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:
3-9 (1) a small employer health benefit plan; or
3-10 (2) a group model health maintenance organization that
3-11 is a nonprofit, state-certified health maintenance organization
3-12 that provides the majority of its professional services through a
3-13 single group medical practice that is governed by a board composed
3-14 entirely of physicians and that educates medical students or
3-15 resident physicians through a contract with the medical school
3-16 component of a Texas state-supported college or university
3-17 accredited by the Accrediting Council on Graduate Medical Education
3-18 or the American Osteopathic Association.
3-19 SECTION 2. Subchapter F, Chapter 3, Insurance Code, is
3-20 amended by adding Article 3.64 to read as follows:
3-21 Art. 3.64. CONTRACTS BETWEEN HEALTH MAINTENANCE
3-22 ORGANIZATIONS AND INSURERS. (a) In this article:
3-23 (1) "Blended contract" means a single document,
3-24 including a single contract policy, certificate, or evidence of
3-25 coverage, that provides a combination of indemnity and health
3-26 maintenance organization benefits.
3-27 (2) "Health maintenance organization" has the meaning
4-1 assigned by Section 2, Texas Health Maintenance Organization Act
4-2 (Article 20A.02, Vernon's Texas Insurance Code).
4-3 (3) "Insurance carrier" means an insurance company,
4-4 group hospital service corporation, association, or organization
4-5 authorized to do business in this state under this chapter or
4-6 Chapter 8, 10, 11, 12, 13, 14, 15, 18, 19, 20, or 22 of this code.
4-7 (4) "Point-of-service plan" means an arrangement under
4-8 which:
4-9 (A) an enrollee may choose to obtain benefits or
4-10 services, or both benefits and services, through either a health
4-11 maintenance organization delivery network, including a limited
4-12 provider network, or through a non-network delivery system outside
4-13 the health maintenance organization's health care delivery network,
4-14 including a limited provider network, and that are administered
4-15 through an indemnity benefit arrangement for the cost of health
4-16 care services; or
4-17 (B) indemnity benefits for the cost of the
4-18 health care services may be provided by an insurer or group
4-19 hospital service corporation in conjunction with network benefits
4-20 arranged or provided by a health maintenance organization.
4-21 (b) An insurance carrier may contract with a health
4-22 maintenance organization to provide benefits under a
4-23 point-of-service plan, including optional coverage for out-of-area
4-24 services or out-of-network care.
4-25 (c) An insurance carrier and a health maintenance
4-26 organization may offer a blended contract if indemnity benefits are
4-27 combined with health maintenance organization benefits. The use of
5-1 a blended contract is limited to point-of-service arrangements
5-2 between an insurance carrier and a health maintenance organization.
5-3 (d) A blended contract delivered, issued, or used in this
5-4 state is subject to and must be filed with the department for
5-5 approval as provided by Article 3.42 of this code and Section
5-6 9(a)(5), Texas Health Maintenance Organization Act (Article 20A.09,
5-7 Vernon's Texas Insurance Code).
5-8 (e) Indemnity benefits and services provided under a
5-9 point-of-service plan may be limited to those services as defined
5-10 by the blended contract and may be subject to different
5-11 cost-sharing provisions. The cost-sharing provisions for the
5-12 indemnity benefits may be higher than cost-sharing provisions for
5-13 in-network health maintenance organization coverage. For enrollees
5-14 in limited provider networks, higher cost sharing may be imposed
5-15 only when obtaining benefits or services outside the health
5-16 maintenance organization delivery network.
5-17 (f) The commissioner may adopt rules to implement this
5-18 article.
5-19 SECTION 3. Section 2, Texas Health Maintenance Organization
5-20 Act (Article 20A.02, Vernon's Texas Insurance Code), is amended by
5-21 amending Subsection (i) and by adding Subsections (aa) and (bb) to
5-22 read as follows:
5-23 (i) "Evidence of coverage" means any certificate, agreement,
5-24 or contract, including a blended contract, issued to an enrollee
5-25 setting out the coverage to which the enrollee is entitled.
5-26 (aa) "Blended contract" means a single document, including a
5-27 single contract policy, certificate, or evidence of coverage, that
6-1 provides a combination of indemnity and health maintenance
6-2 organization benefits.
6-3 (bb) "Point-of-service plan" means an arrangement under
6-4 which:
6-5 (1) an enrollee may choose to obtain benefits or
6-6 services, or both benefits and services, through either a health
6-7 maintenance organization delivery network, including a limited
6-8 provider network, or through a non-network delivery system outside
6-9 the health maintenance organization's health care delivery network,
6-10 including a limited provider network, and that are administered
6-11 through an indemnity benefit arrangement for the cost of health
6-12 care services; or
6-13 (2) indemnity benefits for the cost of the health care
6-14 services may be provided by an insurer or group hospital service
6-15 corporation in conjunction with corresponding benefits arranged or
6-16 provided by a health maintenance organization or indemnity benefits
6-17 for the cost of the health care services provided by a health
6-18 maintenance organization through a point-of-service rider as
6-19 provided by Section 6(a)(6)(D) of this Act in conjunction with
6-20 corresponding benefits arranged or provided by a health maintenance
6-21 organization.
6-22 SECTION 4. Section 6, Texas Health Maintenance Organization
6-23 Act (Article 20A.06, Vernon's Texas Insurance Code), is amended by
6-24 amending Subsection (a) and adding Subsection (c) to read as
6-25 follows:
6-26 (a) The powers of a health maintenance organization include,
6-27 but are not limited to, the following:
7-1 (1) the purchase, lease, construction, renovation,
7-2 operation, or maintenance of hospitals, medical facilities, or
7-3 both, and ancillary equipment and such property as may reasonably
7-4 be required for its principal office or for such other purposes as
7-5 may be necessary in the transaction of the business of the health
7-6 maintenance organization;
7-7 (2) the making of loans to a medical group, under an
7-8 independent contract with it in furtherance of its program, or
7-9 corporations under its control, for the purpose of acquiring or
7-10 constructing medical facilities and hospitals, or in the
7-11 furtherance of a program providing health care services to
7-12 enrollees;
7-13 (3) the furnishing of or arranging for medical care
7-14 services only through other health maintenance organizations or
7-15 physicians or groups of physicians who have independent contracts
7-16 with the health maintenance organizations; the furnishing of or
7-17 arranging for the delivery of health care services only through
7-18 other health maintenance organizations or providers or groups of
7-19 providers who are under contract with or employed by the health
7-20 maintenance organization or through other health maintenance
7-21 organizations or physicians or providers who have contracted for
7-22 health care services with those other health maintenance
7-23 organizations or physicians or providers, except for the furnishing
7-24 of or authorization for emergency services, services by referral,
7-25 and services to be provided outside of the service area as approved
7-26 by the commissioner; provided, however, that a health maintenance
7-27 organization is not authorized to employ or contract with other
8-1 health maintenance organizations or physicians or providers in any
8-2 manner which is prohibited by any licensing law of this state under
8-3 which such health maintenance organizations or physicians or
8-4 providers are licensed; however, if a hospital, facility, agency,
8-5 or supplier is certified by the Medicare program, Title XVIII of
8-6 the Social Security Act (42 U.S.C. Section 1395 et seq.), or
8-7 accredited by the Joint Commission on Accreditation of Healthcare
8-8 Organizations or another national accrediting body, the health
8-9 maintenance organization shall be required to accept such
8-10 certification or accreditation;
8-11 (4) the contracting with any person for the
8-12 performance on its behalf of certain functions such as marketing,
8-13 enrollment, and administration;
8-14 (5) the contracting with an insurance company licensed
8-15 in this state, or with a group hospital service corporation
8-16 authorized to do business in the state, for the provision of
8-17 insurance, reinsurance, indemnity, or reimbursement against the
8-18 cost of health care and medical care services provided by the
8-19 health maintenance organization;
8-20 (6) the offering of:
8-21 (A) indemnity benefits covering out-of-area
8-22 emergency services; [and]
8-23 (B) indemnity benefits in addition to those
8-24 relating to out-of-area and emergency services, provided through
8-25 insurers or group hospital service corporations;
8-26 (C) a point-of-service plan under Article 3.64,
8-27 Insurance Code; or
9-1 (D) a point-of-service rider under Subsection
9-2 (c) of this section;
9-3 (7) receiving and accepting from government or private
9-4 agencies payments covering all or part of the cost of the services
9-5 provided or arranged for by the organization;
9-6 (8) all powers given to corporations (including
9-7 professional corporations and associations), partnerships, and
9-8 associations pursuant to their organizational documents which are
9-9 not in conflict with provisions of this Act, or other applicable
9-10 law.
9-11 (c) A health maintenance organization may offer a
9-12 point-of-service rider for out-of-network coverage without
9-13 obtaining a separate insurance carrier license if the expenses
9-14 incurred under the point-of-service rider do not exceed 10 percent
9-15 of the total medical and hospital expenses incurred for all health
9-16 plan products sold. If the expenses incurred by a health
9-17 maintenance organization under a point-of-service rider exceed 10
9-18 percent of the total medical and hospital expenses incurred for all
9-19 health plan products sold, the health maintenance organization
9-20 shall cease issuing new point-of-service riders until those
9-21 expenses fall below 10 percent or until the health maintenance
9-22 organization obtains an insurance carrier license under this Act.
9-23 Indemnity benefits and services provided under a point-of-service
9-24 rider may be limited to those services defined in the evidence of
9-25 coverage and may be subject to different cost-sharing provisions.
9-26 The cost-sharing provisions for indemnity benefits may be higher
9-27 than the cost-sharing provisions for in-network health maintenance
10-1 organization coverage. For enrollees in limited provider networks,
10-2 higher cost sharing may be imposed only when obtaining benefits or
10-3 services outside the health maintenance organization delivery
10-4 network. A health maintenance organization that issues a
10-5 point-of-service rider under this section must meet the net worth
10-6 requirements promulgated by the commissioner based on the actuarial
10-7 relation of the amount of insurance risk assumed through the
10-8 issuance of the point-of-service rider in relation to the amount of
10-9 solvency and reserve requirements already required of the health
10-10 maintenance organization.
10-11 SECTION 5. This Act takes effect September 1, 1999, and
10-12 applies only to an evidence of coverage for a health benefit plan
10-13 that is delivered, issued for delivery, or renewed on or after
10-14 January 1, 2000. An evidence of coverage for a health benefit plan
10-15 that is delivered, issued for delivery, or renewed before January
10-16 1, 2000, is governed by the law as it existed immediately before
10-17 the effective date of this Act, and that law is continued in effect
10-18 for this purpose.
10-19 SECTION 6. The importance of this legislation and the
10-20 crowded condition of the calendars in both houses create an
10-21 emergency and an imperative public necessity that the
10-22 constitutional rule requiring bills to be read on three several
10-23 days in each house be suspended, and this rule is hereby suspended.
_______________________________ _______________________________
President of the Senate Speaker of the House
I certify that H.B. No. 1498 was passed by the House on May
5, 1999, by a non-record vote; that the House refused to concur in
Senate amendments to H.B. No. 1498 on May 22, 1999, and requested
the appointment of a conference committee to consider the
differences between the two houses; and that the House adopted the
conference committee report on H.B. No. 1498 on May 30, 1999, by a
non-record vote; and that the House adopted H.C.R. No. 318
authorizing certain corrections in H.B. No. 1498 on May 31, 1999,
by a non-record vote.
_______________________________
Chief Clerk of the House
I certify that H.B. No. 1498 was passed by the Senate, with
amendments, on May 20, 1999, by a viva-voce vote; at the request of
the House, the Senate appointed a conference committee to consider
the differences between the two houses; and that the Senate adopted
the conference committee report on H.B. No. 1498 on May 30, 1999,
by a viva-voce vote; and that the Senate adopted H.C.R. No. 318
authorizing certain corrections in H.B. No. 1498 on May 31, 1999,
by a viva-voce vote.
_______________________________
Secretary of the Senate
APPROVED: _____________________
Date
_____________________
Governor