1-1     By:  Madla                                             S.B. No. 976

 1-2           (In the Senate - Filed March 6, 1997; March 10, 1997, read

 1-3     first time and referred to Committee on Economic Development;

 1-4     April 11, 1997, reported adversely, with favorable Committee

 1-5     Substitute by the following vote:  Yeas 11, Nays 0; April 11, 1997,

 1-6     sent to printer.)

 1-7     COMMITTEE SUBSTITUTE FOR S.B. No. 976                    By:  Madla

 1-8                            A BILL TO BE ENTITLED

 1-9                                   AN ACT

1-10     relating to managed care plans issued by managed care organizations

1-11     under Medicare risk-sharing contracts; providing administrative

1-12     penalties.

1-13           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

1-14           SECTION 1.  Subchapter E, Chapter 21, Insurance Code, is

1-15     amended by adding Article 21.52G to read as follows:

1-16           Art. 21.52G.  REQUIREMENTS FOR MANAGED CARE ORGANIZATIONS

1-17     UNDER MEDICARE RISK-SHARING CONTRACTS

1-18           Sec. 1.  DEFINITIONS.  In this article:

1-19                 (1)  "Managed care organization" means an eligible

1-20     organization under 42 U.S.C. Section 1395mm.

1-21                 (2)  "Managed care plan" means a health benefit plan

1-22     issued by a managed care organization through which the

1-23     organization provides certain health care services.

1-24                 (3)  "Enrollee" means a person who receives certain

1-25     health care services through a managed care plan.

1-26                 (4)  "Participating provider" means a physician or

1-27     other health care provider who is under contract with a managed

1-28     care organization to provide certain health care services to

1-29     enrollees in a managed care plan issued by the organization.

1-30                 (5)  "Medicare" means the health insurance program for

1-31     the aged established under Parts A and B, Title XVIII, Social

1-32     Security Act (42 U.S.C. Section 1395 et seq.).

1-33                 (6)  "Risk-sharing contract" has the meaning assigned

1-34     by 42 U.S.C. Section 1395mm.

1-35           Sec. 2.  SCOPE OF ARTICLE.  This article applies only to

1-36     enrollment of a Medicare recipient in a managed care plan issued by

1-37     a managed care organization that enters into a risk-sharing

1-38     contract to provide certain health care services to Medicare

1-39     recipients through that managed care plan.

1-40           Sec. 3.  NOTICE TO PROVIDERS.  Not later than the 10th day

1-41     after the date on which a managed care organization enrolls an

1-42     enrollee in a managed care plan, the organization shall provide to

1-43     each health care provider listed by the enrollee under Section 3(a)

1-44     of this article written notice of the enrollment and notice of the

1-45     extent to which the plan will reimburse the provider for services

1-46     provided to the new enrollee.

1-47           Sec. 4.  DUTIES TO ENROLLEES.  (a)  A managed care

1-48     organization shall provide to an enrollee a sticker to attach to

1-49     the enrollee's Medicare identification card that indicates

1-50     enrollment in the managed care plan.  The sticker must include the

1-51     name of the plan and the plan's telephone number.

1-52           (b)  A managed care organization shall ensure continuity of

1-53     care for all plan enrollees by ensuring the enrollee's timely

1-54     selection of a primary health care provider who is a participating

1-55     provider.

1-56           (c)  A managed care organization that fails to provide for

1-57     the timely selection of a primary health care provider by an

1-58     enrollee shall reimburse a health care provider for all health care

1-59     services provided to the enrollee before the enrollee selects a

1-60     primary health care provider, regardless of whether the provider

1-61     who provides those services is a participating provider.

1-62           Sec. 5.  OMBUDSMAN.  The department shall provide an

1-63     ombudsman to assist Medicare recipients enrolled in managed care

1-64     plans and to ensure that managed care organizations subject to this

 2-1     article comply with this article.

 2-2           Sec. 6.  MANAGED CARE PLAN FORMS.  A managed care

 2-3     organization may not use a printed form for enrollment in a managed

 2-4     care plan unless the organization files a copy of the form with the

 2-5     commissioner not later than the 60th day before the date on which

 2-6     the organization proposes to use the form.  The organization may

 2-7     use the form unless the commissioner notifies the organization of

 2-8     the commissioner's disapproval of the form not later than the 15th

 2-9     day before the date of proposed use of the form.

2-10           Sec. 7.  ADVERTISING.  A managed care organization may not

2-11     advertise the availability of its managed care plan for Medicare

2-12     recipients unless the organization files a copy of the

2-13     advertisement with the commissioner not later than the 60th day

2-14     before the date the organization proposes to use the advertisement.

2-15     The organization may use the advertisement unless the commissioner

2-16     notifies the organization of the commissioner's disapproval of the

2-17     advertisement not later than the 15th day before the date of

2-18     proposed use of the advertisement.

2-19           Sec. 8.  ADMINISTRATIVE PENALTY.  A managed care organization

2-20     that violates this article is subject to administrative penalties

2-21     under Article 1.10E of this code.

2-22           Sec. 9.  RULES.  The commissioner shall adopt rules to

2-23     implement this article.

2-24           SECTION 2.  Not later than January 1, 1998, the commissioner

2-25     of insurance shall adopt rules as required by Section 10, Article

2-26     21.52G, Insurance Code, as added by this Act.

2-27           SECTION 3.  (a)  This Act takes effect September 1, 1997.

2-28           (b)  This Act applies only to an evidence of coverage under a

2-29     managed care plan that is delivered, issued for delivery, or

2-30     renewed on or after January 1, 1998.  An evidence of coverage under

2-31     a managed care plan that is delivered, issued for delivery, or

2-32     renewed before January 1, 1998, is governed by the law as it

2-33     existed immediately before the effective date of this Act, and that

2-34     law is continued in effect for that purpose.

2-35           (c)  This Act applies to an advertisement for a managed care

2-36     plan used on or after January 1, 1998.  An advertisement used

2-37     before January 1, 1998, is governed by the law as it existed

2-38     immediately before the effective date of this Act, and that law is

2-39     continued in effect for that purpose.

2-40           SECTION 4.  The importance of this legislation and the

2-41     crowded condition of the calendars in both houses create an

2-42     emergency and an imperative public necessity that the

2-43     constitutional rule requiring bills to be read on three several

2-44     days in each house be suspended, and this rule is hereby suspended.

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