HBA-TYH, NMO H.B. 1194 76(R)BILL ANALYSIS Office of House Bill AnalysisH.B. 1194 By: Turner, Bob Insurance 7/21/1999 Enrolled BACKGROUND AND PURPOSE The 75th Texas Legislature enacted legislation creating the statewide rural health care system (system). The system provided rural communities an alternative to urban-based Health Maintenance Organizations now operating in rural Texas. However, certain changes were necessary to improve the implementation of the system. H.B. 1194 requires the commissioner of insurance (commissioner) to consider certain criteria in designating rural areas for the purposes of the system. This bill also provides that the system, if providing services on a prepaid basis, must obtain a certificate of authority under the Texas Health Maintenance Organization Act, and makes changes regarding the board of directors of the system and the advisory committee appointed by the board. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that rulemaking authority is expressly delegated to the commissioner of insurance in SECTION 4 (Article 20C.04, Insurance Code) of this bill. SECTION BY SECTION ANALYSIS SECTION 1. (a) GOALS OF SYSTEM. Provides that the statewide rural health care system established under Chapter 20C (Statewide Rural Health Care System), Insurance Code, is designed to incorporate the specified consumer-oriented attributes considered important to a successful health care organization. (b) PATIENT RIGHTS POLICIES. Provides that the statewide rural health care system is intended to incorporate patient-focused considerations that include open communication, informed consent, protection of confidentiality and privacy, full disclosure of program policies and procedures to patients and providers, coverage of emergency care, disclosure of compensation arrangements with providers, and efficient appeal of coverage decisions. (c) PATIENT-PHYSICIAN RELATIONSHIP. Provides that the statewide rural health care system is intended to preserve significant traditional and ethical relationships between a patient and the patient's health care provider by ensuring that medical management does not intrude on the delivery of quality patient care, the process of making health care decisions remains a matter between a patient and the patient's health care provider, and nothing in the system will place a health care provider in an adverse relationship with a patient. (d) PUBLIC HEALTH AND PREVENTION. Provides that the statewide rural health care system is intended to use incentives to promote healthy communities and individuals by using a public health model that focuses on health promotion, illness prevention, patient self-care education, and incentives that encourage positive health behavior. (e) CREDENTIALS AND PEER REVIEW. Provides that to ensure that enrollees will receive quality health care, the statewide rural health care system is intended to focus on processes for obtaining credentials and performing peer review that take into consideration the unique nature of rural communities and that track processes required under federal and state law. Provides that local physicians and hospitals are intended to retain responsibility for these processes, which are not intended to exclude otherwise qualified practitioners from participating in the system. (f) QUALITY IMPROVEMENT AND MANAGEMENT. Provides that the statewide rural health care system is intended to utilize standard guidelines established by the National Committee on Quality Assurance and other recognized accrediting organizations to ensure that the program achieves its objectives of providing quality patient care and to emphasize establishing benchmarks to measure program outcomes that will be made available to the public through proper reporting procedures. SECTION 2. Amends Article 20C.02, Insurance Code, as follows: (a) Creates from existing text. Provides that the rules adopted by the commissioner of insurance (commissioner) used to designate rural areas are subject to Subsection (b). (b) Requires the commissioner, in designating rural areas under Subsection (a), to consider any area that is delineated as an urbanized area by the federal census bureau and: _is contiguous with and not more than 10 miles away from a rural area described by Subsection (a); _is sparsely populated, compared to areas within a 10-mile radius that are delineated as urbanized areas by the federal census bureau; _has not increased in population in any single calendar year in the seven years before the commissioner makes the designation; and _in which emergency or primary care services are limited or unavailable in accordance with network access standards imposed by the commissioner under Chapter 20A (Texas Health Maintenance Organization Act), V.T.I.C., and in which those services would be made materially more accessible by allowing access to care in a contiguous area that is eligible to participate in the system. SECTION 3. Amends Article 20C.03, Insurance Code, to provide that the system is established to arrange for or provide health care services, rather than health care services on a prepaid basis, to enrollees who reside in rural areas. SECTION 4. Amends Article 20C.04, Insurance Code, to provide that the system, if it arranges for or provides health care services to enrollees in exchange for a predetermined payment per enrollee on a prepaid basis, must obtain a certificate of authority under, and meet each requirement imposed by, the Texas Health Maintenance Organization Act (Chapter 20A, Insurance Code). Authorizes the commissioner, by rule, if the system seeks a certificate of authority, to provide exceptions to the application of provisions of the Texas Health Maintenance Organization Act relating to mileage, distance, and network adequacy and scope. Makes conforming changes. SECTION 5. Amends Article 20C.07(a), Insurance Code, to provide that the members of the board of the statewide rural health care system (board) serve staggered six-year terms, with the terms of six members expiring December 1 of each even-numbered year, rather than February 1 of each odd numbered year. SECTION 6. Amends Article 20C.08(f), Insurance Code, to authorize the board to appoint an advisory committee to represent health care services, including representatives of rural, urban, and educational groups and organizations. Requires the advisory committee to meet at the will of the board and advise the board on any matters as directed by the board. Deletes language referring to the required composition of the advisory committee. SECTION 7. Amends Article 20C.14, Insurance Code, as follows: Art. 20C.14. New Title: MANDATED PROVIDER. Removes the exception to the provision requiring the state to award to the system at least one of any state managed care contracts awarded to provide health care services to beneficiaries of the Medical Assistance Program under Chapter 32, Human Resources Code, in rural areas within the territorial jurisdiction of the participating providers. Conditions the requirement that the system be reimbursed by the Medicaid contracting agency at the state-defined capitation rate on the extent to which the system operates under a certificate of authority. Makes conforming changes. SECTION 8. Effective date: September 1, 1999. Provides that the term of a member of the board of directors of the statewide rural health care system appointed before the effective date of this Act expires December 1 of the year before the year the term was to expire under Chapter 20C, Insurance Code, as that chapter existed before amendment by this Act. SECTION 9. Emergency clause.