 shall only be subject to subpoena upon a showing of good cause.
51-22 (4) The commissioner may examine and use the records
51-23 of a health maintenance organization, including records of a
51-24 quality of care assurance program and records of a medical peer
51-25 review committee as that term is used in Section 1.03, Medical
51-26 Practice Act (Article 4495b, Vernon's Texas Civil Statutes), as
51-27 necessary to carry out the purposes of this Act, including an
52-1 enforcement action under Section 20 of this Act. That information
52-2 is confidential and privileged and is not subject to the open
52-3 records law, Chapter 552, Government Code, or to subpoena except as
52-4 necessary for the commissioner to enforce this Act.
52-5 (5) [(3)] For the purpose of examinations, the
52-6 commissioner [and board] may administer oaths to and examine the
52-7 officers and agents of the health maintenance organization and the
52-8 principals of such physicians and providers concerning their
52-9 business.
52-10 (c) [(d)] Articles 1.04A, 1.15, 1.16, and 1.19, as amended,
52-11 of the Insurance Code shall be construed to apply to health
52-12 maintenance organizations, except to the extent that the
52-13 commissioner determines that the nature of the examination of a
52-14 health maintenance organization renders such clearly inappropriate.
52-15 (d) [(e)] Articles 1.12, 1.24, and 1.30, and Section 7 of
52-16 Article 1.10, Insurance Code, apply to health maintenance
52-17 organizations.
52-18 SECTION 16. Subsections (d) and (f), Section 18, Texas
52-19 Health Maintenance Organization Act (Article 20A.18, Vernon's Texas
52-20 Insurance Code), are amended to read as follows:
52-21 (d) Except as otherwise provided by this subsection, the
52-22 bond required under Subsection (c) of this section must be issued
52-23 by an insurance company that holds a certificate of authority in
52-24 this state. If, after notice and hearing, the commissioner [State
52-25 Board of Insurance] determines that the fidelity bond required by
52-26 this section is not available from an insurance company that holds
52-27 a certificate of authority in this state, a fidelity bond procured
53-1 by a licensed Texas surplus lines agent resident in this state in
53-2 compliance with Article 1.14-2, Insurance Code, satisfies the
53-3 requirements of this section.
53-4 (f) Instead of a bond, the management contractor may deposit
53-5 with the comptroller [State Treasurer] cash or securities
53-6 acceptable to the commissioner [State Board of Insurance]. Such a
53-7 deposit must be maintained in the amount and subject to the same
53-8 conditions as required for a bond under this section.
53-9 SECTION 17. The Texas Health Maintenance Organization Act
53-10 (Article 20A.01 et seq., Vernon's Texas Insurance Code) is amended
53-11 by adding Section 18A to read as follows:
53-12 Sec. 18A. PHYSICIAN AND PROVIDER CONTRACTS. (a) A health
53-13 maintenance organization, on request, shall make available and
53-14 disclose to physicians and providers written application procedures
53-15 and qualification requirements for contracting with the health
53-16 maintenance organization. Each physician and provider who
53-17 initially applies to contract with a health maintenance
53-18 organization for the provision of health care services on behalf of
53-19 the health maintenance organization and who is denied a contract
53-20 with the health maintenance organization shall be provided written
53-21 notice of the reasons the initial application was denied. Unless
53-22 otherwise limited by Article 21.52B, Insurance Code, this
53-23 subsection does not prohibit a health maintenance organization plan
53-24 from rejecting an application from a physician or provider based on
53-25 the determination that the plan has sufficient qualified physicians
53-26 or providers.
53-27 (b) Before terminating a contract with a physician or
54-1 provider, the health maintenance organization shall provide a
54-2 written explanation to the physician or provider of the reasons for
54-3 termination. On request and before the effective date of the
54-4 termination, but within a period not to exceed 60 days, a physician
54-5 or provider shall be entitled to a review of the health maintenance
54-6 organization's proposed termination by an advisory review panel,
54-7 except in a case in which there is imminent harm to patient health
54-8 or an action by a state medical or dental board, other medical or
54-9 dental licensing board, or other licensing board or other
54-10 government agency, that effectively impairs the physician's or
54-11 provider's ability to practice medicine, dentistry, or another
54-12 profession, or in a case of fraud or malfeasance. The advisory
54-13 review panel must be composed of physicians and providers,
54-14 including at least one representative in the physician's or
54-15 provider's specialty or a similar specialty, if available,
54-16 appointed to serve on the standing quality assurance committee or
54-17 utilization review committee of the health maintenance
54-18 organization. The decision of the advisory review panel must be
54-19 considered but is not binding on the health maintenance
54-20 organization. The health maintenance organization shall provide to
54-21 the affected physician or provider, on request, a copy of the
54-22 recommendation of the advisory review panel and the health
54-23 maintenance organization's determination.
54-24 (c) Each contract between a health maintenance organization
54-25 and a physician or provider of health care services must provide
54-26 that reasonable advance notice be given to an enrollee of the
54-27 impending termination from the plan of a physician or provider who
55-1 is currently treating the enrollee. Each contract must also
55-2 provide that the termination of the physician or provider contract,
55-3 except for a reason of medical competence or professional behavior,
55-4 does not release the health maintenance organization from the
55-5 obligation to reimburse the physician or provider who is treating
55-6 an enrollee who is subject to a special circumstance, such as a
55-7 person who has a disability, acute condition, or life-threatening
55-8 illness or who is past the twenty-fourth week of pregnancy, at not
55-9 less than the contract rate for that enrollee's care in exchange
55-10 for continuity of ongoing treatment of an enrollee then receiving
55-11 medically necessary treatment in accordance with the dictates of
55-12 medical prudence. For purposes of this subsection, "special
55-13 circumstance" means a condition such that the treating physician or
55-14 provider reasonably believes that discontinuing care by the
55-15 treating physician or provider could cause harm to the patient.
55-16 The special circumstance shall be identified by the treating
55-17 physician or provider, who must request that the enrollee be
55-18 permitted to continue treatment under the physician's or provider's
55-19 care and agree not to seek payment from the patient of any amounts
55-20 for which the enrollee would not be responsible if the physician or
55-21 provider were still on the health maintenance organization network.
55-22 Each contract between a health maintenance organization and a
55-23 physician or provider must include procedures for resolving
55-24 disputes regarding the necessity for continued treatment by a
55-25 physician or provider. This section does not extend the obligation
55-26 of the health maintenance organization to reimburse the terminated
55-27 physician or provider for ongoing treatment of an enrollee beyond
56-1 the 90th day after the effective date of the termination. However,
56-2 the obligation of the health maintenance organization to reimburse
56-3 the terminated physician or provider or, if applicable, the
56-4 enrollee for services to an enrollee who, at the time of the
56-5 termination:
56-6 (1) is past the 24th week of pregnancy extends through
56-7 delivery of the child, immediate postpartum care, and the follow-up
56-8 checkup within the first six weeks of delivery; or
56-9 (2) is being treated for a life-threatening illness or
56-10 condition extends through the completion of the treatment if the
56-11 physician or provider agrees to the provisions established under
56-12 this section.
56-13 (d) A physician or provider who is terminated or deselected
56-14 is entitled to an expedited review process by the health
56-15 maintenance organization on request by the physician or provider.
56-16 If the physician or provider is deselected for reasons other than
56-17 at the physician's or provider's request, a health maintenance
56-18 organization that has complied with the requirements of Subsection
56-19 (b) of this section may give reasonable advance notice to an
56-20 enrollee of the impending termination from the plan of a physician
56-21 or provider who is currently treating the enrollee. If a physician
56-22 or provider is deselected for reasons related to imminent harm, the
56-23 health maintenance organization may notify patients immediately.
56-24 (e) The following provisions apply to each health
56-25 maintenance organization that to any extent uses capitation as a
56-26 method of compensation:
56-27 (1) The health maintenance organization shall begin
57-1 payment of capitated amounts to the enrollee's primary care
57-2 physician or primary care provider, computed from the date of
57-3 enrollment, not later than the 30th day following the date an
57-4 enrollee has selected or has been assigned a primary care physician
57-5 or primary care provider. If selection or assignment does not
57-6 occur at the time of enrollment, capitation that would otherwise
57-7 have been paid to a selected primary care physician or primary care
57-8 provider had a selection been made shall be reserved as a
57-9 capitation payable until the time that an enrollee makes a
57-10 selection or the plan assigns a primary care physician or primary
57-11 care provider.
57-12 (2) If an enrollee does not select a primary care
57-13 physician or primary care provider at the time of application or
57-14 enrollment, a health maintenance organization shall assign an
57-15 enrollee to a primary care physician or primary care provider not
57-16 later than the 30th day after the date of the enrollment. If a
57-17 health maintenance organization assigns an enrollee to a primary
57-18 care physician or primary care provider, the assignment shall be
57-19 made to a primary care physician or primary care provider located
57-20 within the zip code nearest the enrollee's residence or place of
57-21 employment and, to the extent practicable given the zip code
57-22 limitation, shall be done in a manner that results in a fair and
57-23 equal distribution of enrollees among the plan's primary care
57-24 physicians or primary care providers. The health maintenance
57-25 organization shall inform an enrollee of the name, address, and
57-26 telephone number of the primary care physician or primary care
57-27 provider to whom the enrollee has been assigned and of the
58-1 enrollee's right to select a different primary care physician or
58-2 primary care provider. An enrollee may at any time reject the
58-3 physician or provider assigned and may select another physician or
58-4 provider from the list of primary care physicians or primary care
58-5 providers for the health maintenance organization network. An
58-6 election by an enrollee to reject an assigned physician or provider
58-7 may not be counted as a change in providers for purposes of the
58-8 limitation described by Section 11(a) of this Act.
58-9 (3) A health maintenance organization shall notify a
58-10 physician or provider of the selection of the physician or provider
58-11 as a primary care physician or primary care provider by an enrollee
58-12 not later than the 30th business day after the date of the
58-13 selection or assignment of an enrollee to that physician or
58-14 provider by the health maintenance organization.
58-15 (4) As an alternative to the provisions of
58-16 Subdivisions (1), (2), and (3) of this subsection, a health
58-17 maintenance organization may seek approval from the Texas
58-18 Department of Insurance of a different capitation payment scheme
58-19 that ensures:
58-20 (A) immediate availability and accessibility of
58-21 a primary care physician or primary care provider; and
58-22 (B) payment to the primary care physician or
58-23 primary care provider of a capitation amount certified by a
58-24 qualified actuary to be actuarially sufficient to compensate the
58-25 primary care physician or primary care provider for the risk being
58-26 assumed.
58-27 (f) A contract between a health maintenance organization and
59-1 a physician or provider may not contain any clause purporting to
59-2 indemnify the health maintenance organization for any tort
59-3 liability resulting from acts or omissions of the health
59-4 maintenance organization.
59-5 (g) Each contract or other agreement between a health
59-6 maintenance organization and a physician or provider must specify
59-7 that the physician or provider will hold an enrollee harmless for
59-8 payment of the cost of covered health care services in the event
59-9 that the health maintenance organization fails to pay the provider
59-10 for health care services.
59-11 (h) A health maintenance organization that conducts or uses
59-12 economic profiling of physicians or providers within the health
59-13 maintenance organization shall make available to a network
59-14 physician or provider on request the economic profile of that
59-15 physician or provider, including the standards by which the
59-16 physician or provider is measured. The use of an economic profile
59-17 must recognize the characteristics of a physician's or provider's
59-18 practice that may account for variations from expected costs.
59-19 (i) A contract between a health maintenance organization and
59-20 a physician or a provider must require the physician or provider to
59-21 post, in the office of the physician or provider, a notice to
59-22 enrollees on the process for resolving complaints with the health
59-23 maintenance organization. The notice must include the Texas
59-24 Department of Insurance's toll-free telephone number for filing
59-25 complaints.
59-26 (j) For purposes of this section, "termination" includes the
59-27 deselection of a physician or provider from a health maintenance
60-1 organization or the failure or refusal of a health maintenance
60-2 organization to renew a contract entered into with a physician or
60-3 provider.
60-4 SECTION 18. Section 19, Texas Health Maintenance
60-5 Organization Act (Article 20A.19, Vernon's Texas Insurance Code),
60-6 is amended to read as follows:
60-7 Sec. 19. HAZARDOUS FINANCIAL CONDITION. (a) Whenever the
60-8 financial condition of any health maintenance organization
60-9 indicates a condition such that the continued operation of the
60-10 health maintenance organization might be hazardous to its
60-11 enrollees, creditors, or the general public, then the commissioner
60-12 [of insurance] may, after notice and opportunity for hearing, order
60-13 the health maintenance organization to take such action as may be
60-14 reasonably necessary to rectify the existing condition, including
60-15 but not necessarily limited to one or more of the following steps:
60-16 (1) to reduce the total amount of present and
60-17 potential liability for benefits by reinsurance;
60-18 (2) to reduce the volume of new business being
60-19 accepted;
60-20 (3) to reduce expenses by specified methods;
60-21 (4) to suspend or limit the writing of new business
60-22 for a period of time;
60-23 (5) to increase the health maintenance organization's
60-24 capital and surplus by contribution; or
60-25 (6) to suspend or revoke the certificate of authority.
60-26 (b) The commissioner [State Board of Insurance] is
60-27 authorized, by rules and regulations, to fix uniform standards and
61-1 criteria for early warning that the continued operation of any
61-2 health maintenance organization might be hazardous to its
61-3 enrollees, creditors, or the general public, and to fix standards
61-4 for evaluating the financial condition of any health maintenance
61-5 organization, which standards shall be consistent with the purposes
61-6 expressed in Subsection (a) of this section.
61-7 SECTION 19. Subsection (a), Section 20, Texas Health
61-8 Maintenance Organization Act (Article 20A.20, Vernon's Texas
61-9 Insurance Code), is amended to read as follows:
61-10 (a) The commissioner may, after notice and opportunity for
61-11 hearing, suspend or revoke any certificate of authority issued to a
61-12 health maintenance organization under this Act, impose sanctions
61-13 under Section 7, Article 1.10, Insurance Code, impose
61-14 administrative penalties under Article 1.10E, Insurance Code, or
61-15 issue a cease and desist order under Article 1.10A, Insurance Code,
61-16 if the commissioner finds that any of the following conditions
61-17 exist:
61-18 (1) The health maintenance organization is operating
61-19 significantly in contravention of its basic organizational
61-20 documents, or its health care plan, or in a manner contrary to that
61-21 described in and reasonably inferred from any other information
61-22 submitted under Section 4 of this Act.
61-23 (2) The health maintenance organization issues
61-24 evidence of coverage or uses a schedule of charges for health care
61-25 services which does not comply with the requirements of Section 9
61-26 of this Act.
61-27 (3) The health care plan does not provide or arrange
62-1 for basic health care services or the single health care service
62-2 plan does not provide or arrange for a single health care service.
62-3 (4) The [board certifies to the commissioner that:]
62-4 [(A) the] health maintenance organization does
62-5 not meet the requirements of Section 5(a)(1) [5(a)(2)] of this
62-6 Act.[; or]
62-7 (5) The [(B) the] health maintenance organization is
62-8 unable to fulfill its obligation to furnish health care services as
62-9 required under its health care plan or to furnish a single health
62-10 care service as required under its single health care service plan.
62-11 (6) [(5)] The health maintenance organization is no
62-12 longer financially responsible and may be reasonably expected to be
62-13 unable to meet its obligations to enrollees or prospective
62-14 enrollees.
62-15 (7) [(6)] The health maintenance organization has
62-16 failed to implement the complaint system required by Section 12 of
62-17 this Act in a manner to resolve reasonably valid complaints.
62-18 (8) [(7)] The health maintenance organization, or any
62-19 person on its behalf, has advertised or merchandised its services
62-20 in an untrue, misrepresentative, misleading, deceptive, or unfair
62-21 manner.
62-22 (9) [(8)] The continued operation of the health
62-23 maintenance organization would be hazardous to its enrollees.
62-24 (10) [(9)] The health maintenance organization has
62-25 otherwise failed to comply substantially with this Act, and any
62-26 rule and regulation thereunder.
62-27 (11) The health maintenance organization has failed to
63-1 carry out corrective action the commissioner considers necessary to
63-2 correct a failure to comply with this Act, any applicable provision
63-3 of the Insurance Code, or any applicable rule or order of the
63-4 commissioner not later than the 30th day after the date of notice
63-5 of a deficiency or within any longer period that the commissioner
63-6 determines to be reasonable and specifies in the notice.
63-7 SECTION 20. Section 22, Texas Health Maintenance
63-8 Organization Act (Article 20A.22, Vernon's Texas Insurance Code),
63-9 is amended to read as follows:
63-10 Sec. 22. RULES AND REGULATIONS. (a) The commissioner
63-11 [State Board of Insurance] may promulgate such reasonable rules and
63-12 regulations as are necessary and proper to carry out the provisions
63-13 of this Act.
63-14 (b) The commissioner [State Board of Insurance] is
63-15 specifically authorized to promulgate rules to prescribe
63-16 [prescribing] authorized investments for health maintenance
63-17 organizations for all investments for which provision is not
63-18 otherwise made in this Act, ensure that enrollees have adequate
63-19 access to health care services, and establish minimum
63-20 physician/patient ratios, mileage requirements for primary and
63-21 specialty care, maximum travel time, and maximum waiting times for
63-22 obtaining appointments. The rulemaking authority provided by this
63-23 subsection does not limit in any manner the rulemaking authority
63-24 granted to the commissioner [State Board of Insurance] under
63-25 Subsection (a) of this section.
63-26 (c) The commissioner may promulgate such reasonable rules
63-27 and regulations as are necessary and proper to meet the
64-1 requirements of federal law and regulations.
64-2 SECTION 21. Section 23, Texas Health Maintenance
64-3 Organization Act (Article 20A.23, Vernon's Texas Insurance Code),
64-4 is amended to read as follows:
64-5 Sec. 23. APPEALS. (a) Any person who is affected by any
64-6 rule, ruling, or decision of the Texas Department of Insurance or
64-7 the commissioner [or board] shall have the right to have such rule,
64-8 ruling, or decision reviewed by the commissioner [State Board of
64-9 Insurance] by making an application to the commissioner [State
64-10 Board of Insurance]. Such application shall state the identities
64-11 of the person, the rule, ruling, or decision complained of, the
64-12 interest of the person in such rule, ruling, or decision, the
64-13 grounds of such objection, the action sought of the commissioner
64-14 [State Board of Insurance], and the reasons and grounds for such
64-15 action by the commissioner [State Board of Insurance]. The
64-16 original shall be filed with the chief clerk of the Texas
64-17 Department [State Board] of Insurance together with a certification
64-18 that a true and correct copy of such application has been filed
64-19 with the commissioner. Within 30 days after the application is
64-20 filed, and after 10 days' written notice to all parties of record,
64-21 the commissioner [State Board of Insurance] shall review the action
64-22 complained of in a public hearing and render its decision at the
64-23 earliest possible date thereafter. The commissioner [State Board
64-24 of Insurance] shall make such other rules and regulations with
64-25 respect to such applications and their consideration as it
64-26 considers to be advisable, not inconsistent with this Act. Said
64-27 application shall have precedence over all other business of a
65-1 different nature pending before said commissioner [State Board of
65-2 Insurance].
65-3 (b) In the public hearing, any and all evidence and matters
65-4 pertinent to the appeal may be submitted to the commissioner [State
65-5 Board of Insurance] whether included in the application or not.
65-6 (c) If any person who is affected by any rule, ruling, or
65-7 decision of the commissioner [State Board of Insurance] be
65-8 dissatisfied with any rule, ruling, or decision adopted by the
65-9 commissioner, [board, or State Board of Insurance,] that person,
65-10 after failing to get relief from the commissioner [State Board of
65-11 Insurance], may file a petition seeking review of the rule, ruling,
65-12 or decision and setting forth the particular objection to such
65-13 rule, ruling, or decision, or either or all of them, in a district
65-14 court of Travis County, Texas, and not elsewhere, against the
65-15 commissioner [State Board of Insurance] as defendant. The action
65-16 shall have precedence over all other causes on the docket of a
65-17 different nature. The proceedings on appeal shall be tried and
65-18 determined as provided by Article 1.04, Insurance Code. Either
65-19 party to the action may appeal to the appellate court having
65-20 jurisdiction of the cause and the appeal shall at once be
65-21 returnable to the appellate court having jurisdiction of the cause
65-22 and the action so appealed shall have precedence in the appellate
65-23 court over all causes of a different character therein pending.
65-24 The commissioner [State Board of Insurance] is not required to give
65-25 any appeal bond in any cause arising hereunder.
65-26 SECTION 22. Subsection (f)(4), Section 26, Texas Health
65-27 Maintenance Organization Act (Article 20A.26, Vernon's Texas
66-1 Insurance Code), is amended to read as follows:
66-2 (4) Except for Articles 21.07-6 and 21.58A, Insurance
66-3 Code, the insurance laws, including the group hospital service
66-4 corporation law, do not apply to physicians and providers; however,
66-5 [provided that Article 21.58A shall not apply to utilization review
66-6 undertaken by] a physician or provider who conducts utilization
66-7 review during [in] the ordinary course of treatment of patients [by
66-8 a physician or provider] pursuant to a joint or delegated review
66-9 agreement or agreements with a health maintenance organization on
66-10 services rendered by the physician or provider may not be required
66-11 to obtain certification under Section 3, Article 21.58A, Insurance
66-12 Code.
66-13 SECTION 23. Section 28, Texas Health Maintenance
66-14 Organization Act (Article 20A.28, Vernon's Texas Insurance Code),
66-15 is amended to read as follows:
66-16 Sec. 28. AUTHORITY TO CONTRACT. The commissioner [or
66-17 board], in carrying out the commissioner's [their] obligations
66-18 under this Act, may contract with other state agencies or, after
66-19 notice and opportunity for hearing, with other qualified persons to
66-20 make recommendations concerning the determinations to be made by
66-21 the commissioner [or board].
66-22 SECTION 24. Section 32, Texas Health Maintenance
66-23 Organization Act (Article 20A.32, Vernon's Texas Insurance Code),
66-24 is amended to read as follows:
66-25 Sec. 32. FEES. (a)(1) Every organization subject to this
66-26 chapter shall pay to the commissioner the following fees:
66-27 (A) for filing and review of its original
67-1 application for a certificate of authority, a fee in an amount not
67-2 to exceed $18,000 [$15,000] as determined by the commissioner
67-3 [State Board of Insurance];
67-4 (B) for filing each annual report pursuant to
67-5 Section 10 of this Act, a fee in an amount not to exceed $500 as
67-6 determined by the commissioner [State Board of Insurance];
67-7 (C) the expenses of all examinations of health
67-8 maintenance organizations made on behalf of the State of Texas by
67-9 the commissioner [State Board of Insurance] or under the
67-10 commissioner's [its] authority in such amounts as the commissioner
67-11 shall certify to be just and reasonable;
67-12 (D) the expenses of an examination under Section
67-13 17(a) of this Act incurred by the commissioner or under the
67-14 commissioner's authority, if:
67-15 (i) examination expenses are the expenses
67-16 attributable directly to a specific examination, including the
67-17 actual salaries and expenses of the examiners directly attributable
67-18 to that examination, as determined under rules adopted by the
67-19 commissioner; and
67-20 (ii) the expenses are assessed by the
67-21 commissioner and paid in accordance with rules adopted by the
67-22 commissioner;
67-23 (E) the licensing, appointment, and examination
67-24 fees pursuant to Section 15 of this[, Texas Health Maintenance
67-25 Organization] Act [(Article 20A.15, Vernon's Texas Insurance
67-26 Code)];
67-27 (F) [(E)] for filing an evidence of coverage
68-1 which requires approval, a fee not to exceed $200 as determined by
68-2 the commissioner [State Board of Insurance]; and
68-3 (G) [(F)] for filings required by rule but which
68-4 do not require approval, a fee not to exceed $100 as determined by
68-5 the commissioner [State Board of Insurance].
68-6 (2) The commissioner [State Board of Insurance] shall,
68-7 within the limits fixed by this subsection, prescribe the fees to
68-8 be charged under this subsection.
68-9 (3) Fees collected under this subsection must be
68-10 deposited in the State Treasury to the credit of the Texas
68-11 Department [State Board] of Insurance operating fund.
68-12 (4) Notwithstanding Subdivision (1) of this
68-13 subsection, the comptroller shall collect the annual report filing
68-14 fee prescribed by Subdivision (1)(B) of this subsection.
68-15 (b)[(1) Every organization subject to this chapter shall pay
68-16 to the board the following fees:]
68-17 [(A) for review of its original application for
68-18 a certificate of authority, a fee in an amount not to exceed $3,000
68-19 as determined by the board and paid pursuant to rules adopted by
68-20 the board; and]
68-21 [(B) the expenses of an examination under
68-22 Section 17(b) of this Act incurred by the board or under its
68-23 authority.]
68-24 [(2) Examination expenses are the expenses
68-25 attributable directly to a specific examination including the
68-26 actual salaries and expenses of the examiners plus the cost of
68-27 administrative departmental expenses directly attributable to that
69-1 examination as determined under rules adopted by the board. The
69-2 expenses shall be assessed by the board and paid in accordance with
69-3 rules adopted by the board.]
69-4 [(3) Except as provided by Subdivision (4) of this
69-5 subsection, the amount paid by a health maintenance organization in
69-6 each taxable year under Subdivision (1)(B) of this subsection shall
69-7 be allowed as a credit on the amount of premium taxes to be paid by
69-8 the health maintenance organization for that taxable year.]
69-9 [(4)] The amount directly attributable to an
69-10 examination of the books, records, accounts, or principal offices
69-11 of a health maintenance organization located outside this state may
69-12 not be allowed as a credit against the amount of premium taxes to
69-13 be paid by the health maintenance organization.
69-14 [(5) The funds received by the board shall be
69-15 deposited in the state treasury to the credit of the Texas
69-16 Department of Health health maintenance organization fund, and
69-17 those funds shall be appropriated to the Texas Department of Health
69-18 to carry out the statutory duties of the board under this chapter.]
69-19 SECTION 25. Subsections (a), (b), (c), (e), and (g), Section
69-20 36, Texas Health Maintenance Organization Act (Article 20A.36,
69-21 Vernon's Texas Insurance Code), are amended to read as follows:
69-22 (a) The Health Maintenance Organization Solvency
69-23 Surveillance Committee is created under the direction of the
69-24 commissioner. The committee shall perform its functions under a
69-25 plan of operation approved by the commissioner [State Board of
69-26 Insurance]. The committee is composed of nine members appointed by
69-27 the commissioner [of insurance]. No two members may be employees
70-1 or officers of the same health maintenance organization or holding
70-2 company system. The qualifications for membership, terms of
70-3 office, and reimbursement of expenses shall be as provided by the
70-4 plan of operation approved by the commissioner [State Board of
70-5 Insurance]. A "member" is a Texas licensed health maintenance
70-6 organization as defined in Section 2(n) [2(j)] of this Act or a
70-7 public representative. The commissioner [of insurance] shall
70-8 appoint the member along with the officer or employee of the member
70-9 who shall serve on the committee if the member is a representative
70-10 of a Texas licensed health maintenance organization or its holding
70-11 company system. Five of the members shall represent health
70-12 maintenance organizations or their holding company system. Of the
70-13 health maintenance organization members, one shall be a single
70-14 health care service plan as defined in Section 2(y) [2(s)] of this
70-15 Act. The remaining health maintenance organization members shall
70-16 be selected by the commissioner [of insurance] with due
70-17 consideration of factors deemed appropriate including, but not
70-18 limited to, the varying categories of premium income and
70-19 geographical location.
70-20 A public representative may not be:
70-21 (1) an officer, director, or employee of a health
70-22 maintenance organization, a health maintenance organization agent,
70-23 or any other business entity regulated by the commissioner [State
70-24 Board of Insurance];
70-25 (2) a person required to register with the Texas
70-26 Ethics Commission [secretary of state] under Chapter 305,
70-27 Government Code; or
71-1 (3) related to a person described by Subdivision (1)
71-2 or (2) of this subsection within the second degree of affinity or
71-3 consanguinity.
71-4 (b)(1) The committee shall assist and advise the
71-5 commissioner relating to the detection and prevention of insolvency
71-6 problems regarding health maintenance organizations. The committee
71-7 shall also assist and advise the commissioner regarding any health
71-8 maintenance organization placed in rehabilitation, liquidation,
71-9 supervision, or conservation. The method of providing this
71-10 assistance and advice shall be as contained in the plan of
71-11 operation approved by the commissioner [State Board of Insurance].
71-12 (2) Reports regarding the financial condition of Texas
71-13 licensed health maintenance organizations and regarding the
71-14 financial condition, administration, and status of health
71-15 maintenance organizations in rehabilitation, liquidation,
71-16 supervision, or conservation shall be provided to the committee
71-17 members at meetings. Committee members shall not reveal the
71-18 condition of nor any information secured in the course of any
71-19 meeting of the Solvency Surveillance Committee with regard to any
71-20 corporation, form or person examined by the committee. Committee
71-21 proceedings shall be filed with the commissioner [and reported to
71-22 the members of the State Board of Insurance].
71-23 (c) To provide funds for the administrative expenses of the
71-24 commissioner [State Board of Insurance] regarding rehabilitation,
71-25 liquidation, supervision, or conservation of an impaired health
71-26 maintenance organization in this state, the committee, at the
71-27 commissioner's direction, shall assess each health maintenance
72-1 organization licensed in this state in the proportion that the
72-2 gross premiums of that health maintenance organization written in
72-3 this state during the preceding calendar year bear to the aggregate
72-4 gross premiums written in this state by all health maintenance
72-5 organizations, as furnished to the committee by the commissioner
72-6 after review of annual statements and other reports the
72-7 commissioner considers necessary. Assessments to supplement or pay
72-8 for administrative expenses of rehabilitation, liquidation,
72-9 supervision, or conservation may be made only after the
72-10 commissioner determines that adequate assets of the health
72-11 maintenance organization are not immediately available for those
72-12 purposes or that use of those assets could be detrimental to
72-13 rehabilitation, liquidation, supervision, or conservation. The
72-14 commissioner may abate or defer the assessments, either in whole or
72-15 in part, if, in the opinion of the commissioner, payment of the
72-16 assessment would endanger the ability of a health maintenance
72-17 organization to fulfill its contractual obligations. If an
72-18 assessment is abated or deferred, either in whole or in part, the
72-19 amount by which the assessment is abated or deferred may be
72-20 assessed against the remaining licensed health maintenance
72-21 organizations in a manner consistent with the basis for assessments
72-22 provided by the plan of operation approved by the commissioner
72-23 [State Board of Insurance]. The total of all assessments on a
72-24 health maintenance organization may not exceed one-quarter of one
72-25 percent of the health maintenance organization's gross premiums in
72-26 any one calendar year.
72-27 (e) Not later than the 180th day after the date on which the
73-1 final member of the committee is appointed, the committee shall
73-2 submit to the commissioner [State Board of Insurance] a plan of
73-3 operation. The plan of operation takes effect on approval in
73-4 writing by the commissioner [State Board of Insurance]. If the
73-5 committee fails to submit a suitable plan of operation within the
73-6 period set by this subsection, or if, after the adoption of a plan,
73-7 the committee fails to submit suitable amendments to the plan, the
73-8 commissioner [State Board of Insurance] may, after notice and
73-9 hearing, adopt rules as necessary to implement this Act. Those
73-10 rules continue in effect until modified by the commissioner [State
73-11 Board of Insurance] or superseded by a plan submitted by the
73-12 committee and approved by the commissioner [State Board of
73-13 Insurance].
73-14 (g) A licensed health maintenance organization or its agents
73-15 or employees, the committee or its agents, employees, or members,
73-16 or the [State Board of Insurance, the] commissioner[,] or the
73-17 commissioner's [their] representatives are not liable in a civil
73-18 action for any act taken or not taken in good faith in the
73-19 performance of powers and duties under this section.
73-20 SECTION 26. The Texas Health Maintenance Organization Act
73-21 (Article 20A.01 et seq., Vernon's Texas Insurance Code) is amended
73-22 by adding Sections 37 and 38 to read as follows:
73-23 Sec. 37. HEALTH MAINTENANCE ORGANIZATION QUALITY ASSURANCE.
73-24 (a) A health maintenance organization shall establish procedures
73-25 to ensure that the health care services provided to enrollees are
73-26 rendered under reasonable standards of quality of care consistent
73-27 with prevailing professionally recognized standards of medical
74-1 practice. Those procedures must include mechanisms to ensure
74-2 availability, accessibility, quality, and continuity of care.
74-3 (b) A health maintenance organization shall have an ongoing
74-4 internal quality assurance program to monitor and evaluate its
74-5 health care services, including primary and specialist physician
74-6 services, and ancillary and preventive health care services, in all
74-7 institutional and noninstitutional contexts. The commissioner by
74-8 rule may establish minimum standards and requirements for ongoing
74-9 internal quality assurance programs for health maintenance
74-10 organizations, including standards for ensuring availability,
74-11 accessibility, quality, and continuity of care.
74-12 (c) A health maintenance organization shall record formal
74-13 proceedings of quality assurance program activities and maintain
74-14 that documentation in a confidential manner. Quality assurance
74-15 program minutes shall be available to the commissioner.
74-16 (d) A health maintenance organization shall establish and
74-17 maintain a physician review panel to assist in reviewing medical
74-18 guidelines or criteria and to assist in determining the
74-19 prescription drugs to be covered by the health maintenance
74-20 organization, if the health maintenance organization offers a
74-21 prescription drug benefit.
74-22 (e) A health maintenance organization shall ensure the use
74-23 and maintenance of an adequate patient record system that will
74-24 facilitate documentation and retrieval of clinical information for
74-25 the purpose of the health maintenance organization's evaluation of
74-26 continuity and coordination of patient care and assessment of the
74-27 quality of health and medical care provided to enrollees.
75-1 (f) Enrollees' clinical records shall be available to the
75-2 commissioner for examination and review to determine compliance.
75-3 Those records are confidential and privileged, and are not subject
75-4 to the open records law, Chapter 552, Government Code, or to
75-5 subpoena, except to the extent necessary to enable the commissioner
75-6 to enforce this article.
75-7 (g) A health maintenance organization shall establish a
75-8 mechanism for the periodic reporting of quality assurance program
75-9 activities to its governing body, providers, and appropriate
75-10 organization staff.
75-11 (h) With the advice and assistance of the Texas State Board
75-12 of Pharmacy, the commissioner, not later than January 1, 1999,
75-13 shall adopt rules that require each health maintenance organization
75-14 to use standardized pharmacy benefit cards for its enrollees that
75-15 meet all of the requirements of the United States Department of
75-16 Health and Human Services and the National Council of Prescription
75-17 Drug Programs (NCPDP), including:
75-18 (1) an unadultered patient identification number;
75-19 (2) the patient co-payment or cash discount amount;
75-20 and
75-21 (3) the payer identification number.
75-22 Sec. 38. EFFECT OF DENTAL POINT-OF-SERVICE OPTION ON HEALTH
75-23 MAINTENANCE ORGANIZATION. (a) Each dental health maintenance
75-24 organization or other single service health maintenance
75-25 organization that provides dental benefits is subject to this
75-26 section. This section does not apply to a health maintenance
75-27 organization with 10,000 or fewer enrollees in this state enrolled
76-1 in dental benefit plans based on a provider panel.
76-2 (b) If an employer, association, or other private group
76-3 arrangement that employs or has 25 or more employees or members
76-4 offers and contributes to the cost of dental benefit plan coverage
76-5 to employees or individuals only through a provider panel, the
76-6 health maintenance organization with which the employer,
76-7 association, or other private group arrangement is contracting for
76-8 the coverage shall offer, or contract with another entity to offer,
76-9 a dental point-of-service option to the employer, association, or
76-10 other private group arrangement. The employer may offer the dental
76-11 point-of-service option to the employee or individual to accept or
76-12 reject.
76-13 (c) If a health maintenance organization's dental provider
76-14 panel is the sole delivery system offered to employees by an
76-15 employer, the health maintenance organization:
76-16 (1) shall offer the employer a dental point-of-service
76-17 option;
76-18 (2) may not impose a minimum participation level on
76-19 the dental point-of-service option; and
76-20 (3) as part of the group enrollment application, shall
76-21 provide to each employer disclosure statements as required by rules
76-22 adopted under this code for each dental plan offered.
76-23 (d) An employer may require an employee or individual who
76-24 accepts the point-of-service option to be responsible for the
76-25 payment of a premium over the amount of the premium for the
76-26 coverage provided to employees or members under the dental benefit
76-27 plan offered through a provider panel either directly or by payroll
77-1 deduction in the same manner in which the other premium is paid.
77-2 The premium for the point-of-service option must be based on the
77-3 actuarial value of that coverage.
77-4 (e) Different cost-sharing provisions may be imposed for the
77-5 point-of-service option.
77-6 (f) An employer may charge an employee or individual who
77-7 accepts the point-of-service option a reasonable administrative fee
77-8 for costs associated with the employer's reasonable administration
77-9 of the point-of-service option.
77-10 (g) For purposes of this section:
77-11 (1) "Point-of-service option" means a plan provided
77-12 through a contractual arrangement under which indemnity benefits
77-13 for the cost of dental care services, other than emergency care or
77-14 emergency dental care, are provided by an insurer or group hospital
77-15 service corporation in conjunction with corresponding benefits
77-16 arranged or provided by a health maintenance organization, and
77-17 under which an enrollee may choose to obtain benefits or services
77-18 under either the indemnity plan or the health maintenance
77-19 organization plan in accordance with specific provisions of a
77-20 point-of-service contract.
77-21 (2) "Provider panel" means those providers with which
77-22 a health maintenance organization contracts to provide dental
77-23 services to enrollees covered under the dental benefit plan.
77-24 SECTION 27. Section 38, Texas Health Maintenance
77-25 Organization Act (Article 20A.38, Vernon's Texas Insurance Code),
77-26 as added by this Act, takes effect January 1, 1998.
77-27 SECTION 28. This Act applies only to an evidence of coverage
78-1 that is delivered, issued for delivery, or renewed on or after
78-2 January 1, 1998. An evidence of coverage that is delivered, issued
78-3 for delivery, or renewed before January 1, 1998, is governed by the
78-4 law as it existed immediately before the effective date of this
78-5 Act, and that law is continued in effect for this purpose.
78-6 SECTION 29. Except as provided by Section 27 of this Act,
78-7 this Act takes effect September 1, 1997.
78-8 SECTION 30. The importance of this legislation and the
78-9 crowded condition of the calendars in both houses create an
78-10 emergency and an imperative public necessity that the
78-11 constitutional rule requiring bills to be read on three several
78-12 days in each house be suspended, and this rule is hereby suspended.