By Harris                                        S.B. No. 464

      75R4696 DLF-F                           

                                A BILL TO BE ENTITLED

 1-1                                   AN ACT

 1-2     relating to providing fairness and choice to certain patients and

 1-3     providers under managed care health benefit plans.


 1-5           SECTION 1.  Chapter 21, Insurance Code, is amended by adding

 1-6     Subchapter G to read as follows:


 1-8           Art. 21.101.  SHORT TITLE.  This subchapter may be cited as

 1-9     the Dental Patient Assurance Act.

1-10           Art. 21.102.  DEFINITIONS.  In this subchapter:

1-11                 (1)  "Commissioner" means the Commissioner of

1-12     Insurance.

1-13                 (2)  "Dentist" means a person licensed to practice

1-14     dentistry by the State Board of Dental Examiners.

1-15                 (3)  "Department" means the Texas Department of

1-16     Insurance.

1-17                 (4)  "Emergency dental services" means dental services

1-18     provided for an emergency dental condition.

1-19                 (5)  "Emergency dental condition" means a dental

1-20     condition manifesting itself by acute symptoms, such as severe

1-21     pain, of sufficient severity so that the absence of immediate

1-22     dental attention could reasonably be expected to result in:

1-23                       (A)  serious jeopardy to the health of the

1-24     individual;

 2-1                       (B)  serious impairment to a bodily function; or

 2-2                       (C)  serious dysfunction of an organ or part of

 2-3     the body.

 2-4                 (6)  "Managed care entity" means a health maintenance

 2-5     organization licensed under the Texas Health Maintenance

 2-6     Organization Act (Chapter 20A, Vernon's Texas Insurance Code), a

 2-7     preferred provider organization, or another organization that

 2-8     provides for the financing and delivery of health care or dental

 2-9     services to persons enrolled in a coverage plan offered by the

2-10     entity through:

2-11                       (A)  arrangements with selected dentists to

2-12     furnish health or dental care services;

2-13                       (B)  explicit standards for the selection of

2-14     participating dentists;

2-15                       (C)  organizational arrangements for ongoing

2-16     quality assurance, utilization review, and dispute resolution; or

2-17                       (D)  differential coverage or payments or

2-18     financial incentives for a person enrolled in the plan to use the

2-19     participating dentists and procedures provided by the plan.

2-20                 (7)  "Managed care plan" means a plan of health care

2-21     coverage offered by a managed care entity.  The term does not

2-22     include accident-only, specified disease, individual hospital

2-23     indemnity, credit, vision only, Medicare supplement or Medicare

2-24     Select, long-term care, disability income, CHAMPUS supplement, or

2-25     workers' compensation insurance, insurance coverage issued as a

2-26     supplement to liability insurance or other similar insurance, or

2-27     automobile medical payment insurance.

 3-1                 (8)  "Prospective enrollee" means an individual

 3-2     applying for enrollment in a managed care plan or eligible for

 3-3     enrollment in a group managed care plan.

 3-4           Art. 21.103.  STANDARDS.  The commissioner by rule may adopt

 3-5     standards to ensure compliance with this subchapter by managed care

 3-6     entities that conduct business in this state.

 3-7           Art. 21.104.  POINT-OF-SERVICE OFFERING.  (a)  A managed care

 3-8     entity shall provide an optional point-of-service plan as part of a

 3-9     managed care plan.

3-10           (b)  If the managed care plan is offered to an enrollee

3-11     through an employer-sponsored benefit plan, any additional costs

3-12     for the point-of-service plan are the responsibility of the

3-13     enrollee and the employer may impose a reasonable administrative

3-14     fee for providing the optional point-of-service plan.  The

3-15     department may review an administrative fee imposed under this

3-16     subsection, and the commissioner may by order require the employer

3-17     to lower the fee if the commissioner finds that the fee is not

3-18     reasonable.  As an alternative to a point-of-service plan, an

3-19     employer may offer enrollees a direct reimbursement program.  An

3-20     employer that offers a direct reimbursement program is not

3-21     otherwise subject to this article.

3-22           (c)  If a managed care entity offers a point-of-service plan

3-23     in its service area and is the only entity providing services under

3-24     a health benefit plan, it must offer to all eligible enrollees the

3-25     opportunity to obtain coverage for out-of-network services through

3-26     the point-of-service plan at the time of enrollment and at least

3-27     annually.

 4-1           (d)  The premium for the point-of-service plan must be based

 4-2     on the actuarial value of that coverage.

 4-3           (e)  In this article:

 4-4                 (1)  "Direct reimbursement program" means a program

 4-5     under which an enrollee is reimbursed from a contribution fund

 4-6     based on a percentage of dollars spent for dental care provided

 4-7     that is funded by employer or employee contributions and that

 4-8     allows an enrollee to obtain dental treatment from the dentist of

 4-9     the enrollee's choice.

4-10                 (2)  "Point-of-service plan" means a plan provided

4-11     through a contractual arrangement under which indemnity benefits

4-12     for the cost of health or dental care services, other than

4-13     emergency care or emergency dental care, are provided by an insurer

4-14     or group hospital service corporation in conjunction with

4-15     corresponding benefits arranged or provided by a managed care

4-16     entity.  An enrollee may choose to obtain benefits or services

4-17     under either the indemnity plan or managed care plan in accordance

4-18     with specific provisions of a point-of-service contract.

4-19           Art. 21.105.  ENROLLEE INFORMATION.  (a)  A managed care

4-20     entity shall provide a prospective enrollee a written description

4-21     of the terms and conditions of the managed care plan.  The written

4-22     plan description must be in a readable and understandable format

4-23     and must include:

4-24                 (1)  coverage provisions;

4-25                 (2)  benefits, including generic and brand name

4-26     prescription drug coverage;

4-27                 (3)  any exclusions by category of service, by type of

 5-1     dentist, and, if applicable, by specific service or types of drugs;

 5-2                 (4)  any required prior authorization for benefits,

 5-3     including:

 5-4                       (A)  procedures for and limitations or

 5-5     restrictions on referrals to other dentists; or

 5-6                       (B)  other review requirements, including

 5-7     preauthorization review, concurrent review, postservice review, and

 5-8     postpayment review;

 5-9                 (5)  an explanation of enrollee financial

5-10     responsibility for payment for coinsurance or other noncovered or

5-11     out-of-plan services;

5-12                 (6)  a disclosure to prospective enrollees that

5-13     includes the following language:

5-14                        "YOUR RIGHTS UNDER TEXAS LAW:

5-15           "You have the right to information about the plan, including

5-16     how the plan operates, what general types of financial arrangements

5-17     exist between dentists and the plan, names and locations of

5-18     dentists participating in the plan, the numbers of enrollees and

5-19     dentists in the plan, the percentage of premiums allocated for

5-20     dental care, administrative costs, and profit, and an explanation

5-21     of the benefits to which enrollees are entitled under the terms of

5-22     the plan."; and

5-23                 (7)  a phone number and address for the prospective

5-24     enrollee to obtain additional information concerning the items

5-25     described by the disclosure required by this subsection.

5-26           (b)  The managed care entity may provide the information

5-27     under Subsection (a)(6) of this article regarding the percentage of

 6-1     premiums allocated for dental care, administrative costs, and

 6-2     profit by providing the information included in the entity's annual

 6-3     financial statement most recently submitted to the department.

 6-4           (c)  If the managed care plan uses a capitation method of

 6-5     compensation, the plan must establish and follow procedures that

 6-6     ensure that:

 6-7                 (1)  each plan application form includes a space in

 6-8     which each enrollee selects a dentist;

 6-9                 (2)  each enrollee who fails to select a dentist and is

6-10     assigned a dentist is notified of the name and location of that

6-11     dentist;

6-12                 (3)  a dentist is assigned to each new enrollee not

6-13     later than the 30th day after the date the enrollee is enrolled;

6-14     and

6-15                 (4)  a dentist to whom an enrollee is assigned is

6-16     physically located within a reasonable travel distance, as

6-17     established by rule adopted by the commissioner, from the residence

6-18     or place of employment of the enrollee.

6-19           (d)  A managed care entity that represents to an enrollee or

6-20     prospective enrollee that a dentist is a participant in a managed

6-21     care plan without the dentist's prior consent commits an unfair and

6-22     deceptive act in the business of insurance for purposes of Article

6-23     21.21 of this code.

6-24           Art. 21.106.  FINANCIAL INCENTIVE PROGRAMS.  A managed care

6-25     entity may not use a financial incentive or make a payment to a

6-26     dentist that acts directly or indirectly as an inducement to limit

6-27     dental services.

 7-1           Art. 21.107.  MANAGED DENTAL CARE ADMINISTRATION.  (a)  A

 7-2     managed care entity shall make patient treatment and referral

 7-3     decisions according to clinical guidelines developed and approved

 7-4     by dentists from the same or a similar area of practice.

 7-5           (b)  A referral or review decision made under a managed care

 7-6     plan must be made by a dentist.  The managed care entity shall

 7-7     provide a written procedure for an enrollee to appeal a denial of a

 7-8     referral to a specialist.

 7-9           Art. 21.108.  HEALTH MAINTENANCE SERVICES.  (a)  A managed

7-10     care plan must include health maintenance services, including

7-11     prevention and wellness information and services.  The health

7-12     maintenance services must be based on guidelines approved by the

7-13     commissioner.  In approving guidelines under this section, the

7-14     commissioner shall consider guidelines established by the American

7-15     Dental Association and the American Medical Association.

7-16           (b)  Each managed care entity at least annually shall notify

7-17     enrollees of the importance of obtaining preventive dental service

7-18     and shall maintain a record of providing this notice.

7-19           (c)  A participating dentist shall maintain a record of

7-20     dental services provided to an enrollee and shall report the

7-21     services to the managed care entity.

7-22           (d)  A managed care entity shall report the information

7-23     recorded under Subsections (b) and (c) of this section to the

7-24     department.

7-25           Art. 21.109.  ENROLLEE COMPLAINT PROCEDURES.  (a)  The

7-26     commissioner by rule shall adopt standardized enrollee complaint

7-27     procedures in accordance with this section.  The procedures shall

 8-1     prescribe internal complaint procedures within a managed care plan

 8-2     and include a procedure for subsequent appeals to the department on

 8-3     exhaustion of internal complaint procedures.

 8-4           (b)  Each managed care entity shall use an appeals panel to

 8-5     evaluate enrollee complaints.  An appeals panel created under this

 8-6     subsection must:

 8-7                 (1)  include at least one dentist who has expertise in

 8-8     the specific area of practice related to the appeal; and

 8-9                 (2)  have one-half of its total membership composed of

8-10     enrollees who are not employed by the managed care entity and who

8-11     do not have another potential conflict of interest in the appeal.

8-12           (c)  A managed care entity shall notify each enrollee in

8-13     writing of the complaint procedure during the solicitation of

8-14     enrollment, at the time of enrollment, and on the denial,

8-15     limitation, or termination of a service by the managed care entity.

8-16           (d)  Except as provided by Subsection (e) of this section, a

8-17     managed care entity shall investigate and provide a written

8-18     resolution of an enrollee complaint not later than the 30th day

8-19     after the date the complaint is made, unless the managed care

8-20     entity and the enrollee agree to extend this period.

8-21           (e)  The enrollee complaint process must provide for

8-22     expedited internal review of enrollee complaints regarding urgent

8-23     care that provides for review of the complaint and an oral or

8-24     written decision with respect to the complaint not later than 72

8-25     hours after the complaint is made.

8-26           (f)  The enrollee may designate a dentist, a physician, or

8-27     any other individual to file a complaint on behalf of the enrollee.

 9-1           (g)  A managed care entity shall notify an enrollee in

 9-2     writing of the reason for a denial, limitation, or termination of a

 9-3     service provided or to be provided to the enrollee.  The notice

 9-4     must be made not later than the 30th day after the date of the

 9-5     denial, limitation, or termination of the service and must identify

 9-6     by name and position the individual who made the decision to deny,

 9-7     limit, or terminate the service.

 9-8           Art. 21.110.  EMERGENCY SERVICES.  A managed care plan shall

 9-9     cover:

9-10                 (1)  emergency care services, including the treatment

9-11     and stabilization of an emergency dental condition, that are

9-12     provided to covered individuals, without regard to whether the

9-13     treating dentist has a contractual or other arrangement with the

9-14     entity to provide items or services to covered individuals;

9-15                 (2)  medically necessary services following treatment

9-16     or stabilization of an emergency dental condition that are provided

9-17     or initiated in a hospital emergency department without the prior

9-18     authorization of the managed care entity, unless within a

9-19     reasonable time appropriate to the circumstances, as determined by

9-20     the treating dentist, the managed care entity is notified and

9-21     denies coverage for the services; and

9-22                 (3)  any medical or dental screening examination to

9-23     determine whether an emergency dental condition exists and any

9-24     other evaluation required by state or federal law to be provided in

9-25     the emergency department of a hospital.

9-26           Art. 21.111.  PRIOR AUTHORIZATION; CONSENT.  A managed care

9-27     plan for which prior authorization is a condition to coverage of a

 10-1    service must ensure that enrollees are required to sign medical and

 10-2    dental information release consent forms on enrollment.

 10-3          Art. 21.112.  UTILIZATION REVIEW.  A managed care plan is

 10-4    subject to and shall meet the requirements of Article 21.58A of

 10-5    this code.

 10-6          SECTION 2.  Section 26, Texas Health Maintenance Organization

 10-7    Act (Section 20A.26, Vernon's Texas Insurance Code), is amended by

 10-8    adding Subsection (j) to read as follows:

 10-9          (j)  A health maintenance organization is subject to

10-10    Subchapter G, Chapter 21, Insurance Code.

10-11          SECTION 3.  This Act takes effect September 1, 1997, and

10-12    applies only to a managed care plan that is delivered, issued for

10-13    delivery, or renewed on or after January 1, 1998.  A managed care

10-14    plan that is delivered, issued for delivery, or renewed before

10-15    January 1, 1998, is governed by the law as it existed immediately

10-16    before the effective date of this Act, and that law is continued in

10-17    effect for this purpose.

10-18          SECTION 4.  The importance of this legislation and the

10-19    crowded condition of the calendars in both houses create an

10-20    emergency and an imperative public necessity that the

10-21    constitutional rule requiring bills to be read on three several

10-22    days in each house be suspended, and this rule is hereby suspended.