By Janek, Siebert, Reyna of Bexar, et al. H.B. No. 1498
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the availability of health benefit coverage options for
1-3 health maintenance organization eligible enrollees.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Subchapter A, Chapter 26, Insurance Code, is
1-6 amended by adding Article 26.09 to read as follows:
1-7 Art. 26.09. AVAILABILITY OF HEALTH BENEFIT COVERAGE OPTIONS.
1-8 (a) In this article:
1-9 (1) "Non-network plan" means health benefit coverage
1-10 that provides an enrollee an opportunity to obtain health care
1-11 services through a health delivery system other than a health
1-12 maintenance organization delivery network, as defined by Section 2,
1-13 Texas Health Maintenance Organization Act (Article 20A.02, Vernon's
1-14 Texas Insurance Code).
1-15 (2) "Point-of-service plan" means an arrangement under
1-16 which an enrollee may choose to obtain benefits and services, or
1-17 both benefits and services, through either a health maintenance
1-18 organization delivery network, including a limited provider
1-19 network, or through a non-network delivery system outside the
1-20 health maintenance organization's health care delivery network,
1-21 including a limited provider network, and that are administered
1-22 through an indemnity benefit arrangement for the cost of health
1-23 care services.
1-24 (3) "Preferred provider benefit plan" means an
2-1 insurance policy issued and licensed under Article 3.70-3C of this
2-2 code, as added by Chapter 1024, Acts of the 75th Legislature,
2-3 Regular Session, 1997.
2-4 (b) If the only health benefit coverage offered under an
2-5 employer's health benefit plan is a network-based delivery system
2-6 of coverage offered by one or more health maintenance
2-7 organizations, each health maintenance organization offering
2-8 coverage under the employer's health benefit plan must offer to all
2-9 eligible employees the opportunity to obtain health benefit
2-10 coverage through a non-network plan at the time of enrollment and
2-11 at least annually, unless all health maintenance organizations
2-12 offering coverage under the employer's health benefit plan enter
2-13 into an agreement designating one or more of those health
2-14 maintenance organizations to offer that coverage. The coverage
2-15 required under this subsection may be provided through a
2-16 point-of-service contract, a preferred provider benefit plan, or
2-17 any coverage arrangement that allows an enrollee to access services
2-18 outside the health maintenance organization's or limited provider
2-19 network's delivery network.
2-20 (c) The premium for coverage required to be offered under
2-21 this article shall be based on the actuarial value of that coverage
2-22 and may be different than the premium for the health maintenance
2-23 organization coverage.
2-24 (d) Different cost-sharing provisions may be imposed for a
2-25 point-of-service contract offered under this article and may be
2-26 higher than cost-sharing provisions for in-network health
2-27 maintenance organization coverage. For enrollees in limited
3-1 provider networks, higher cost sharing may be imposed only when
3-2 obtaining benefits or services outside the health maintenance
3-3 organization delivery network.
3-4 (e) Any additional costs for the non-network plan are the
3-5 responsibility of the employee who chooses the non-network plan,
3-6 and the employer may impose a reasonable administrative cost for
3-7 providing the non-network plan option.
3-8 (f) This article does not apply to a small employer health
3-9 benefit plan.
3-10 SECTION 2. Subchapter F, Chapter 3, Insurance Code, is
3-11 amended by adding Article 3.64 to read as follows:
3-12 Art. 3.64. CONTRACTS BETWEEN HEALTH MAINTENANCE
3-13 ORGANIZATIONS AND INSURERS. (a) In this article:
3-14 (1) "Blended contract" means a single document,
3-15 including a single contract policy, certificate, or evidence of
3-16 coverage, that provides a combination of indemnity and health
3-17 maintenance organization benefits.
3-18 (2) "Health maintenance organization" has the meaning
3-19 assigned by Section 2, Texas Health Maintenance Organization Act
3-20 (Article 20A.02, Vernon's Texas Insurance Code).
3-21 (3) "Insurance carrier" means an insurance company,
3-22 group hospital service corporation, association, or organization
3-23 authorized to do business in this state under this chapter or
3-24 Chapter 8, 10, 11, 12, 13, 14, 15, 18, 19, 20, or 22 of this code.
3-25 (4) "Point-of-service plan" means an arrangement under
3-26 which:
3-27 (A) an enrollee may choose to obtain benefits or
4-1 services, or both benefits and services, through either a health
4-2 maintenance organization delivery network, including a limited
4-3 provider network, or through a non-network delivery system outside
4-4 the health maintenance organization's health care delivery network,
4-5 including a limited provider network, and that are administered
4-6 through an indemnity benefit arrangement for the cost of health
4-7 care services; or
4-8 (B) indemnity benefits for the cost of the
4-9 health care services may be provided by an insurer or group
4-10 hospital service corporation in conjunction with network benefits
4-11 arranged or provided by a health maintenance organization.
4-12 (b) An insurance carrier may contract with a health
4-13 maintenance organization to provide benefits under a
4-14 point-of-service plan, including optional coverage for out-of-area
4-15 services or out-of-network care.
4-16 (c) An insurance carrier and a health maintenance
4-17 organization may offer a blended contract if indemnity benefits are
4-18 combined with health maintenance organization benefits. The use of
4-19 a blended contract is limited to point-of-service arrangements
4-20 between an insurance carrier and a health maintenance organization.
4-21 (d) A blended contract delivered, issued, or used in this
4-22 state is subject to and must be filed with the department for
4-23 approval as provided by Article 3.42 of this code and Section
4-24 9(a)(5), Texas Health Maintenance Organization Act (Article 20A.09,
4-25 Vernon's Texas Insurance Code).
4-26 (e) Indemnity benefits and services provided under a
4-27 point-of-service plan may be limited to those services as defined
5-1 by the blended contract and may be subject to different
5-2 cost-sharing provisions. The cost-sharing provisions for the
5-3 indemnity benefits may be higher than cost-sharing provisions for
5-4 in-network health maintenance organization coverage. For enrollees
5-5 in limited provider networks, higher cost sharing may be imposed
5-6 only when obtaining benefits or services outside the health
5-7 maintenance organization delivery network.
5-8 (f) The commissioner may adopt rules to implement this
5-9 article.
5-10 SECTION 3. Section 2, Texas Health Maintenance Organization
5-11 Act (Article 20A.02, Vernon's Texas Insurance Code), is amended by
5-12 amending Subsection (i) and by adding Subsections (aa) and (bb) to
5-13 read as follows:
5-14 (i) "Evidence of coverage" means any certificate, agreement,
5-15 or contract, including a blended contract, issued to an enrollee
5-16 setting out the coverage to which the enrollee is entitled.
5-17 (aa) "Blended contract" means a single document, including a
5-18 single contract policy, certificate, or evidence of coverage, that
5-19 provides a combination of indemnity and health maintenance
5-20 organization benefits.
5-21 (bb) "Point-of-service plan" means an arrangement under
5-22 which:
5-23 (1) an enrollee may choose to obtain benefits or
5-24 services, or both benefits and services, through either a health
5-25 maintenance organization delivery network, including a limited
5-26 provider network, or through a non-network delivery system outside
5-27 the health maintenance organization's health care delivery network,
6-1 including a limited provider network, and that are administered
6-2 through an indemnity benefit arrangement for the cost of health
6-3 care services; or
6-4 (2) indemnity benefits for the cost of the health care
6-5 services may be provided by an insurer or group hospital service
6-6 corporation in conjunction with corresponding benefits arranged or
6-7 provided by a health maintenance organization or indemnity benefits
6-8 for the cost of the health care services provided by a health
6-9 maintenance organization through a point-of-service rider as
6-10 provided by Section (6)(a)(6)(D) of this Act in conjunction with
6-11 corresponding benefits arranged or provided by a health maintenance
6-12 organization.
6-13 SECTION 4. Section 6, Texas Health Maintenance Organization
6-14 Act (Article 20A.06, Vernon's Texas Insurance Code), is amended by
6-15 amending Subsection (a) and adding Subsection (c) to read as
6-16 follows:
6-17 (a) The powers of a health maintenance organization include,
6-18 but are not limited to, the following:
6-19 (1) the purchase, lease, construction, renovation,
6-20 operation, or maintenance of hospitals, medical facilities, or
6-21 both, and ancillary equipment and such property as may reasonably
6-22 be required for its principal office or for such other purposes as
6-23 may be necessary in the transaction of the business of the health
6-24 maintenance organization;
6-25 (2) the making of loans to a medical group, under an
6-26 independent contract with it in furtherance of its program, or
6-27 corporations under its control, for the purpose of acquiring or
7-1 constructing medical facilities and hospitals, or in the
7-2 furtherance of a program providing health care services to
7-3 enrollees;
7-4 (3) the furnishing of or arranging for medical care
7-5 services only through other health maintenance organizations or
7-6 physicians or groups of physicians who have independent contracts
7-7 with the health maintenance organizations; the furnishing of or
7-8 arranging for the delivery of health care services only through
7-9 other health maintenance organizations or providers or groups of
7-10 providers who are under contract with or employed by the health
7-11 maintenance organization or through other health maintenance
7-12 organizations or physicians or providers who have contracted for
7-13 health care services with those other health maintenance
7-14 organizations or physicians or providers, except for the furnishing
7-15 of or authorization for emergency services, services by referral,
7-16 and services to be provided outside of the service area as approved
7-17 by the commissioner; provided, however, that a health maintenance
7-18 organization is not authorized to employ or contract with other
7-19 health maintenance organizations or physicians or providers in any
7-20 manner which is prohibited by any licensing law of this state under
7-21 which such health maintenance organizations or physicians or
7-22 providers are licensed; however, if a hospital, facility, agency,
7-23 or supplier is certified by the Medicare program, Title XVIII of
7-24 the Social Security Act (42 U.S.C. Section 1395 et seq.), or
7-25 accredited by the Joint Commission on Accreditation of Healthcare
7-26 Organizations or another national accrediting body, the health
7-27 maintenance organization shall be required to accept such
8-1 certification or accreditation;
8-2 (4) the contracting with any person for the
8-3 performance on its behalf of certain functions such as marketing,
8-4 enrollment, and administration;
8-5 (5) the contracting with an insurance company licensed
8-6 in this state, or with a group hospital service corporation
8-7 authorized to do business in the state, for the provision of
8-8 insurance, reinsurance, indemnity, or reimbursement against the
8-9 cost of health care and medical care services provided by the
8-10 health maintenance organization;
8-11 (6) the offering of:
8-12 (A) indemnity benefits covering out-of-area
8-13 emergency services; [and]
8-14 (B) indemnity benefits in addition to those
8-15 relating to out-of-area and emergency services, provided through
8-16 insurers or group hospital service corporations;
8-17 (C) a point-of-service plan under Article 3.64,
8-18 Insurance Code; or
8-19 (D) a point-of-service rider under Subsection
8-20 (c) of this section;
8-21 (7) receiving and accepting from government or private
8-22 agencies payments covering all or part of the cost of the services
8-23 provided or arranged for by the organization;
8-24 (8) all powers given to corporations (including
8-25 professional corporations and associations), partnerships, and
8-26 associations pursuant to their organizational documents which are
8-27 not in conflict with provisions of this Act, or other applicable
9-1 law.
9-2 (c) A health maintenance organization may offer a
9-3 point-of-service rider for out-of-network coverage without
9-4 obtaining a separate insurance carrier license if the expenses
9-5 incurred under the point-of-service rider do not exceed 10 percent
9-6 of the total medical and hospital expenses incurred for all health
9-7 plan products sold. If the expenses incurred by a health
9-8 maintenance organization under a point-of-service rider exceed 10
9-9 percent of the total medical and hospital expenses incurred for all
9-10 health plan products sold, the health maintenance organization
9-11 shall cease issuing new point-of-service riders until those
9-12 expenses fall below 10 percent or until the health maintenance
9-13 organization obtains an insurance carrier license under this Act.
9-14 Indemnity benefits and services provided under a point-of-service
9-15 rider may be limited to those services defined in the evidence of
9-16 coverage and may be subject to different cost-sharing provisions.
9-17 The cost-sharing provisions for indemnity benefits may be higher
9-18 than the cost-sharing provisions for in-network health maintenance
9-19 organization coverage. For enrollees in limited provider networks,
9-20 higher cost sharing may be imposed only when obtaining benefits or
9-21 services outside the health maintenance organization delivery
9-22 network. A health maintenance organization that issues a
9-23 point-of-service rider under this section must meet the net worth
9-24 requirements promulgated by the commissioner based on the actuarial
9-25 relation of the amount of insurance risk assumed through the
9-26 issuance of the point-of-service rider in relation to the amount of
9-27 solvency and reserve requirements already required of the health
10-1 maintenance organization.
10-2 SECTION 5. This Act takes effect September 1, 1999, and
10-3 applies only to an evidence of coverage for a health benefit plan
10-4 that is delivered, issued for delivery, or renewed on or after
10-5 January 1, 2000. An evidence of coverage for a health benefit plan
10-6 that is delivered, issued for delivery, or renewed before January
10-7 1, 2000, is governed by the law as it existed immediately before
10-8 the effective date of this Act, and that law is continued in effect
10-9 for this purpose.
10-10 SECTION 6. The importance of this legislation and the
10-11 crowded condition of the calendars in both houses create an
10-12 emergency and an imperative public necessity that the
10-13 constitutional rule requiring bills to be read on three several
10-14 days in each house be suspended, and this rule is hereby suspended.