1-1 By: Sibley, Nelson, Harris, Madla, Cain S.B. No. 385
1-2 (In the Senate - Filed January 30, 1997; February 3, 1997,
1-3 March 3, 1997, reported adversely, with favorable Committee
1-4 Substitute; March 5, 1997, recommitted to Committee on Economic
1-5 Development; read first time and referred to Committee on Economic
1-6 Development; March 6, 1997, reported adversely, with favorable
1-7 Committee Substitute by the following vote: Yeas 7, Nays 0;
1-8 March 6, 1997, sent to printer.)
1-9 COMMITTEE SUBSTITUTE FOR S.B. No. 385 By: Sibley
1-10 A BILL TO BE ENTITLED
1-11 AN ACT
1-12 relating to the regulation of health maintenance organizations.
1-13 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-14 SECTION 1. Section 2, Texas Health Maintenance Organization
1-15 Act (Article 20A.02, Vernon's Texas Insurance Code), is amended to
1-16 read as follows:
1-17 Sec. 2. DEFINITIONS. For the purposes of this Act:
1-18 (a) "Adverse determination" means a determination by a
1-19 health maintenance organization or a utilization review agent that
1-20 the health care services furnished to a patient or proposed to be
1-21 furnished to a patient are not medically necessary or not
1-22 appropriate in the allocation of health care resources.
1-23 (b) "Basic health care services" means health care services
1-24 which the commissioner determines an enrolled population might
1-25 reasonably require in order to be maintained in good health,
1-26 including, at [as] a minimum, services designated as basic health
1-27 services under Section 1302, Title XIII, Public Health Service Act
1-28 (42 U.S.C. Section 300e-1(1)) [emergency care, inpatient hospital
1-29 and medical services, and outpatient medical services].
1-30 [(b) "Board" means the Texas Board of Health.]
1-31 (c) "Capitation" means a method of compensation to a
1-32 physician or provider based on a predetermined payment per enrollee
1-33 for a specified period of time for certain enrollees in exchange
1-34 for arranging for or providing a defined set of covered health care
1-35 services to such enrollees for a specified period of time,
1-36 regardless of the amount of services actually provided.
1-37 (d) "Commissioner" means the commissioner of insurance.
1-38 (e) "Complainant" means an enrollee, or a physician,
1-39 provider, or other person designated to act on behalf of an
1-40 enrollee, who files a complaint.
1-41 (f) "Complaint" means any dissatisfaction expressed by a
1-42 complainant orally or in writing to the health maintenance
1-43 organization with any aspect of the health maintenance
1-44 organization's operation, including but not limited to
1-45 dissatisfaction with plan administration; appeal of an adverse
1-46 determination; the denial, reduction, or termination of a service;
1-47 the way a service is provided; or disenrollment decisions,
1-48 expressed by a complainant. A complaint is not a misunderstanding
1-49 or a problem of misinformation that is resolved promptly by
1-50 clearing up the misunderstanding or supplying the appropriate
1-51 information to the satisfaction of the enrollee.
1-52 (g) "Emergency care" means health care services provided in
1-53 a hospital emergency facility or comparable facility to evaluate
1-54 and stabilize medical conditions of a recent onset and severity,
1-55 including but not limited to severe pain, that would lead a prudent
1-56 layperson, possessing an average knowledge of medicine and health,
1-57 to believe that his or her condition, sickness, or injury is of
1-58 such a nature that failure to get immediate medical care could
1-59 result in:
1-60 (1) placing the patient's health in serious jeopardy;
1-61 (2) serious impairment to bodily functions;
1-62 (3) serious dysfunction of any bodily organ or part;
1-63 (4) serious disfigurement; or
1-64 (5) in the case of a pregnant woman, serious jeopardy
2-1 to the health of the fetus.
2-2 (h) [(d)] "Enrollee" means an individual who is enrolled in
2-3 a health care plan, including covered dependents.
2-4 (i) [(e)] "Evidence of coverage" means any certificate,
2-5 agreement, or contract issued to an enrollee setting out the
2-6 coverage to which the enrollee is entitled.
2-7 (j) [(f)] "Group hospital service corporation" means a
2-8 nonprofit corporation organized and operating under Chapter 20 of
2-9 the Insurance Code.
2-10 (k) [(g)] "Health care" means prevention, maintenance,
2-11 rehabilitation, pharmaceutical, and chiropractic services provided
2-12 by qualified persons other than medical care.
2-13 (l) [(h)] "Health care plan" means any plan whereby any
2-14 person undertakes to provide, arrange for, pay for, or reimburse
2-15 any part of the cost of any health care services; provided,
2-16 however, a part of such plan consists of arranging for or the
2-17 provision of health care services, as distinguished from
2-18 indemnification against the cost of such service, on a prepaid
2-19 basis through insurance or otherwise.
2-20 (m) [(i)] "Health care services" means any services,
2-21 including the furnishing to any individual of pharmaceutical
2-22 services, medical, chiropractic, or dental care, or hospitalization
2-23 or incident to the furnishing of such services, care, or
2-24 hospitalization, as well as the furnishing to any person of any and
2-25 all other services for the purpose of preventing, alleviating,
2-26 curing or healing human illness or injury or a single health care
2-27 service plan.
2-28 (n) [(j)] "Health maintenance organization" means any person
2-29 who arranges for or provides a health care plan or a single health
2-30 care service plan to enrollees on a prepaid basis.
2-31 (o) "Life threatening" means a disease or condition for
2-32 which the likelihood of death is high unless the course of the
2-33 disease or condition is interrupted.
2-34 (p) [(k)] "Medical care" means furnishing those services
2-35 defined as practicing medicine under Section 1.03(8), Medical
2-36 Practice Act (Article 4495b, Vernon's Texas Civil Statutes).
2-37 (q) [(l)] "Person" means any natural or artificial person,
2-38 including, but not limited to, individuals, partnerships,
2-39 associations, organizations, trusts, hospital districts, limited
2-40 liability companies, limited liability partnerships, or
2-41 corporations.
2-42 (r) [(m)] "Physician" means:
2-43 (1) an individual licensed to practice medicine in
2-44 this state;
2-45 (2) a professional association organized under the
2-46 Texas Professional Association Act (Article 1528f, Vernon's Texas
2-47 Civil Statutes) or a nonprofit health corporation certified under
2-48 Section 5.01, Medical Practice Act (Article 4495b, Vernon's Texas
2-49 Civil Statutes); or
2-50 (3) another person wholly owned by physicians.
2-51 (s) "Prospective enrollee" means:
2-52 (1) in the case of an individual who is a member of a
2-53 group, an individual eligible for enrollment in a health
2-54 maintenance organization purchased through that individual's group;
2-55 or
2-56 (2) in the case of an individual who is not a member
2-57 of a group or whose group has not purchased or does not intend to
2-58 purchase a health maintenance organization plan, an individual who
2-59 has expressed an interest in purchasing individual health
2-60 maintenance organization coverage and who is eligible for coverage
2-61 by the health maintenance organization.
2-62 (t) [(n)] "Provider" means:
2-63 (1) any person other than a physician, including a
2-64 licensed doctor of chiropractic, registered nurse, pharmacist,
2-65 optometrist, pharmacy, hospital, or other institution or
2-66 organization or person that is licensed or otherwise authorized to
2-67 provide a health care service in this state;
2-68 (2) a person who is wholly owned or controlled by a
2-69 provider or by a group of providers who are licensed to provide the
3-1 same health care service; or
3-2 (3) a person who is wholly owned or controlled by one
3-3 or more hospitals and physicians, including a physician-hospital
3-4 organization.
3-5 (u) [(o)] "Sponsoring organization" means a person who
3-6 guarantees the uncovered expenses of the health maintenance
3-7 organization and who is financially capable, as determined by the
3-8 commissioner, of meeting the obligations resulting from those
3-9 guarantees.
3-10 (v) [(p)] "Uncovered expenses" means the estimated
3-11 administrative expenses and the estimated cost of health care
3-12 services that are not guaranteed, insured, or assumed by a person
3-13 other than the health maintenance organization. Health care
3-14 services may be considered covered if the physician or provider
3-15 agrees in writing that enrollees shall in no way be liable,
3-16 assessable, or in any way subject to payment for services except as
3-17 described in the evidence of coverage issued to the enrollee under
3-18 Section 9 of this Act. The amount due on loans in the next
3-19 calendar year will be considered uncovered expenses unless
3-20 specifically subordinated to uncovered medical and health care
3-21 expenses or unless guaranteed by the sponsoring organization.
3-22 (w) [(q)] "Uncovered liabilities" means obligations
3-23 resulting from unpaid uncovered expenses, the outstanding
3-24 indebtedness of loans that are not specifically subordinated to
3-25 uncovered medical and health care expenses or guaranteed by the
3-26 sponsoring organization, and all other monetary obligations that
3-27 are not similarly subordinated or guaranteed.
3-28 (x) [(r)] "Single health care service" means a health care
3-29 service that an enrolled population may reasonably require in order
3-30 to be maintained in good health with respect to a particular health
3-31 care need for the purpose of preventing, alleviating, curing, or
3-32 healing human illness or injury of a single specified nature and
3-33 that is to be provided by one or more persons each of whom is
3-34 licensed by the state to provide that specific health care service.
3-35 (y) [(s)] "Single health care service plan" means a plan
3-36 under which any person undertakes to provide, arrange for, pay for,
3-37 or reimburse any part of the cost of a single health care service,
3-38 provided, that a part of the plan consists of arranging for or the
3-39 provision of the single health care service, as distinguished from
3-40 an indemnification against the cost of that service, on a prepaid
3-41 basis through insurance or otherwise and that no part of that plan
3-42 consists of arranging for the provision of more than one health
3-43 care need of a single specified nature.
3-44 (z) [(t) "Emergency care" means bona fide emergency services
3-45 provided after the sudden onset of a medical condition manifesting
3-46 itself by acute symptoms of sufficient severity, including severe
3-47 pain, such that the absence of immediate medical attention could
3-48 reasonably be expected to result in:]
3-49 [(1) placing the patient's health in serious jeopardy;]
3-50 [(2) serious impairment to bodily functions; or]
3-51 [(3) serious dysfunction of any bodily organ or part.]
3-52 [(u)] "Health maintenance organization delivery network"
3-53 means a health care delivery system in which a health maintenance
3-54 organization arranges for health care services directly or
3-55 indirectly through contracts and subcontracts with providers and
3-56 physicians.
3-57 SECTION 2. Section 3, Texas Health Maintenance Organization
3-58 Act (Article 20A.03, Vernon's Texas Insurance Code), is amended by
3-59 adding Subsections (e), (f), and (g) to read as follows:
3-60 (e) No person or provider shall directly or indirectly
3-61 perform any of the acts of a health maintenance organization, as
3-62 defined in this Act, except as provided by and in accordance with
3-63 the specific authorization of this Act.
3-64 (f) Any person or provider who directly or indirectly
3-65 performs any of the acts of a health maintenance organization
3-66 without having first obtained a certificate of authority from the
3-67 Texas Department of Insurance shall be subject to all enforcement
3-68 processes and procedures of an authorized insurer pursuant to
3-69 Sections 3 and 3A, Article 1.14-1, Insurance Code.
4-1 (g) The commissioner shall have subpoena authority in
4-2 accordance with Article 1.19-1, Insurance Code.
4-3 SECTION 3. Section 4, Texas Health Maintenance Organization
4-4 Act (Article 20A.04, Vernon's Texas Insurance Code), is amended to
4-5 read as follows:
4-6 Sec. 4. APPLICATION FOR CERTIFICATE OF AUTHORITY. (a) Each
4-7 application for a certificate of authority shall be on a form
4-8 prescribed by rule of the commissioner and shall be verified by the
4-9 applicant, an officer, or other authorized representative of the
4-10 applicant, and shall set forth or be accompanied by the following:
4-11 (1) a copy of the basic organizational document, if
4-12 any, of the applicant, such as the articles of incorporation,
4-13 articles of association, partnership agreement, trust agreement, or
4-14 other applicable documents, and all amendments thereto;
4-15 (2) a copy of the bylaws, rules and regulations, or
4-16 similar document, if any, regulating the conduct of the internal
4-17 affairs of the applicant;
4-18 (3) a list of the names, addresses, and official
4-19 positions of the persons who are to be responsible for the conduct
4-20 of the affairs of the applicant, including all members of the board
4-21 of directors, board of trustees, executive committee, or other
4-22 governing body or committee, the principal officer in the case of a
4-23 corporation, and the partnership or members in the case of a
4-24 partnership or association;
4-25 (4) a copy of any independent or other contract made
4-26 or to be made between any provider, physician, or persons listed in
4-27 Paragraph (3) hereof and the applicant;
4-28 (5) a copy of the form of evidence of coverage to be
4-29 issued to the enrollee;
4-30 (6) a copy of the form of the group contract, if any,
4-31 which is to be issued to employers, unions, trustees, or other
4-32 organizations;
4-33 (7) a current financial statement that includes:
4-34 (A) the sources and application of funds;
4-35 (B) projected financial statements during the
4-36 initial period of operations;
4-37 (C) a balance sheet beginning as of the date of
4-38 the expected start of operations;
4-39 (D) a statement of revenue and expenses with
4-40 expected member months; and
4-41 (E) a cash flow statement that states any
4-42 capital expenditures, purchase and sale of investments, and
4-43 deposits with the state;
4-44 (8) the schedule of charges to be used during the
4-45 first 12 months of operation;
4-46 (9) a statement acknowledging that all lawful process
4-47 in any legal action or proceeding against the health maintenance
4-48 organization on a cause of action arising in this state is valid if
4-49 served in accordance with Article 1.36, Insurance Code;
4-50 (10) a statement reasonably describing the geographic
4-51 area or areas to be served;
4-52 (11) a description of the complaint procedures to be
4-53 utilized;
4-54 (12) a description of the procedures and programs to
4-55 be implemented to meet the quality of health care requirements set
4-56 forth herein; [and]
4-57 (13) a written description of health care plan terms
4-58 and conditions made available to any current or prospective group
4-59 contract holder or current or prospective enrollee of the health
4-60 maintenance organization pursuant to the requirements of Section 11
4-61 of this Act;
4-62 (14) network configuration information, including an
4-63 explanation of the adequacy of the physician and other provider
4-64 network configuration; the information provided must include the
4-65 names of physicians, specialty physicians, and other providers by
4-66 zip code or zip code map and indicate whether each physician or
4-67 other provider is accepting new patients from the health
4-68 maintenance organization;
4-69 (15) a written description of the types of
5-1 compensation arrangements, such as compensation based on
5-2 fee-for-service arrangements, risk-sharing arrangements, or
5-3 capitated risk arrangements, made or to be made with physicians and
5-4 providers in exchange for the provision of or an arrangement to
5-5 provide health care services to enrollees, including any financial
5-6 incentives for physicians and providers; such compensation
5-7 arrangements shall be confidential and not subject to the open
5-8 records law, Chapter 552, Government Code;
5-9 (16) documentation demonstrating that the health
5-10 maintenance organization will pay for emergency care services
5-11 performed by nonnetwork physicians or providers at the negotiated
5-12 or usual and customary rate and that the health care plan contains,
5-13 without regard to whether the physician or provider furnishing the
5-14 services has a contractual or other arrangement with the entity to
5-15 provide items or services to covered individuals, the following
5-16 provisions and procedures for coverage of emergency care services:
5-17 (A) any medical screening examination or other
5-18 evaluation required by state or federal law that is necessary to
5-19 determine whether an emergency medical condition exists will be
5-20 provided to covered enrollees in a hospital emergency facility or
5-21 comparable facility;
5-22 (B) necessary emergency care services will be
5-23 provided to covered enrollees, including the treatment and
5-24 stabilization of an emergency medical condition;
5-25 (C) services originated in a hospital emergency
5-26 facility or comparable facility following treatment or
5-27 stabilization of an emergency medical condition will be provided to
5-28 covered enrollees as approved by the health maintenance
5-29 organization, provided that the health maintenance organization is
5-30 required to approve or deny coverage of poststabilization care as
5-31 requested by a treating physician or provider within the time
5-32 appropriate to the circumstances relating to the delivery of the
5-33 services and the condition of the patient, but in no case to exceed
5-34 one hour from the time of the request; the health maintenance
5-35 organization must respond to inquiries from the treating physician
5-36 or provider in compliance with this provision in the health
5-37 maintenance organization's plan; and
5-38 (17) such other information as the commissioner may
5-39 require to make the determinations required by this Act.
5-40 (b) The commissioner [State Board of Insurance] may
5-41 promulgate such reasonable rules and regulations as the
5-42 commissioner [it] deems necessary to the proper administration of
5-43 this Act to require a health maintenance organization, subsequent
5-44 to receiving its certificate of authority, to submit the
5-45 modifications or amendments to the operations or documents
5-46 described in Subsection (a) of this section to the commissioner,
5-47 either for his approval or for information only, prior to the
5-48 effectuation of the modification or amendment or to require the
5-49 health maintenance organization to indicate the modifications to
5-50 [both the board and] the commissioner at the time of the next site
5-51 visit or examination. As soon as reasonably possible after any
5-52 filing for approval required by this subsection is made, the
5-53 commissioner shall in writing approve or disapprove it. Any
5-54 modification or amendment for which the commissioner's approval is
5-55 required shall be considered approved unless disapproved within 30
5-56 days; provided that the commissioner may postpone the action for
5-57 such further time, not exceeding an additional 30 days, as
5-58 necessary for proper consideration.
5-59 SECTION 4. Section 5, Texas Health Maintenance Organization
5-60 Act (Article 20A.05, Vernon's Texas Insurance Code), is amended to
5-61 read as follows:
5-62 Sec. 5. ISSUANCE OF CERTIFICATE OF AUTHORITY. (a)[(1) Upon
5-63 receipt of an application for issuance of a certificate of
5-64 authority, the commissioner shall begin consideration of the
5-65 application and forthwith transmit copies of such application and
5-66 accompanying documents to the board.]
5-67 [(2) The board shall determine whether the applicant
5-68 for a certificate of authority, with respect to health care
5-69 services to be furnished:]
6-1 [(A) has demonstrated the willingness and
6-2 potential ability to assure that such health care services will be
6-3 provided in a manner to assure both availability and accessibility
6-4 of adequate personnel and facilities, in a manner enhancing
6-5 availability, accessibility, and continuity of services;]
6-6 [(B) has arrangements, established in accordance
6-7 with rules and regulations promulgated by the board with the
6-8 concurrence of the commissioner, for an ongoing quality of health
6-9 care assurance program concerning health care processes and
6-10 outcome; and]
6-11 [(C) has a procedure, established by rules and
6-12 regulations of the board with the concurrence of the commissioner,
6-13 to develop, compile, evaluate, and report statistics relating to
6-14 the cost of operation, the pattern of utilization of its services,
6-15 availability and accessibility of its services.]
6-16 [(3) Within 45 days of receipt of the application by
6-17 the board for issuance of a certificate of authority, the board
6-18 shall certify to the commissioner whether the proposed health
6-19 maintenance organization meets the requirements of this section.
6-20 If the board certifies that the health maintenance organization
6-21 does not meet such requirements, it shall specify in what respects
6-22 it is deficient.]
6-23 [(b)] The commissioner shall, after notice and hearing,
6-24 issue or deny a certificate of authority to any person filing an
6-25 application pursuant to Section 4 of this Act, within 75 days of
6-26 the receipt of a completed application [the certification of the
6-27 board]; provided, however, that if notice and the opportunity for a
6-28 hearing is involved in a particular issuance or denial, then the
6-29 matter must be scheduled for a hearing within 75 days of the
6-30 receipt of a completed application. In any event, the commissioner
6-31 may grant a delay of final action on the application to an
6-32 applicant. Issuance of the certificate of authority shall be
6-33 granted upon payment of the application fee prescribed in Section
6-34 32 of this Act if the commissioner is satisfied that:
6-35 (1) the applicant for a certificate of authority, with
6-36 respect to health care services to be furnished:
6-37 (A) has demonstrated the willingness and
6-38 potential ability to assure that such health care services will be
6-39 provided in a manner to assure both availability and accessibility
6-40 of adequate personnel and facilities, in a manner enhancing
6-41 availability, accessibility, quality of care, and continuity of
6-42 services;
6-43 (B) has arrangements, established in accordance
6-44 with rules and regulations promulgated by the commissioner, for an
6-45 ongoing quality of health care assurance program concerning health
6-46 care processes and outcome; and
6-47 (C) has a procedure, established by rules and
6-48 regulations of the commissioner to develop, compile, evaluate, and
6-49 report statistics relating to the cost of operation, the pattern of
6-50 utilization of its services, and availability and accessibility of
6-51 its services; [board certifies that the health maintenance
6-52 organization's proposed plan of operation meets the requirements of
6-53 Subsection (a)(2) of this section; and]
6-54 (2) [the commissioner is satisfied that:]
6-55 [(A)] the person responsible for the conduct of
6-56 the affairs of the applicant is competent, trustworthy, and
6-57 possesses a good reputation;
6-58 (3) [(B)] the health care plan or single health care
6-59 service plan constitutes an appropriate mechanism whereby the
6-60 health maintenance organization will effectively provide or arrange
6-61 for the provision of basic health care services or single health
6-62 care service on a prepaid basis, through insurance or otherwise,
6-63 except to the extent of reasonable requirements for co-payment;
6-64 (4) [(C)] the health maintenance organization is fully
6-65 responsible and may reasonably be expected to meet its obligations
6-66 to enrollees and prospective enrollees. In making this
6-67 determination, the commissioner shall consider:
6-68 (A) [(i)] the financial soundness of the health
6-69 care plan's arrangement for health care services and a schedule of
7-1 charges used in connection therewith;
7-2 (B) [(ii)] the adequacy of working capital;
7-3 (C) [(iii)] any agreement with an insurer, group
7-4 hospital service corporation, a political subdivision of
7-5 government, or any other organization for insuring the payment of
7-6 the cost of health care services or the provision for automatic
7-7 applicability of an alternative coverage in the event of
7-8 discontinuance of plan;
7-9 (D) [(iv)] any agreement which provides for the
7-10 provision of health care services; and
7-11 (E) [(v)] any deposit of cash or securities
7-12 submitted in accordance with Section 13 of this Act as a guarantee
7-13 that the obligations will be duly performed; and
7-14 (5) [(D)] nothing in the proposed method of operation,
7-15 as shown by the information submitted pursuant to Section 4 of this
7-16 Act, or by independent investigation, is contrary to Texas law.
7-17 (b) [(c)] If [the board or] the commissioner[, or both,]
7-18 shall certify that the health maintenance organization's proposed
7-19 plan of operation does not meet the requirements of this section,
7-20 the commissioner shall not issue the certificate of authority. The
7-21 commissioner shall notify the applicant that it is deficient[,] and
7-22 shall specify in what respects it is deficient.
7-23 (c) [(d)] A certificate of authority shall continue in force
7-24 as long as the person to whom it is issued meets the requirements
7-25 of this Act or until suspended or revoked by the commissioner or
7-26 terminated at the request of the certificate holder. Any change in
7-27 control, as defined by Article 21.49--1 of the Insurance Code of
7-28 Texas, of the health maintenance organization, shall be subject to
7-29 the approval of the commissioner.
7-30 SECTION 5. Section 9, Texas Health Maintenance Organization
7-31 Act (Article 20A.09, Vernon's Texas Insurance Code), as amended by
7-32 Chapters 1091 and 1096, Acts of the 70th Legislature, Regular
7-33 Session, 1987, is amended to read as follows:
7-34 Sec. 9. EVIDENCE OF COVERAGE AND CHARGES. (a)(1) Every
7-35 enrollee residing in this state is entitled to evidence of coverage
7-36 under a health care plan. If the enrollee obtains coverage under a
7-37 health care plan through an insurance policy or a contract issued
7-38 by a group hospital service corporation, whether by option or
7-39 otherwise, the insurer or the group hospital service corporation
7-40 shall issue the evidence of coverage. Otherwise, the health
7-41 maintenance organization shall issue the evidence of coverage.
7-42 (2) No evidence of coverage, or amendment thereto,
7-43 shall be issued or delivered to any person in this state until a
7-44 copy of the form of evidence of coverage, or amendment thereto, has
7-45 been filed with and approved by the commissioner.
7-46 (3) An evidence of coverage shall contain:
7-47 (A) no provisions or statements which are
7-48 unjust, unfair, inequitable, misleading, deceptive, which encourage
7-49 misrepresentation, or which are untrue, misleading, or deceptive as
7-50 defined in Section 14 of this Act; [and]
7-51 (B) a clear and complete statement, if a
7-52 contract, or a reasonably complete facsimile, if a certificate, of:
7-53 (i) the medical, health care services, or
7-54 single health care service and the issuance of other benefits, if
7-55 any, to which the enrollee is entitled under the health care plan
7-56 or single health care service plan;
7-57 (ii) any limitation on the services, kinds
7-58 of services, benefits, or kinds of benefits to be provided,
7-59 including any deductible or co-payment feature;
7-60 (iii) where and in what manner information
7-61 is available as to how services may be obtained; and
7-62 (iv) a clear and understandable
7-63 description of the health maintenance organization's methods for
7-64 resolving enrollee complaints. Any subsequent changes may be
7-65 evidenced in a separate document issued to the enrollee;
7-66 (C) a provision that, if medically necessary
7-67 covered services are not available through network physicians or
7-68 providers, the health maintenance organization must, on the request
7-69 of a network physician or provider, within a reasonable time period
8-1 allow referral to a nonnetwork physician or provider and shall
8-2 fully reimburse the nonnetwork physician or provider at the usual
8-3 and customary or an agreed rate; each contract must further provide
8-4 for a review by a specialist of the same, or a similar, specialty
8-5 as the physician or provider to whom a referral is requested before
8-6 the health maintenance organization may deny a referral;
8-7 (D) a provision to allow enrollees with chronic,
8-8 disabling, or life-threatening illnesses to apply to the health
8-9 maintenance organization's medical director to utilize a nonprimary
8-10 care physician specialist as a primary care physician, provided
8-11 that:
8-12 (i) the request includes information
8-13 specified by the health maintenance organization, including but not
8-14 limited to certification of medical need, and is signed by the
8-15 enrollee and the nonprimary care physician specialist interested in
8-16 serving as the primary care physician;
8-17 (ii) the nonprimary care physician
8-18 specialist meets the health maintenance organization's requirements
8-19 for primary care physician participation; and
8-20 (iii) the nonprimary care physician
8-21 specialist is willing to accept the coordination of all of the
8-22 enrollee's health care needs;
8-23 (E) a provision that if the request for special
8-24 consideration specified in Paragraph (D) of this subdivision is
8-25 denied, an enrollee may appeal the decision through the health
8-26 maintenance organization's established complaint and appeals
8-27 process; and
8-28 (F) a provision that the effective date of the
8-29 new designation of a nonprimary care physician specialist as set
8-30 out in Paragraph (D) of this subdivision shall not be retroactive;
8-31 the health maintenance organization may not reduce the amount of
8-32 compensation owed to the original primary care physician prior to
8-33 the date of the new designation.
8-34 (4) Any form of the evidence of coverage or group
8-35 contract to be used in this state, and any amendments thereto, are
8-36 subject to the filing and approval requirements of Subsection (c)
8-37 of this section, unless it is subject to the jurisdiction of the
8-38 commissioner under the laws governing health insurance or group
8-39 hospital service corporations, in which event the filing and
8-40 approval provisions of such law shall apply. To the extent,
8-41 however, that such provisions do not apply to the requirements of
8-42 Subdivision (3)[, Subsection (a)] of this subsection [section], the
8-43 requirements of Subdivision (3) shall be applicable.
8-44 (b) The formula or method for calculating the schedule of
8-45 charges for enrollee coverage for medical services or health care
8-46 services must be filed with the commissioner before it is used in
8-47 conjunction with any health care plan. The formula or method must
8-48 be established in accordance with actuarial principles for the
8-49 various categories of enrollees. The charges resulting from the
8-50 application of the formula or method may not be altered for an
8-51 individual enrollee based on the status of that enrollee's health.
8-52 The formula or method must produce charges that are not excessive,
8-53 inadequate, or unfairly discriminatory, and benefits must be
8-54 reasonable with respect to the rates produced by the formula or
8-55 method. A statement by a qualified actuary that certifies the
8-56 appropriateness of the formula or method must accompany the filing
8-57 together with supporting information considered adequate by the
8-58 commissioner.
8-59 (c) The commissioner shall, within a reasonable period,
8-60 approve any form of the evidence of coverage or group contract, or
8-61 amendment thereto, if the requirements of this section are met.
8-62 After notice and opportunity for hearing, the commissioner may
8-63 withdraw previous approval of any form, if the commissioner
8-64 determines that it violates or does not comply with this Act or a
8-65 rule adopted by the commissioner [State Board of Insurance]. It
8-66 shall be unlawful to issue such form until approved. If the
8-67 commissioner disapproves such form, the commissioner shall notify
8-68 the filer. In the notice, the commissioner shall specify the
8-69 reason for the disapproval. A hearing shall be granted within 30
9-1 days after a request in writing by the person filing. If the
9-2 commissioner does not disapprove any form within 30 days after the
9-3 filing of such form it shall be considered approved; provided that
9-4 the commissioner may by written notice extend the period for
9-5 approval or disapproval of any filing for such further time, not
9-6 exceeding an additional 30 days, as necessary for proper
9-7 consideration of the filing.
9-8 (d) The commissioner may require the submission of whatever
9-9 relevant information he or she deems necessary in determining
9-10 whether to approve or disapprove a filing made pursuant to this
9-11 section.
9-12 (e) Article 3.74 of the Texas Insurance Code applies to
9-13 health maintenance organizations other than those health
9-14 maintenance organizations offering only a single health care
9-15 service plan.
9-16 (f) Article 3.51-9 of the Texas Insurance Code applies to
9-17 health maintenance organizations other than those health
9-18 maintenance organizations offering only a single health care
9-19 service plan.
9-20 (g) Evidence of coverage does not constitute a health
9-21 insurance policy as that term is defined by the Insurance Code.
9-22 (h) Article 3.70-1(F)(5) of the Insurance Code applies to
9-23 health maintenance organizations other than those health
9-24 maintenance organizations offering only a single health care
9-25 service plan.
9-26 (i) [(h)] Article 3.72 of the Insurance Code applies to
9-27 health maintenance organizations to the extent that such article is
9-28 not in conflict with this Act and to the extent that the
9-29 residential treatment center or crisis stabilization unit is
9-30 located within the service area of the health maintenance
9-31 organization and subject to such inspection and review as required
9-32 by this Act or the rules hereunder.
9-33 (j) [(i)] A health maintenance organization shall comply
9-34 with Article 21.55 of the Insurance Code with respect to prompt
9-35 payment to enrollees [this code applies to out-of-area or emergency
9-36 claims for which benefits are not assigned or payment is not made
9-37 directly to the physician or provider]. A health maintenance
9-38 organization shall make payment to a physician or provider for
9-39 covered services rendered to enrollees of the health maintenance
9-40 organization not later than the 45th day after the date a claim for
9-41 payment is received with documentation reasonably necessary for the
9-42 health maintenance organization to process the claim or within the
9-43 time period specified by written agreement between the physician or
9-44 provider and the health maintenance organization. For purposes of
9-45 this subsection, "covered services" means health care services and
9-46 benefits to which enrollees are entitled under the terms of an
9-47 applicable evidence of coverage.
9-48 (k) [(j)] A health maintenance organization may provide
9-49 benefits under a health care plan to a dependent grandchild of an
9-50 enrollee when the dependent grandchild is less than 21 years old
9-51 and living with and in the household of the enrollee.
9-52 (l) A health maintenance organization that offers a basic
9-53 health care plan shall provide or arrange for the provision of
9-54 basic health care services to its enrollees as needed and without
9-55 limitations as to time and cost other than limitations prescribed
9-56 by rule of the commissioner.
9-57 (m) Nothing in this Act shall require a health maintenance
9-58 organization, physician, or provider to recommend, offer advice
9-59 concerning, pay for, provide, assist in, perform, arrange, or
9-60 participate in providing or performing any health care service that
9-61 violates its religious convictions. A health maintenance
9-62 organization that limits or denies health care services under this
9-63 subsection shall set forth such limitations in the evidence of
9-64 coverage as required by Section 9(a)(3) of this Act.
9-65 (n) The commissioner may adopt minimum standards relating to
9-66 basic health care services.
9-67 SECTION 6. Section 11, Texas Health Maintenance Organization
9-68 Act (Article 20A.11, Vernon's Texas Insurance Code), is amended to
9-69 read as follows:
10-1 Sec. 11. INFORMATION TO PROSPECTIVE AND CURRENT GROUP
10-2 CONTRACT HOLDERS AND ENROLLEES. (a) Each plan application form
10-3 shall prominently include a space in which the enrollee at the time
10-4 of application or enrollment shall make a selection of a primary
10-5 care physician or primary care provider. An enrollee shall at all
10-6 times have the right to select or change a primary care physician
10-7 or primary care provider within the health maintenance organization
10-8 network of available primary care physicians and primary care
10-9 providers. However, a health maintenance organization may limit
10-10 an enrollee's request to change physicians or providers to no more
10-11 than four changes in any 12-month period.
10-12 (b) A health maintenance organization shall provide on
10-13 request an accurate written description of health care plan terms
10-14 and conditions, as referenced in Section 4(a)(13) of this Act, to
10-15 allow any current or prospective group contract holder and current
10-16 or prospective enrollee eligible for enrollment in a health care
10-17 plan to make comparisons and informed decisions before selecting
10-18 among health care plans. The written description must be in a
10-19 readable and understandable format as prescribed by the
10-20 commissioner and shall include a current list of physicians and
10-21 providers. The health maintenance organization may provide its
10-22 handbook to satisfy this requirement provided the handbook's
10-23 content is substantially similar to and achieves the same level of
10-24 disclosure as the written description prescribed by the
10-25 commissioner and the current list of physicians and providers is
10-26 also provided.
10-27 (c) A health maintenance organization shall notify a group
10-28 contract holder within 30 days of any substantive changes to the
10-29 payment arrangements between the health maintenance organization
10-30 and health care physicians or providers.
10-31 (d) No health maintenance organization, or representative
10-32 thereof, may cause or knowingly permit the use or distribution of
10-33 prospective enrollee information which is untrue or misleading.
10-34 (e) Every health maintenance organization shall provide to
10-35 its enrollees reasonable notice of any material adverse change in
10-36 the operation of the organization that will affect them directly.
10-37 SECTION 7. Section 12, Texas Health Maintenance Organization
10-38 Act (Article 20A.12, Vernon's Texas Insurance Code), is amended to
10-39 read as follows:
10-40 Sec. 12. COMPLAINT AND APPEAL SYSTEM. (a) Every health
10-41 maintenance organization shall establish and maintain an internal
10-42 system for the resolution of complaints, including a process for
10-43 the notice and appeal of complaints. The commissioner may
10-44 promulgate such reasonable rules and regulations as are necessary
10-45 or proper to implement and administer this section [a complaint
10-46 system to provide reasonable procedures for the resolution of
10-47 written complaints initiated by enrollees concerning health care
10-48 services].
10-49 (b)(1) A system for the resolution of complaints shall be
10-50 implemented and maintained by a health maintenance organization as
10-51 provided under this subsection.
10-52 (2) If a complainant notifies the health maintenance
10-53 organization orally or in writing of a complaint, the health
10-54 maintenance organization shall, not later than the fifth business
10-55 day after the date after receipt of the complaint, send to the
10-56 complainant an acknowledgment letter and a one-page complaint form
10-57 in accordance with the following:
10-58 (A) the acknowledgment letter must include the
10-59 date of the health maintenance organization's receipt of the
10-60 complaint, a description of the complaint procedures and time
10-61 frames necessary for the resolution of the complaint, a statement
10-62 that the complaint form must be returned to the health maintenance
10-63 organization for prompt resolution of the complaint, and a request
10-64 for additional information needed, if applicable, for resolution of
10-65 the complaint; and
10-66 (B) the one-page complaint form must prominently
10-67 and clearly state that the complaint form must be returned to the
10-68 health maintenance organization for prompt resolution of the
10-69 complaint.
11-1 (3) The health maintenance organization shall
11-2 investigate each oral and written complaint received in accordance
11-3 with its own policies and in compliance with this Act.
11-4 (4) The total time for acknowledgment, investigation,
11-5 and resolution of the complaint by the health maintenance
11-6 organization shall not exceed 30 calendar days after the date the
11-7 health maintenance organization receives the one-page complaint
11-8 form from the complainant. The health maintenance organization may
11-9 extend the time for resolution of the complaint for up to an
11-10 additional 14 calendar days provided the health maintenance
11-11 organization demonstrates in writing to the complainant, within the
11-12 original 30 days, that the cause for delay is beyond the health
11-13 maintenance organization's control. The health maintenance
11-14 organization shall include a written progress report regarding the
11-15 status of the complaint. The complainant and the health
11-16 maintenance organization may agree to a further extension in
11-17 writing.
11-18 (5) Subdivisions (2) and (4) of this subsection do not
11-19 apply to complaints concerning emergencies or denials of continued
11-20 stays for hospitalization. Investigation and resolution of
11-21 complaints concerning emergencies or denials of continued stays for
11-22 hospitalization shall be concluded in accordance with the medical
11-23 or dental immediacy of the case and shall not exceed 72 hours from
11-24 receipt of the complaint.
11-25 (6) After the health maintenance organization has
11-26 investigated the complaint, the health maintenance organization
11-27 shall issue a response letter to the complainant explaining the
11-28 health maintenance organization's resolution of the complaint
11-29 within the time frames set forth in Subdivision (4) of this
11-30 subsection. The letter shall include a statement of the specific
11-31 medical and contractual reasons for the resolution and the
11-32 specialization of any physician or other provider consulted. If
11-33 the resolution is to deny services based on an adverse
11-34 determination of medical necessity, the clinical basis used to
11-35 reach that decision shall be enclosed. The response letter shall
11-36 contain a full description of the process for appeal, including the
11-37 time frames for the appeals process and the time frames for the
11-38 final decision on the appeal and shall prominently and clearly
11-39 explain the procedure for making a complaint to the department in a
11-40 manner prescribed by the commissioner.
11-41 (c)(1) In the event the complaint is not resolved to the
11-42 satisfaction of the complainant, the health maintenance
11-43 organization shall provide an appeals process which shall include
11-44 the right of the complainant either to appear in person before a
11-45 complaint appeal panel within the enrollee's county of residence or
11-46 the county where the enrollee normally receives health care
11-47 services, unless another site is agreed to by the complainant, or
11-48 to address a written appeal to the complaint appeal panel. The
11-49 health maintenance organization shall make a good faith effort to
11-50 meet the enrollee's needs in selecting the site and shall complete
11-51 the appeals process under this section within 30 calendar days
11-52 after the date of the receipt of the request for appeal.
11-53 (2) The health maintenance organization shall send to
11-54 the complainant within five working days after the date of receipt
11-55 of the request for appeal an acknowledgment letter which includes:
11-56 (A) the date of the health maintenance
11-57 organization's receipt of the oral or written request for appeal;
11-58 (B) the date and location of the hearing before
11-59 the complaint appeal panel;
11-60 (C) the right of the complainant to appear in
11-61 person, or through a representative if the enrollee is a minor or
11-62 disabled, before the complaint appeal panel; the complainant shall
11-63 be allowed to bring any person to the complaint appeal panel
11-64 meeting; however, the ability of those persons to directly question
11-65 the participants in the meeting may be limited by the health
11-66 maintenance organization's policy; the term "in person" means a
11-67 face-to-face meeting with all the members of the complaint appeal
11-68 panel unless otherwise agreed to by the complainant; and
11-69 (D) the right of the complainant to present
12-1 written or oral information and alternative expert testimony and to
12-2 question the persons responsible for making the prior determination
12-3 which resulted in the appeal.
12-4 (3) The health maintenance organization shall appoint
12-5 members to the complaint appeal panel which shall advise the health
12-6 maintenance organization on the resolution of the dispute. The
12-7 complaint appeal panel shall be composed of equal numbers of health
12-8 maintenance organization staff, physicians or other providers, and
12-9 enrollees. No member of the complaint appeal panel shall have been
12-10 previously involved in the disputed decision. The physicians or
12-11 other providers shall have experience in the area of care that is
12-12 in dispute and must be independent of any physician or provider who
12-13 made the prior determinations. If specialty care is in dispute,
12-14 the appeal panel must include an additional person who is a
12-15 specialist in the field of care to which the appeal relates. The
12-16 enrollees shall not be employees of the health maintenance
12-17 organization.
12-18 (4) Not less than five working days before the meeting
12-19 of the panel, unless the complainant agrees otherwise, the health
12-20 maintenance organization shall provide to the complainant or the
12-21 complainant's designated representative any documentation to be
12-22 presented to the panel by the health maintenance organization
12-23 staff, the specialization of any physicians or providers consulted
12-24 during the investigation, and the name and affiliation of all
12-25 health maintenance organization representatives on the panel. The
12-26 complainant or designated representative may respond to the
12-27 documentation provided either in person or in writing and the
12-28 complaint appeal panel must consider the response in its
12-29 deliberations if received prior to or during the hearing.
12-30 (5) The complainant or the designated representative,
12-31 as provided by Subdivision (2)(C) of this subsection, shall have
12-32 the right to appear in person before the complaint appeal panel, to
12-33 present alternative expert testimony, and to request the presence
12-34 of and question any person responsible for making the prior
12-35 determination which resulted in the appeal.
12-36 (6) Notice of the final decision of the health
12-37 maintenance organization on the appeal shall include a written
12-38 statement of the specific medical determination, clinical basis,
12-39 and contractual criteria used to reach the final decision. The
12-40 notice shall also prominently and clearly state the procedure for
12-41 making a complaint to the department in a manner prescribed by the
12-42 commissioner.
12-43 (7) Investigation and resolution of appeals relating
12-44 to poststabilization care following an emergency condition or
12-45 denials of continued stays for hospitalization shall be concluded
12-46 in accordance with the medical or dental immediacy of the case but
12-47 in no event to exceed 72 hours from the complainant's request for
12-48 appeal. At the request of the complainant or designated
12-49 representative, the health maintenance organization shall provide,
12-50 in lieu of a complaint appeal panel, a review by a physician or
12-51 provider who has not previously reviewed the case and is of the
12-52 same or similar specialty as typically manages the medical
12-53 condition, procedure, or treatment under discussion for review of
12-54 the appeal. The physician or provider reviewing the appeal may
12-55 interview the complainant or the complainant's designated
12-56 representative and shall render a final decision on the appeal.
12-57 Initial notice of the decision may be delivered orally if followed
12-58 by written notice of the determination within three days.
12-59 (d) The health maintenance organization shall maintain a
12-60 record of any complaint or appeal, any complaint or appeal
12-61 proceeding, and any actions taken on a complaint or appeal for a
12-62 period of three years from the date of the receipt of the complaint
12-63 or appeal.
12-64 (e) The commissioner [or board] may examine the [such]
12-65 complaint system and documentation maintained under Subsection (d)
12-66 of this section for compliance with this Act and may require the
12-67 health maintenance organization to make corrections deemed
12-68 necessary by the commissioner.
12-69 (f) If any provision of Article 21.58A, Insurance Code,
13-1 conflicts with any provision of this section, the provisions of
13-2 this section shall prevail.
13-3 SECTION 8. The Texas Health Maintenance Organization Act
13-4 (Article 20A.01 et seq., Vernon's Texas Insurance Code), is amended
13-5 by adding Section 12A to read as follows:
13-6 Sec. 12A. FILING COMPLAINTS WITH THE TEXAS DEPARTMENT OF
13-7 INSURANCE. (a) Any person, including persons who have attempted
13-8 to resolve complaints through the health maintenance organization's
13-9 complaint system process who are dissatisfied with the resolution,
13-10 may report an alleged violation of this Act to the Texas Department
13-11 of Insurance.
13-12 (b) The commissioner shall investigate a complaint against a
13-13 health maintenance organization to determine compliance with this
13-14 Act within 60 days after the Texas Department of Insurance's
13-15 receipt of the complaint and all information necessary for the
13-16 department to determine compliance. The commissioner may extend
13-17 the time necessary to complete an investigation in the event any of
13-18 the following circumstances occur:
13-19 (1) additional information is needed;
13-20 (2) an on-site review is necessary;
13-21 (3) the health maintenance organization, the physician
13-22 or provider, or the complainant does not provide all documentation
13-23 necessary to complete the investigation; or
13-24 (4) other circumstances beyond the control of the
13-25 department occur.
13-26 SECTION 9. Subsections (a), (b), (c), (f), (g), and (h),
13-27 Section 13, Texas Health Maintenance Organization Act (Article
13-28 20A.13, Vernon's Texas Insurance Code), are amended to read as
13-29 follows:
13-30 (a) Unless otherwise provided by this section, each health
13-31 maintenance organization shall deposit with the comptroller [State
13-32 Treasurer] cash or securities, or any combination of these or other
13-33 guarantees that are acceptable to the commissioner [State Board of
13-34 Insurance], in an amount as set forth in this section.
13-35 (b) For a health maintenance organization which has not
13-36 received a certificate of authority from the State Board of
13-37 Insurance or the commissioner prior to September 1, 1987:
13-38 (1) the amount of the initial deposit or other
13-39 guarantee shall be $100,000 for an organization offering basic
13-40 health care services and $50,000 for an organization offering a
13-41 single health care service plan;
13-42 (2) on or before March 15 of the year following the
13-43 year in which the health maintenance organization receives a
13-44 certificate of authority, it shall deposit with the comptroller
13-45 [State Treasurer] an amount equal to the difference between the
13-46 initial deposit and 100 percent of its estimated uncovered health
13-47 care expenses for the first 12 months of operation;
13-48 (3) on or before March 15 of each subsequent year, it
13-49 shall deposit the difference between its total uncovered health
13-50 care expenses based on its annual statement from the previous year
13-51 and the total amount previously deposited and not withdrawn from
13-52 the State Treasury; and
13-53 (4) in any year in which the amount determined in
13-54 accordance with Subdivision (3) of this subsection is zero or less
13-55 than zero, the commissioner [State Board of Insurance] may not
13-56 require the health maintenance organization to make any additional
13-57 deposit under this subsection.
13-58 (c) For a health maintenance organization which has received
13-59 a certificate of authority from the State Board of Insurance prior
13-60 to September 1, 1987:
13-61 (1) on or before March 15, 1988, the organization
13-62 shall deposit an amount equal to the sum of:
13-63 (A) $100,000 for an organization offering basic
13-64 health care services or $50,000 for an organization offering a
13-65 single health care service plan; and
13-66 (B) 100 percent of the uncovered health care
13-67 expenses for the preceding 12 months of operation;
13-68 (2) on or before March 15 of each subsequent year, the
13-69 organization shall make additional deposits of the difference
14-1 between its total uncovered health care expenses based on its
14-2 annual statement from the previous year and the total amount
14-3 previously deposited and not withdrawn from the State Treasury; and
14-4 (3) in any year in which the amount determined in
14-5 accordance with Subdivision (2) of this subsection is zero or less
14-6 than zero, the commissioner [State Board of Insurance] may not
14-7 require the health maintenance organization to make any additional
14-8 deposit under this subsection.
14-9 (f) Upon application by a health maintenance organization
14-10 operating for more than one year under a certificate of authority
14-11 issued by the State Board of Insurance or the commissioner, the
14-12 commissioner [State Board of Insurance] may waive some or all of
14-13 the requirements of Subsection (b) or (c) of this section for any
14-14 period of time it shall deem proper whenever it finds that one or
14-15 more of the following conditions justifies such waiver:
14-16 (1) the total amount of the deposit or other guarantee
14-17 is equal to 25 percent of the health maintenance organization's
14-18 estimated uncovered expenses for the next calendar year;
14-19 (2) the health maintenance organization's net worth is
14-20 equal to at least 25 percent of its estimated uncovered expenses
14-21 for the next calendar year; or
14-22 (3) either the health maintenance organization has a
14-23 net worth of $5,000,000 or its sponsoring organization has a net
14-24 worth of at least $5,000,000 for each health maintenance
14-25 organization whose uncovered expenses it guarantees.
14-26 (g) If one or more of the requirements is waived, any amount
14-27 previously deposited shall remain on deposit until released in
14-28 whole or in part by the comptroller [State Treasurer] upon order of
14-29 the commissioner [State Board of Insurance] pursuant to Subsection
14-30 (f) of this section.
14-31 (h) A health maintenance organization that has made a
14-32 deposit with the comptroller [State Treasurer] may, at its option,
14-33 withdraw the deposit or any part thereof, first having deposited
14-34 with the comptroller [State Treasurer], in lieu thereof, a deposit
14-35 of cash or securities of equal amount and value to that withdrawn.
14-36 Any securities shall be approved by the commissioner [State Board
14-37 of Insurance] before being substituted.
14-38 SECTION 10. Section 14, Texas Health Maintenance
14-39 Organization Act (Article 20A.14, Vernon's Texas Insurance Code),
14-40 is amended by adding Subsections (i) through (l) to read as
14-41 follows:
14-42 (i)(1) A health maintenance organization shall not, as a
14-43 condition of a contract with a physician or provider or in any
14-44 other manner, prohibit, attempt to prohibit, or discourage a
14-45 physician or provider from:
14-46 (A) discussing with or communicating to a
14-47 current, prospective, or former patient, or a party designated by a
14-48 patient, information or opinions regarding the patient's health
14-49 care, including but not limited to the patient's medical condition
14-50 or treatment options; or
14-51 (B) discussing with or communicating in good
14-52 faith to a current, prospective, or former patient, or a party
14-53 designated by a patient, information or opinions regarding the
14-54 provisions, terms, requirements, or services of the health care
14-55 plan as they relate to the medical needs of the patient.
14-56 (2) A health maintenance organization shall not in any
14-57 way penalize, terminate, or refuse to compensate, for covered
14-58 services, a physician or provider for discussing or communicating
14-59 with a current, prospective, or former patient, or a party
14-60 designated by a patient, pursuant to this section.
14-61 (j) A health maintenance organization shall not engage in
14-62 any retaliatory action, including refusal to renew or cancellation
14-63 of coverage, against a group contract holder or enrollee because
14-64 the group, enrollee, or person acting on behalf of the group or
14-65 enrollee has filed a complaint against the health maintenance
14-66 organization or appealed a decision of the health maintenance
14-67 organization.
14-68 (k) A health maintenance organization shall not engage in
14-69 any retaliatory action, including termination of or refusal to
15-1 renew a contract, against a physician or provider because the
15-2 physician or provider has, on behalf of an enrollee, reasonably
15-3 filed a complaint against the health maintenance organization or
15-4 has appealed a decision of the health maintenance organization.
15-5 (l) A health maintenance organization may not use any
15-6 financial incentive or make any payment to a physician or provider
15-7 which acts directly or indirectly as an inducement to limit
15-8 medically necessary services.
15-9 SECTION 11. Section 15, Texas Health Maintenance
15-10 Organization Act (Article 20A.15, Vernon's Texas Insurance Code),
15-11 is amended to read as follows:
15-12 Sec. 15. REGULATION OF AGENTS [AGENT FOR SINGLE HEALTH CARE
15-13 SERVICE PLANS]. (a) A health maintenance organization agent is
15-14 anyone who represents any health maintenance organization in the
15-15 solicitation, negotiation, procurement, or effectuation of health
15-16 maintenance organization membership or holds himself or herself out
15-17 as such. No person or other legal entity may perform the acts of a
15-18 health maintenance organization agent within this state unless such
15-19 person or legal entity has a valid health maintenance organization
15-20 agent's license issued pursuant to this Act. The term "health
15-21 maintenance organization agent" shall not include:
15-22 (1) any regular salaried officer or employee of a
15-23 health maintenance organization or of a licensed health maintenance
15-24 organization agent, who devotes substantially all of his or her
15-25 time to activities other than the solicitation of applications for
15-26 health maintenance organization membership and receives no
15-27 commission or other compensation directly dependent upon the
15-28 business obtained and who does not solicit or accept from the
15-29 public applications for health maintenance organization membership;
15-30 (2) employers or their officers or employees or the
15-31 trustees of any employee benefit plan to the extent that such
15-32 employers, officers, employees, or trustees are engaged in the
15-33 administration or operation of any program of employee benefits
15-34 involving the use of membership in a health maintenance
15-35 organization; provided that such employers, officers, employees, or
15-36 trustees are not in any manner compensated directly or indirectly
15-37 by the health maintenance organization issuing such health
15-38 maintenance organization membership;
15-39 (3) banks or their officers and employees to the
15-40 extent that such banks, officers, and employees collect and remit
15-41 charges by charging same against accounts of depositors on the
15-42 orders of such depositors; or
15-43 (4) any person or the employee of any person who has
15-44 contracted to provide administrative, management, or health care
15-45 services to a health maintenance organization and who is
15-46 compensated for those services by the payment of an amount
15-47 calculated as a percentage of the revenues, net income, or profit
15-48 of the health maintenance organization, if that method of
15-49 compensation is the sole basis for subjecting that person or the
15-50 employee of the person to this section.
15-51 (b) The commissioner [Commissioner of Insurance] shall
15-52 collect in advance from health maintenance organization agent
15-53 applicants a nonrefundable license fee in an amount not to exceed
15-54 $50 as determined by the commissioner [board]. Unless the
15-55 commissioner [State Board of Insurance] accepts a qualifying
15-56 examination administered by a testing service, as provided under
15-57 Article 21.01-1, Insurance Code, as amended, the commissioner
15-58 [Commissioner of Insurance] shall also collect from such applicants
15-59 an examination fee in an amount not to exceed $20 as determined by
15-60 the commissioner [board]. A new examination fee shall be paid for
15-61 each examination. The examination fee shall not be returned under
15-62 any circumstances other than for failure to appear and take the
15-63 examination after the applicant has given at least 24 hours notice
15-64 of an emergency situation to the commissioner [Commissioner of
15-65 Insurance] and received the commissioner's approval.
15-66 (c) Except as may be provided by a staggered renewal system
15-67 adopted under Article 21.01-2, Insurance Code, and its subsequent
15-68 amendments, each license issued to a health maintenance
15-69 organization agent shall expire two years following the date of
16-1 issue, unless prior thereto it is suspended or revoked by the
16-2 commissioner or the authority of the agent to act for the health
16-3 maintenance organization is terminated.
16-4 (d) Licenses which have not expired or been suspended or
16-5 revoked may be renewed by filing with the commissioner [State Board
16-6 of Insurance] a completed renewal application and by paying a
16-7 nonrefundable renewal fee in an amount not to exceed $50 as
16-8 determined by the commissioner [board] on or before the expiration
16-9 of the license.
16-10 (e) Any agent licensed under this section may represent and
16-11 act as an agent for more than one health maintenance organization
16-12 at any time while the agent's license is in force. Any such agent
16-13 and the health maintenance organization involved must give notice
16-14 to the commissioner [State Board of Insurance] of any additional
16-15 appointment or appointments authorizing the agent to act as agent
16-16 for an additional health maintenance organization or health
16-17 maintenance organizations. Such notice must be accompanied by a
16-18 certificate from each health maintenance organization to be named
16-19 in each additional appointment that said health maintenance
16-20 organization desires to appoint the applicant as its agent. This
16-21 notice shall contain such other information as the commissioner
16-22 [State Board of Insurance] may require. The agent shall be
16-23 required to pay a nonrefundable fee in an amount not to exceed $16
16-24 as determined by the commissioner [board] for each additional
16-25 appointment applied for, which fee shall accompany the notice. If
16-26 approval of the additional appointment is not received from the
16-27 commissioner [State Board of Insurance] before the eighth day after
16-28 the date on which the completed notice and fee were received by the
16-29 commissioner [board], the agent and the health maintenance
16-30 organization, in the absence of notice of disapproval, may assume
16-31 that the board approves the application, and the agent may act for
16-32 the health maintenance organization. The commissioner [State Board
16-33 of Insurance] shall suspend the license of an agent during any
16-34 period in which the agent does not have an outstanding valid
16-35 appointment to represent a health maintenance organization. The
16-36 suspension shall be lifted on receipt by the commissioner [board]
16-37 of acceptable notice of valid appointment.
16-38 (f) It shall be the duty of the commissioner to collect from
16-39 every agent of any health maintenance organization in the State of
16-40 Texas under the provisions of this section a licensing fee and an
16-41 initial appointment fee for each appointment by a health
16-42 maintenance organization. All fees collected under this section
16-43 shall be used by the commissioner [State Board of Insurance] to
16-44 administer the provisions of this [the Texas Health Maintenance
16-45 Organization] Act and all laws of this state governing and
16-46 regulating agents for such health maintenance organizations. All
16-47 of such funds shall be paid into the State Treasury to the credit
16-48 of the Texas Department [State Board] of Insurance operating fund
16-49 and shall be paid out for salaries, traveling expenses, office
16-50 expenses, and other incidental expenses incurred and approved by
16-51 the commissioner [State Board of Insurance].
16-52 (g) The commissioner [State Board of Insurance] may, after
16-53 notice and hearings, promulgate such reasonable rules and
16-54 regulations as are necessary to provide for the licensing of
16-55 agents.
16-56 (h) [(m) Duplicate License; Fee.] The commissioner
16-57 [Commissioner of Insurance] shall collect in advance from agents
16-58 requesting duplicate licenses a fee not to exceed $20. The
16-59 commissioner [State Board of Insurance] shall determine the amount
16-60 of the fee.
16-61 (i) [(n)] The commissioner [State Board of Insurance] shall
16-62 issue a license to a corporation if it finds that:
16-63 (1) the corporation is organized or existing under the
16-64 Texas Business Corporation Act, has its principal place of business
16-65 in this state, and has as one of its purposes the authority to act
16-66 as an agent under this section; and
16-67 (2) each officer, director, and shareholder of the
16-68 corporation is individually licensed under this section.
16-69 (j) [(o)] This section may not be construed to permit any
17-1 employee, agent, or corporation to perform any act of an agent
17-2 under this section without obtaining a license.
17-3 (k) [(p)] If, at any time, a corporation that holds an
17-4 agent's license does not maintain the qualifications necessary to
17-5 obtain a license, the commissioner [State Board of Insurance] shall
17-6 cancel or revoke the license of that corporation to act as an
17-7 agent. If a person who is not a licensed agent under this section
17-8 acquires shares in such a corporation by devise or descent, that
17-9 person must either obtain a license or dispose of the shares to a
17-10 person licensed under this section not later than the 90th day
17-11 after the date on which the person acquires the shares.
17-12 (l) [(q)] If an unlicensed person acquires shares in a
17-13 corporation and does not dispose of the shares within the 90-day
17-14 period, the shares must be purchased by the corporation for the
17-15 value of the shares as reflected by the regular books and records
17-16 of the corporation as of the date of the acquisition of the shares
17-17 by the unlicensed person. If the corporation fails or refuses to
17-18 purchase the shares, the commissioner [State Board of Insurance]
17-19 shall cancel its license.
17-20 (m) [(r)] A corporation may redeem the shares of any
17-21 shareholder or the shares of a deceased shareholder on terms agreed
17-22 to by the board of directors and the shareholder or the
17-23 shareholder's personal representative or at a price and on terms
17-24 provided in the articles of incorporation, the bylaws of the
17-25 corporation, or an existing contract entered into by the
17-26 shareholders of the corporation.
17-27 (n) [(s)] With the application for a license or a license
17-28 renewal, each corporation licensed as an agent under this section
17-29 must file a sworn statement listing the names and addresses of all
17-30 of its officers, directors, and shareholders.
17-31 (o) [(t)] Each corporation shall notify the commissioner
17-32 [State Board of Insurance] of any change in its officers,
17-33 directors, or shareholders not later than the 30th day after the
17-34 date on which the change takes effect.
17-35 (p) [(u)] Another corporation may not own an interest in a
17-36 corporation licensed under this section. Each owner of an interest
17-37 in a corporation licensed under this section must be a natural
17-38 person who holds a valid license issued under this section.
17-39 SECTION 12. Section 15A, Texas Health Maintenance
17-40 Organization Act (Article 20A.15A, Vernon's Texas Insurance Code),
17-41 is amended to read as follows:
17-42 Sec. 15A. AGENTS FOR SINGLE HEALTH CARE SERVICE PLANS.
17-43 (a) A person acting as an agent for a health maintenance
17-44 organization offering only a single health care service plan who is
17-45 licensed by examination under Article 21.07, Insurance Code, or
17-46 Chapter 213, Acts of the 54th Legislature, Regular Session, 1955
17-47 (Article 21.07-1, Vernon's Texas Insurance Code), is subject to the
17-48 licensing requirements provided by this section, and except as
17-49 specifically provided by this Act or some other law, no other agent
17-50 licensing requirements apply.
17-51 (b) The commissioner shall collect in advance from
17-52 applicants for licensure as health maintenance organization agents
17-53 under this section a nonrefundable license fee in an amount not to
17-54 exceed $70 as determined by the commissioner [State Board of
17-55 Insurance].
17-56 (c) Except as may be provided by a staggered renewal system
17-57 adopted under Article 21.01-2, Insurance Code, and its subsequent
17-58 amendments, each license issued to a health maintenance
17-59 organization agent under this section shall expire two years
17-60 following the date of issuance, unless before that time the license
17-61 is suspended or revoked by the commissioner or the authority of the
17-62 agent to act for the health maintenance organization is terminated.
17-63 (d) Licenses issued under this section that have not expired
17-64 or been suspended or revoked may be renewed by filing a completed
17-65 application and paying to the commissioner [board] the required
17-66 nonrefundable renewal fee in an amount not to exceed $50 as
17-67 determined by the commissioner [board].
17-68 (e) An agent licensed under this section may represent and
17-69 act as an agent for more than one health maintenance organization
18-1 offering only a single health care service plan at any time while
18-2 that agent's license is in force. The agent and the health
18-3 maintenance organization offering only a single health care service
18-4 plan involved must give notice to the commissioner [State Board of
18-5 Insurance] of any additional appointment authorizing the agent to
18-6 act as agent for an additional health maintenance organization
18-7 offering only a single health care service plan. The notice must
18-8 be accompanied by a certificate from each health maintenance
18-9 organization to be named in each additional appointment stating
18-10 that the health maintenance organization offers only a single
18-11 health care service plan and desires to appoint the applicant as
18-12 its agent. The notice must include other information required by
18-13 the commissioner [State Board of Insurance]. The agent shall pay a
18-14 nonrefundable fee in an amount not to exceed $70 as determined by
18-15 the commissioner [State Board of Insurance] for each additional
18-16 appointment applied for. The fee must accompany the notice. If
18-17 approval of the additional appointment is not received from the
18-18 commissioner [State Board of Insurance] before the eighth day after
18-19 the date on which the completed notice and fee were received by the
18-20 commissioner [board], the agent and the health maintenance
18-21 organization, in the absence of notice of disapproval, may assume
18-22 that the commissioner [board] approves the application, and the
18-23 agent may act for the health maintenance organization offering a
18-24 single health care service plan. The commissioner [State Board of
18-25 Insurance] shall suspend the license of an agent during any period
18-26 in which the agent does not have an outstanding valid appointment
18-27 to represent a health maintenance organization offering a single
18-28 health care service plan. The suspension shall be lifted on
18-29 receipt by the commissioner [board] of acceptable notice of valid
18-30 appointment.
18-31 (f) The commissioner shall collect from each agent for any
18-32 health maintenance organization offering only a single health care
18-33 service plan a license fee and an appointment fee for each
18-34 additional appointment.
18-35 (g) Fees collected under this section shall be used by the
18-36 commissioner [State Board of Insurance] to administer this Act and
18-37 laws governing and regulating agents for health maintenance
18-38 organizations. The funds shall be deposited in the state treasury
18-39 to the credit of the Texas Department [State Board] of Insurance
18-40 operating fund and shall be paid out for salaries, traveling
18-41 expenses, office expenses, and other incidental expenses incurred
18-42 and approved by the commissioner [State Board of Insurance].
18-43 (h) The commissioner [State Board of Insurance] may, after
18-44 notice and hearing, adopt reasonable rules that are necessary to
18-45 provide for the licensing of agents under this section.
18-46 (i) A licensee may renew an unexpired license issued under
18-47 this section by filing the required renewal application and paying
18-48 a nonrefundable fee with the commissioner [State Board of
18-49 Insurance] on or before the expiration date of the license.
18-50 (j) [(l)] A health maintenance organization offering only a
18-51 single health care service plan that desires to appoint an agent
18-52 under this section shall provide to its prospective agents a
18-53 written manual, a copy of which shall be filed with the
18-54 commissioner [State Board of Insurance], outlining and describing
18-55 the single health care service offered by the health maintenance
18-56 organization, outlining this Act, and the rules of the [State Board
18-57 of Insurance and] commissioner adopted under this Act. The health
18-58 maintenance organization shall certify to the commissioner [State
18-59 Board of Insurance] that it has provided the written manual
18-60 required by this subsection to its prospective agents and has
18-61 provided, under the supervision of a licensed health maintenance
18-62 organization agent, a minimum of four hours of training in its
18-63 single health care service, this Act, and the rules of the [State
18-64 Board of Insurance and the] commissioner adopted under this Act.
18-65 (k) [(n)] Any regular salaried officer or employee of a
18-66 health maintenance organization offering only a single health care
18-67 service plan who solicits applications on behalf of that health
18-68 maintenance organization must be licensed as a health maintenance
18-69 organization agent under this section and must take any examination
19-1 and pay any fee provided by Subsection [Subsections] (b) [and (j)]
19-2 of Section 15 of this Act.
19-3 (l) [(o)] The commissioner shall collect in advance from
19-4 agents requesting duplicate licenses a fee not to exceed $20. The
19-5 commissioner [State Board of Insurance] shall determine the amount
19-6 of the fee.
19-7 SECTION 13. Section 17, Texas Health Maintenance
19-8 Organization Act (Article 20A.17, Vernon's Texas Insurance Code),
19-9 is amended to read as follows:
19-10 Sec. 17. EXAMINATIONS. (a) The commissioner may make an
19-11 examination concerning the quality of health care services and of
19-12 the affairs of any applicant for a certificate of authority or any
19-13 health maintenance organization as often as the commissioner deems
19-14 [it is deemed] necessary, but not less frequently than once every
19-15 three years.
19-16 (b) [The board may make an examination concerning the
19-17 quality of health care services of any health maintenance
19-18 organization as often as it deems it necessary, but not less
19-19 frequently than once every three years.]
19-20 [(c)] (1) Every health maintenance organization shall make
19-21 its books and records relating to its operation available for such
19-22 examinations and in every way facilitate the examinations. Every
19-23 physician and provider with whom a health maintenance organization
19-24 has a contract, agreement, or other arrangement need only make
19-25 available for examination that portion of its books and records
19-26 relevant to its relationship with the health maintenance
19-27 organization.
19-28 (2) A copy of any contract, agreement, or other
19-29 arrangement between a health maintenance organization and a
19-30 physician or provider shall be provided to the commissioner by the
19-31 health maintenance organization on the request of the commissioner.
19-32 Such documentation provided to the commissioner under this
19-33 subsection shall be deemed confidential and not subject to the open
19-34 records law, Chapter 552, Government Code.
19-35 (3) Medical, hospital, and health records of enrollees
19-36 and records of physicians and providers providing service under
19-37 independent contract with a health maintenance organization shall
19-38 only be subject to such examination as is necessary for an ongoing
19-39 quality of health assurance program concerning health care
19-40 procedures and outcome in accordance with an approved plan as
19-41 provided for in this Act. Said plan shall provide for adequate
19-42 protection of confidentiality of medical information and shall only
19-43 be disclosed in accordance with applicable law and this Act and
19-44 shall only be subject to subpoena upon a showing of good cause.
19-45 (4) [(3)] For the purpose of examinations, the
19-46 commissioner [and board] may administer oaths to and examine the
19-47 officers and agents of the health maintenance organization and the
19-48 principals of such physicians and providers concerning their
19-49 business.
19-50 (c) [(d)] Articles 1.04A, 1.15, 1.16, and 1.19, as amended,
19-51 of the Insurance Code shall be construed to apply to health
19-52 maintenance organizations, except to the extent that the
19-53 commissioner determines that the nature of the examination of a
19-54 health maintenance organization renders such clearly inappropriate.
19-55 (d) [(e)] Articles 1.12, 1.24, and 1.30, and Section 7 of
19-56 Article 1.10, Insurance Code, apply to health maintenance
19-57 organizations.
19-58 SECTION 14. Subsections (d) and (f), Section 18, Texas
19-59 Health Maintenance Organization Act (Article 20A.18, Vernon's Texas
19-60 Insurance Code), are amended to read as follows:
19-61 (d) Except as otherwise provided by this subsection, the
19-62 bond required under Subsection (c) of this section must be issued
19-63 by an insurance company that holds a certificate of authority in
19-64 this state. If, after notice and hearing, the commissioner [State
19-65 Board of Insurance] determines that the fidelity bond required by
19-66 this section is not available from an insurance company that holds
19-67 a certificate of authority in this state, a fidelity bond procured
19-68 by a licensed Texas surplus lines agent resident in this state in
19-69 compliance with Article 1.14-2, Insurance Code, satisfies the
20-1 requirements of this section.
20-2 (f) Instead of a bond, the management contractor may deposit
20-3 with the comptroller [State Treasurer] cash or securities
20-4 acceptable to the commissioner [State Board of Insurance]. Such a
20-5 deposit must be maintained in the amount and subject to the same
20-6 conditions as required for a bond under this section.
20-7 SECTION 15. The Texas Health Maintenance Organization Act
20-8 (Article 20A.01 et seq., Vernon's Texas Insurance Code), is amended
20-9 by adding Section 18A to read as follows:
20-10 Sec. 18A. PHYSICIAN AND PROVIDER CONTRACTS. (a) A health
20-11 maintenance organization shall, on request, make available and
20-12 disclose to physicians and providers written application procedures
20-13 and qualification requirements for contracting with the health
20-14 maintenance organization. Each physician and provider who
20-15 initially applies to contract with a health maintenance
20-16 organization for the provision of health care services on behalf
20-17 of the health maintenance organization and who is denied a
20-18 contract with the health maintenance organization must be provided
20-19 written notice of the reasons the initial application was denied.
20-20 Unless otherwise limited by Article 21.52B, Insurance Code, this
20-21 subsection does not prohibit a health maintenance organization plan
20-22 from rejecting an application from a physician or provider based on
20-23 the determination that the plan has sufficient qualified physicians
20-24 or providers.
20-25 (b) Before terminating a contract with a physician or
20-26 provider, the health maintenance organization shall provide a
20-27 written explanation to the physician or provider of the reasons for
20-28 termination. On request and before the effective date of the
20-29 termination, a physician or provider shall be entitled to a review
20-30 of the health maintenance organization's proposed termination by an
20-31 advisory review panel, except in cases in which there is imminent
20-32 harm to patient health or an action by a state medical or dental or
20-33 other medical or dental licensing board, or other licensing board
20-34 or other government agency, that effectively impairs the
20-35 physician's or provider's ability to practice medicine, dentistry,
20-36 or other profession, or in cases of fraud or malfeasance. The
20-37 advisory review panel shall be composed of physicians and
20-38 providers, including at least one representative in the physician's
20-39 or provider's specialty or a similar specialty, if available,
20-40 appointed to serve on the standing quality assurance committee or
20-41 utilization review committee of the health maintenance
20-42 organization. The decision of the advisory review panel must be
20-43 considered but is not binding on the health maintenance
20-44 organization. The health maintenance organization shall provide to
20-45 the affected physician or provider, on request, a copy of the
20-46 recommendation of the advisory review panel and the health
20-47 maintenance organization's determination.
20-48 (c) Each contract between a health maintenance organization
20-49 and a physician or provider of health care services must provide
20-50 that reasonable advance notice be given to an enrollee of the
20-51 impending termination from the plan of a physician or provider who
20-52 is currently treating the enrollee. Each contract must also
20-53 provide that the termination of the physician or provider contract,
20-54 except for reason of medical competence or professional behavior,
20-55 does not release the health maintenance organization from the
20-56 obligation to reimburse the physician or provider who is treating
20-57 an enrollee of special circumstance, such as a person who has a
20-58 disability, acute condition, or life-threatening illness or is past
20-59 the twenty-fourth week of pregnancy, at no less than the contract
20-60 rate for that enrollee's care in exchange for continuity of ongoing
20-61 treatment of an enrollee then receiving medically necessary
20-62 treatment in accordance with the dictates of medical prudence. For
20-63 purposes of this subsection, "special circumstance" means a
20-64 condition such that the treating physician or provider reasonably
20-65 believes that discontinuing care by the treating physician or
20-66 provider could cause harm to the patient. The special circumstance
20-67 shall be identified by the treating physician or provider, who must
20-68 request that the enrollee be permitted to continue treatment under
20-69 the physician's or provider's care and agree not to seek payment
21-1 from the patient of any amounts for which the enrollee would not be
21-2 responsible if the physician or provider were still on the health
21-3 maintenance organization network. Contracts between a health
21-4 maintenance organization and physicians or providers shall provide
21-5 procedures for resolving disputes regarding the necessity for
21-6 continued treatment by a physician or provider. This section does
21-7 not extend the obligation of the health maintenance organization to
21-8 reimburse the terminated physician or provider for ongoing
21-9 treatment of an enrollee beyond the 90th day after the effective
21-10 date of the termination. However, the obligation of the health
21-11 maintenance organization to reimburse the terminated physician or
21-12 provider or, if applicable, the enrollee for services to an
21-13 enrollee who at the time of the termination is past the 24th week
21-14 of pregnancy, extends through delivery of the child, immediate
21-15 postpartum care, and the follow-up checkup within the first six
21-16 weeks of delivery.
21-17 (d) A physician or provider who is terminated or deselected
21-18 shall be entitled to an expedited review process by the health
21-19 maintenance organization on request by the physician or provider.
21-20 If the physician or provider is deselected for reasons other than
21-21 at the physician's or provider's request, the health maintenance
21-22 organization may not notify patients of the physician's or
21-23 provider's deselection until the effective date of the termination
21-24 or the time a review panel makes a formal recommendation. If a
21-25 physician or provider is deselected for reasons related to imminent
21-26 harm, the health maintenance organization may notify patients
21-27 immediately.
21-28 (e) The following applies to any health maintenance
21-29 organization that to any extent uses capitation as a method of
21-30 compensation:
21-31 (1) The health maintenance organization shall begin
21-32 payment of capitated amounts to the enrollee's primary care
21-33 physician or primary care provider, calculated from the date of
21-34 enrollment, no later than the 90th day following the date an
21-35 enrollee has selected or has been assigned a primary care physician
21-36 or primary care provider. If selection or assignment does not
21-37 occur at the time of enrollment, capitation which would otherwise
21-38 have been paid to a selected primary care physician or primary care
21-39 provider had a selection been made shall be reserved as a
21-40 capitation payable until such time as an enrollee makes a selection
21-41 or the plan assigns a primary care physician or primary care
21-42 provider.
21-43 (2) If an enrollee does not select a primary care
21-44 physician or primary care provider at the time of application or
21-45 enrollment, a health maintenance organization may assign an
21-46 enrollee to a primary care physician or primary care provider. If
21-47 a health maintenance organization elects to assign an enrollee to a
21-48 primary care physician or primary care provider, the assignment
21-49 shall be made to a primary care physician or primary care provider
21-50 located within the zip code nearest the enrollee's residence or
21-51 place of employment and, to the extent practicable given the zip
21-52 code limitation, shall be done in a manner that results in a fair
21-53 and equal distribution of enrollees among the plan's primary care
21-54 physicians or primary care providers. An enrollee shall have the
21-55 right at any time to reject the physician or provider assigned and
21-56 to select another physician or provider from the list of primary
21-57 care physicians or primary care providers for the health
21-58 maintenance organization network. An election by an enrollee to
21-59 reject an assigned physician or provider shall not be counted as a
21-60 change in providers for purposes of the limitation described in
21-61 Section 11(a) of this Act.
21-62 (3) A health maintenance organization shall notify a
21-63 physician or provider of the selection of the physician or provider
21-64 as a primary care physician or primary care provider by an enrollee
21-65 within 30 working days of the selection or assignment of an
21-66 enrollee to that physician or provider by the health maintenance
21-67 organization.
21-68 (4) As an alternative to the provisions of
21-69 Subdivisions (1), (2), and (3) of this subsection, a health
22-1 maintenance organization may seek approval from the Texas
22-2 Department of Insurance of a different capitation payment scheme
22-3 that assures:
22-4 (A) immediate availability and accessibility of
22-5 a primary care physician or primary care provider; and
22-6 (B) payment to the primary care physician or
22-7 primary care provider of a capitation amount certified by a
22-8 qualified actuary to be actuarially sufficient to compensate the
22-9 primary care physician or primary care provider for the risk being
22-10 assumed.
22-11 (f) A contract between a health maintenance organization and
22-12 a physician or provider may not contain any clause purporting to
22-13 indemnify the health maintenance organization for any tort
22-14 liability resulting from acts or omissions of the health
22-15 maintenance organization.
22-16 (g) All contracts or other agreements between a health
22-17 maintenance organization and a physician or provider shall specify
22-18 that the physician or provider will hold an enrollee harmless for
22-19 payment of the cost of covered health care services in the event
22-20 the health maintenance organization fails to pay the provider for
22-21 health care services.
22-22 (h) A health maintenance organization that conducts or uses
22-23 economic profiling of physicians or providers within the health
22-24 maintenance organization shall make available to a network
22-25 physician or provider on request the economic profile of that
22-26 physician or provider, including the standards by which the
22-27 physician or provider is measured. The use of an economic profile
22-28 must recognize the characteristics of a physician's or provider's
22-29 practice that may account for variations from expected costs.
22-30 (i) A contract between a health maintenance organization and
22-31 a physician or a provider must require the physician or provider to
22-32 post, in the office of the physician or provider, a notice to
22-33 enrollees on the process for resolving complaints with the health
22-34 maintenance organization. The notice must include the Texas
22-35 Department of Insurance's toll-free telephone number for filing
22-36 complaints.
22-37 SECTION 16. Section 19, Texas Health Maintenance
22-38 Organization Act (Article 20A.19, Vernon's Texas Insurance Code),
22-39 is amended to read as follows:
22-40 Sec. 19. HAZARDOUS FINANCIAL CONDITION. (a) Whenever the
22-41 financial condition of any health maintenance organization
22-42 indicates a condition such that the continued operation of the
22-43 health maintenance organization might be hazardous to its
22-44 enrollees, creditors, or the general public, then the commissioner
22-45 [of insurance] may, after notice and opportunity for hearing, order
22-46 the health maintenance organization to take such action as may be
22-47 reasonably necessary to rectify the existing condition, including
22-48 but not necessarily limited to one or more of the following steps:
22-49 (1) to reduce the total amount of present and
22-50 potential liability for benefits by reinsurance;
22-51 (2) to reduce the volume of new business being
22-52 accepted;
22-53 (3) to reduce expenses by specified methods;
22-54 (4) to suspend or limit the writing of new business
22-55 for a period of time;
22-56 (5) to increase the health maintenance organization's
22-57 capital and surplus by contribution; or
22-58 (6) to suspend or revoke the certificate of authority.
22-59 (b) The commissioner [State Board of Insurance] is
22-60 authorized, by rules and regulations, to fix uniform standards and
22-61 criteria for early warning that the continued operation of any
22-62 health maintenance organization might be hazardous to its
22-63 enrollees, creditors, or the general public, and to fix standards
22-64 for evaluating the financial condition of any health maintenance
22-65 organization, which standards shall be consistent with the purposes
22-66 expressed in Subsection (a) of this section.
22-67 SECTION 17. Subsection (a), Section 20, Texas Health
22-68 Maintenance Organization Act (Article 20A.20, Vernon's Texas
22-69 Insurance Code), is amended to read as follows:
23-1 (a) The commissioner may after notice and opportunity for
23-2 hearing (i) suspend or revoke any certificate of authority issued
23-3 to a health maintenance organization under this Act; (ii) impose
23-4 sanctions under Section 7, Article 1.10, Insurance Code;
23-5 (iii) impose administrative penalties under Article 1.10E,
23-6 Insurance Code; or (iv) issue a cease and desist order under
23-7 Article 1.10A, Insurance Code, if the commissioner finds that any
23-8 of the following conditions exist:
23-9 (1) The health maintenance organization is operating
23-10 significantly in contravention of its basic organizational
23-11 documents, or its health care plan, or in a manner contrary to that
23-12 described in and reasonably inferred from any other information
23-13 submitted under Section 4 of this Act.
23-14 (2) The health maintenance organization issues
23-15 evidence of coverage or uses a schedule of charges for health care
23-16 services which does not comply with the requirements of Section 9
23-17 of this Act.
23-18 (3) The health care plan does not provide or arrange
23-19 for basic health care services or the single health care service
23-20 plan does not provide or arrange for a single health care service.
23-21 (4) The [board certifies to the commissioner that:]
23-22 [(A) the] health maintenance organization does
23-23 not meet the requirements of Section 5(a)(1) [5(a)(2)] of this
23-24 Act.[; or]
23-25 (5) The [(B) the] health maintenance organization is
23-26 unable to fulfill its obligation to furnish health care services as
23-27 required under its health care plan or to furnish a single health
23-28 care service as required under its single health care service plan.
23-29 (6) [(5)] The health maintenance organization is no
23-30 longer financially responsible and may be reasonably expected to be
23-31 unable to meet its obligations to enrollees or prospective
23-32 enrollees.
23-33 (7) [(6)] The health maintenance organization has
23-34 failed to implement the complaint system required by Section 12 of
23-35 this Act in a manner to resolve reasonably valid complaints.
23-36 (8) [(7)] The health maintenance organization, or any
23-37 person on its behalf, has advertised or merchandised its services
23-38 in an untrue, misrepresentative, misleading, deceptive, or unfair
23-39 manner.
23-40 (9) [(8)] The continued operation of the health
23-41 maintenance organization would be hazardous to its enrollees.
23-42 (10) [(9)] The health maintenance organization has
23-43 otherwise failed to comply substantially with this Act, and any
23-44 rule and regulation thereunder.
23-45 (11) The health maintenance organization has failed to
23-46 carry out corrective action the commissioner considers necessary to
23-47 correct a failure to comply with this Act, any applicable provision
23-48 of the Insurance Code, or any applicable rule or order of the
23-49 commissioner within 30 days after the date of notice of a
23-50 deficiency or within any longer period of time that the
23-51 commissioner determines to be reasonable and specifies in the
23-52 notice.
23-53 SECTION 18. Section 22, Texas Health Maintenance
23-54 Organization Act (Article 20A.22, Vernon's Texas Insurance Code),
23-55 is amended to read as follows:
23-56 Sec. 22. RULES AND REGULATIONS. (a) The commissioner
23-57 [State Board of Insurance] may promulgate such reasonable rules and
23-58 regulations as are necessary and proper to carry out the provisions
23-59 of this Act.
23-60 (b) The commissioner [State Board of Insurance] is
23-61 specifically authorized to promulgate rules to prescribe
23-62 [prescribing] authorized investments for health maintenance
23-63 organizations for all investments for which provision is not
23-64 otherwise made in this Act; to ensure that enrollees have adequate
23-65 access to health care services; and to establish minimum
23-66 physician/patient ratios, mileage requirements for primary and
23-67 specialty care, maximum travel time, and maximum waiting times for
23-68 obtaining appointments. The rulemaking authority provided by this
23-69 subsection does not limit in any manner the rulemaking authority
24-1 granted to the commissioner [State Board of Insurance] under
24-2 Subsection (a) of this section.
24-3 (c) The commissioner may promulgate such reasonable rules
24-4 and regulations as are necessary and proper to meet the
24-5 requirements of federal law and regulations.
24-6 SECTION 19. Section 23, Texas Health Maintenance
24-7 Organization Act (Article 20A.23, Vernon's Texas Insurance Code),
24-8 is amended to read as follows:
24-9 Sec. 23. APPEALS. (a) Any person who is affected by any
24-10 rule, ruling, or decision of the Texas Department of Insurance or
24-11 the commissioner [or board] shall have the right to have such rule,
24-12 ruling, or decision reviewed by the commissioner [State Board of
24-13 Insurance] by making an application to the commissioner [State
24-14 Board of Insurance]. Such application shall state the identities
24-15 of the person, the rule, ruling, or decision complained of, the
24-16 interest of the person in such rule, ruling, or decision, the
24-17 grounds of such objection, the action sought of the commissioner
24-18 [State Board of Insurance], and the reasons and grounds for such
24-19 action by the commissioner [State Board of Insurance]. The
24-20 original shall be filed with the chief clerk of the Texas
24-21 Department [State Board] of Insurance together with a certification
24-22 that a true and correct copy of such application has been filed
24-23 with the commissioner. Within 30 days after the application is
24-24 filed, and after 10 days' written notice to all parties of record,
24-25 the commissioner [State Board of Insurance] shall review the action
24-26 complained of in a public hearing and render its decision at the
24-27 earliest possible date thereafter. The commissioner [State Board
24-28 of Insurance] shall make such other rules and regulations with
24-29 respect to such applications and their consideration as it
24-30 considers to be advisable, not inconsistent with this Act. Said
24-31 application shall have precedence over all other business of a
24-32 different nature pending before said commissioner [State Board of
24-33 Insurance].
24-34 (b) In the public hearing, any and all evidence and matters
24-35 pertinent to the appeal may be submitted to the commissioner [State
24-36 Board of Insurance] whether included in the application or not.
24-37 (c) If any person who is affected by any rule, ruling, or
24-38 decision of the commissioner [State Board of Insurance] be
24-39 dissatisfied with any rule, ruling, or decision adopted by the
24-40 commissioner, [board, or State Board of Insurance,] that person,
24-41 after failing to get relief from the commissioner [State Board of
24-42 Insurance], may file a petition seeking review of the rule, ruling,
24-43 or decision and setting forth the particular objection to such
24-44 rule, ruling, or decision, or either or all of them, in a district
24-45 court of Travis County, Texas, and not elsewhere, against the
24-46 commissioner [State Board of Insurance] as defendant. The action
24-47 shall have precedence over all other causes on the docket of a
24-48 different nature. The proceedings on appeal shall be tried and
24-49 determined as provided by Article 1.04, Insurance Code. Either
24-50 party to the action may appeal to the apellate court having
24-51 jurisdiction of the cause and the appeal shall at once be
24-52 returnable to the apellate court having jurisdiction of the cause
24-53 and the action so appealed shall have precedence in the appellate
24-54 court over all causes of a different character therein pending.
24-55 The commissioner [State Board of Insurance] is not required to give
24-56 any appeal bond in any cause arising hereunder.
24-57 SECTION 20. Subdivision (4), Subsection (f), Section 26,
24-58 Texas Health Maintenance Organization Act (Article 20A.26, Vernon's
24-59 Texas Insurance Code), is amended to read as follows:
24-60 (4) Except for Articles 21.07-6 and 21.58A, Insurance
24-61 Code, the insurance laws, including the group hospital service
24-62 corporation law, do not apply to physicians and providers; however,
24-63 [provided that Article 21.58A shall not apply to utilization review
24-64 undertaken by] a physician or provider who conducts utilization
24-65 review during [in] the ordinary course of treatment of patients [by
24-66 a physician or provider] pursuant to a joint or delegated review
24-67 agreement or agreements with a health maintenance organization on
24-68 services rendered by the physician or provider shall not be
24-69 required to obtain certification under Section 3, Article 21.58A,
25-1 Insurance Code.
25-2 SECTION 21. Section 28, Texas Health Maintenance
25-3 Organization Act (Article 20A.28, Vernon's Texas Insurance Code),
25-4 is amended to read as follows:
25-5 Sec. 28. AUTHORITY TO CONTRACT. The commissioner [or
25-6 board], in carrying out the commissioner's [their] obligations
25-7 under this Act, may contract with other state agencies or, after
25-8 notice and opportunity for hearing, with other qualified persons to
25-9 make recommendations concerning the determinations to be made by
25-10 the commissioner [or board].
25-11 SECTION 22. Section 32, Texas Health Maintenance
25-12 Organization Act (Article 20A.32, Vernon's Texas Insurance Code),
25-13 is amended to read as follows:
25-14 Sec. 32. FEES. (a)(1) Every organization subject to this
25-15 chapter shall pay to the commissioner the following fees:
25-16 (A) for filing and review of its original
25-17 application for a certificate of authority, a fee in an amount not
25-18 to exceed $18,000 [$15,000] as determined by the commissioner
25-19 [State Board of Insurance];
25-20 (B) for filing each annual report pursuant to
25-21 Section 10 of this Act, a fee in an amount not to exceed $500 as
25-22 determined by the commissioner [State Board of Insurance];
25-23 (C) the expenses of all examinations of health
25-24 maintenance organizations made on behalf of the State of Texas by
25-25 the commissioner [State Board of Insurance] or under the
25-26 commissioner's [its] authority in such amounts as the commissioner
25-27 shall certify to be just and reasonable;
25-28 (D) the expenses of an examination under Section
25-29 17(a) of this Act incurred by the commissioner or under the
25-30 commissioner's authority, provided that:
25-31 (i) examination expenses are the expenses
25-32 attributable directly to a specific examination including the
25-33 actual salaries and expenses of the examiners directly attributable
25-34 to that examination as determined under rules adopted by the
25-35 commissioner; and
25-36 (ii) the expenses shall be assessed by the
25-37 commissioner and paid in accordance with rules adopted by the
25-38 commissioner;
25-39 (E) the licensing, appointment, and examination
25-40 fees pursuant to Section 15 of this[, Texas Health Maintenance
25-41 Organization] Act [(Article 20A.15, Vernon's Texas Insurance
25-42 Code)];
25-43 (F) [(E)] for filing an evidence of coverage
25-44 which requires approval, a fee not to exceed $200 as determined by
25-45 the commissioner [State Board of Insurance]; and
25-46 (G) [(F)] for filings required by rule but which
25-47 do not require approval, a fee not to exceed $100 as determined by
25-48 the commissioner [State Board of Insurance].
25-49 (2) The commissioner [State Board of Insurance] shall,
25-50 within the limits fixed by this subsection, prescribe the fees to
25-51 be charged under this subsection.
25-52 (3) Fees collected under this subsection must be
25-53 deposited in the State Treasury to the credit of the Texas
25-54 Department [State Board] of Insurance operating fund.
25-55 (4) Notwithstanding Subdivision (1) of this
25-56 subsection, the comptroller shall collect the annual report filing
25-57 fee prescribed by Subdivision (1)(B) of this subsection.
25-58 (b)[(1) Every organization subject to this chapter shall pay
25-59 to the board the following fees:]
25-60 [(A) for review of its original application for
25-61 a certificate of authority, a fee in an amount not to exceed $3,000
25-62 as determined by the board and paid pursuant to rules adopted by
25-63 the board; and]
25-64 [(B) the expenses of an examination under
25-65 Section 17(b) of this Act incurred by the board or under its
25-66 authority.]
25-67 [(2) Examination expenses are the expenses
25-68 attributable directly to a specific examination including the
25-69 actual salaries and expenses of the examiners plus the cost of
26-1 administrative departmental expenses directly attributable to that
26-2 examination as determined under rules adopted by the board. The
26-3 expenses shall be assessed by the board and paid in accordance with
26-4 rules adopted by the board.]
26-5 [(3) Except as provided by Subdivision (4) of this
26-6 subsection, the amount paid by a health maintenance organization in
26-7 each taxable year under Subdivision (1)(B) of this subsection shall
26-8 be allowed as a credit on the amount of premium taxes to be paid by
26-9 the health maintenance organization for that taxable year.]
26-10 [(4)] The amount directly attributable to an
26-11 examination of the books, records, accounts, or principal offices
26-12 of a health maintenance organization located outside this state may
26-13 not be allowed as a credit against the amount of premium taxes to
26-14 be paid by the health maintenance organization.
26-15 [(5) The funds received by the board shall be
26-16 deposited in the state treasury to the credit of the Texas
26-17 Department of Health health maintenance organization fund, and
26-18 those funds shall be appropriated to the Texas Department of Health
26-19 to carry out the statutory duties of the board under this chapter.]
26-20 SECTION 23. Subsections (a), (b), (c), (e), and (g), Section
26-21 36, Texas Health Maintenance Organization Act (Article 20A.36,
26-22 Vernon's Texas Insurance Code), are amended to read as follows:
26-23 (a) The Health Maintenance Organization Solvency
26-24 Surveillance Committee is created under the direction of the
26-25 commissioner. The committee shall perform its functions under a
26-26 plan of operation approved by the commissioner [State Board of
26-27 Insurance]. The committee is composed of nine members appointed by
26-28 the commissioner [of insurance]. No two members may be employees
26-29 or officers of the same health maintenance organization or holding
26-30 company system. The qualifications for membership, terms of
26-31 office, and reimbursement of expenses shall be as provided by the
26-32 plan of operation approved by the commissioner [State Board of
26-33 Insurance]. A "member" is a Texas licensed health maintenance
26-34 organization as defined in Section 2(n) [2(j)] of this Act or a
26-35 public representative. The commissioner of insurance shall appoint
26-36 the member along with the officer or employee of the member who
26-37 shall serve on the committee if the member is a representative of a
26-38 Texas licensed health maintenance organization or its holding
26-39 company system. Five of the members shall represent health
26-40 maintenance organizations or their holding company system. Of the
26-41 health maintenance organization members, one shall be a single
26-42 health care service plan as defined in Section 2(y) [2(s)] of this
26-43 Act. The remaining health maintenance organization members shall
26-44 be selected by the commissioner [of insurance] with due
26-45 consideration of factors deemed appropriate including, but not
26-46 limited to, the varying categories of premium income and
26-47 geographical location.
26-48 A public representative may not be:
26-49 (1) an officer, director, or employee of a health
26-50 maintenance organization, a health maintenance organization agent,
26-51 or any other business entity regulated by the commissioner [State
26-52 Board of Insurance];
26-53 (2) a person required to register with the Texas
26-54 Ethics Commission [secretary of state] under Chapter 305,
26-55 Government Code; or
26-56 (3) related to a person described by Subdivision (1)
26-57 or (2) of this subsection within the second degree of affinity or
26-58 consanguinity.
26-59 (b)(1) The committee shall assist and advise the
26-60 commissioner relating to the detection and prevention of insolvency
26-61 problems regarding health maintenance organizations. The committee
26-62 shall also assist and advise the commissioner regarding any health
26-63 maintenance organization placed in rehabilitation, liquidation,
26-64 supervision, or conservation. The method of providing this
26-65 assistance and advice shall be as contained in the plan of
26-66 operation approved by the commissioner [State Board of Insurance].
26-67 (2) Reports regarding the financial condition of Texas
26-68 licensed health maintenance organizations and regarding the
26-69 financial condition, administration, and status of health
27-1 maintenance organizations in rehabilitation, liquidation,
27-2 supervision, or conservation shall be provided to the committee
27-3 members at meetings. Committee members shall not reveal the
27-4 condition of nor any information secured in the course of any
27-5 meeting of the Solvency Surveillance Committee with regard to any
27-6 corporation, form or person examined by the committee. Committee
27-7 proceedings shall be filed with the commissioner [and reported to
27-8 the members of the State Board of Insurance].
27-9 (c) To provide funds for the administrative expenses of the
27-10 commissioner [State Board of Insurance] regarding rehabilitation,
27-11 liquidation, supervision, or conservation of an impaired health
27-12 maintenance organization in this state, the committee, at the
27-13 commissioner's direction, shall assess each health maintenance
27-14 organization licensed in this state in the proportion that the
27-15 gross premiums of that health maintenance organization written in
27-16 this state during the preceding calendar year bear to the aggregate
27-17 gross premiums written in this state by all health maintenance
27-18 organizations, as furnished to the committee by the commissioner
27-19 after review of annual statements and other reports the
27-20 commissioner considers necessary. Assessments to supplement or pay
27-21 for administrative expenses of rehabilitation, liquidation,
27-22 supervision, or conservation may be made only after the
27-23 commissioner determines that adequate assets of the health
27-24 maintenance organization are not immediately available for those
27-25 purposes or that use of those assets could be detrimental to
27-26 rehabilitation, liquidation, supervision, or conservation. The
27-27 commissioner may abate or defer the assessments, either in whole or
27-28 in part, if, in the opinion of the commissioner, payment of the
27-29 assessment would endanger the ability of a health maintenance
27-30 organization to fulfill its contractual obligations. If an
27-31 assessment is abated or deferred, either in whole or in part, the
27-32 amount by which the assessment is abated or deferred may be
27-33 assessed against the remaining licensed health maintenance
27-34 organizations in a manner consistent with the basis for assessments
27-35 provided by the plan of operation approved by the commissioner
27-36 [State Board of Insurance]. The total of all assessments on a
27-37 health maintenance organization may not exceed one-quarter of one
27-38 percent of the health maintenance organization's gross premiums in
27-39 any one calendar year.
27-40 (e) Not later than the 180th day after the date on which the
27-41 final member of the committee is appointed, the committee shall
27-42 submit to the commissioner [State Board of Insurance] a plan of
27-43 operation. The plan of operation takes effect on approval in
27-44 writing by the commissioner [State Board of Insurance]. If the
27-45 committee fails to submit a suitable plan of operation within the
27-46 period set by this subsection, or if, after the adoption of a plan,
27-47 the committee fails to submit suitable amendments to the plan, the
27-48 commissioner [State Board of Insurance] may, after notice and
27-49 hearing, adopt rules as necessary to implement this Act. Those
27-50 rules continue in effect until modified by the commissioner [State
27-51 Board of Insurance] or superseded by a plan submitted by the
27-52 committee and approved by the commissioner [State Board of
27-53 Insurance].
27-54 (g) A licensed health maintenance organization or its agents
27-55 or employees, the committee or its agents, employees, or members,
27-56 or the [State Board of Insurance, the] commissioner[,] or the
27-57 commissioner's [their] representatives are not liable in a civil
27-58 action for any act taken or not taken in good faith in the
27-59 performance of powers and duties under this section.
27-60 SECTION 24. The Texas Health Maintenance Organization Act
27-61 (Article 20A.01 et seq., Vernon's Texas Insurance Code), is amended
27-62 by adding Section 37 to read as follows:
27-63 Sec. 37. HEALTH MAINTENANCE ORGANIZATION QUALITY ASSURANCE.
27-64 (a) A health maintenance organization shall establish procedures
27-65 to assure that the health care services provided to enrollees shall
27-66 be rendered under reasonable standards of quality of care
27-67 consistent with prevailing professionally recognized standards of
27-68 medical practice. Such procedures shall include mechanisms to
27-69 assure availability, accessibility, quality, and continuity of
28-1 care.
28-2 (b) A health maintenance organization shall have an ongoing
28-3 internal quality assurance program to monitor and evaluate its
28-4 health care services, including primary and specialist physician
28-5 services, and ancillary and preventive health care services, in all
28-6 institutional and noninstitutional contexts. The commissioner by
28-7 rule may establish minimum standards and requirements for ongoing
28-8 internal quality assurance programs for health maintenance
28-9 organizations, including but not limited to standards for assuring
28-10 availability, accessibility, quality, and continuity of care.
28-11 (c) A health maintenance organization shall record formal
28-12 proceedings of quality assurance program activities and maintain
28-13 documentation in a confidential manner. Quality assurance program
28-14 minutes shall be available to the commissioner.
28-15 (d) A health maintenance organization shall establish and
28-16 maintain a physician review panel to assist in reviewing medical
28-17 guidelines or criteria and to assist in determining the
28-18 prescription drugs to be covered by the health maintenance
28-19 organization, if the health maintenance organization offers a
28-20 prescription drug benefit.
28-21 (e) A health maintenance organization shall ensure the use
28-22 and maintenance of an adequate patient record system that will
28-23 facilitate documentation and retrieval of clinical information for
28-24 the purpose of the health maintenance organization's evaluation of
28-25 continuity and coordination of patient care and assessment of the
28-26 quality of health and medical care provided to enrollees.
28-27 (f) Enrollees' clinical records shall be available to the
28-28 commissioner for examination and review to determine compliance.
28-29 Such records shall be confidential and not subject to the open
28-30 records law, Chapter 552, Government Code.
28-31 (g) A health maintenance organization shall establish a
28-32 mechanism for the periodic reporting of quality assurance program
28-33 activities to the governing body, providers, and appropriate
28-34 organization staff.
28-35 SECTION 25. This Act takes effect September 1, 1997.
28-36 SECTION 26. The importance of this legislation and the
28-37 crowded condition of the calendars in both houses create an
28-38 emergency and an imperative public necessity that the
28-39 constitutional rule requiring bills to be read on three several
28-40 days in each house be suspended, and this rule is hereby suspended.
28-41 * * * * *