76R10781 AJA-F
By Janek, Siebert, Reyna of Bexar, et al. H.B. No. 1498
Substitute the following for H.B. No. 1498:
By Seaman C.S.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 or through a non-network delivery
1-19 system outside the health maintenance organization's health care
1-20 delivery network, and that are administered through an indemnity
1-21 benefit arrangement for the cost of health care services.
1-22 (3) "Preferred provider benefit plan" means an
1-23 insurance policy issued and licensed under Article 3.70-3C of this
1-24 code.
2-1 (b) If the only health benefit coverage offered under an
2-2 employer's health benefit plan is a network-based delivery system
2-3 of coverage offered by one or more health maintenance
2-4 organizations, each health maintenance organization offering
2-5 coverage under the employer's health benefit plan must offer to all
2-6 eligible employees the opportunity to obtain health benefit
2-7 coverage through a non-network plan at the time of enrollment and
2-8 at least annually, unless all health maintenance organizations
2-9 offering coverage under the employer's health benefit plan enter
2-10 into an agreement designating one or more of those health
2-11 maintenance organizations to offer that coverage. The coverage
2-12 required under this subsection may be provided through a
2-13 point-of-service contract, a preferred provider benefit plan, or
2-14 any coverage arrangement that allows an enrollee to access services
2-15 outside the health maintenance organization's delivery network.
2-16 (c) The premium for coverage required to be offered under
2-17 this article shall be based on the actuarial value of that coverage
2-18 and may be different than the premium for the health maintenance
2-19 organization coverage.
2-20 (d) Different cost-sharing provisions may be imposed for a
2-21 point-of-service contract offered under this article and may be
2-22 higher than cost-sharing provisions for in-network health
2-23 maintenance organization coverage.
2-24 (e) Any additional costs for the non-network plan are the
2-25 responsibility of the employee who chooses the non-network plan,
2-26 and the employer may impose a reasonable administrative cost for
2-27 providing the non-network plan option.
3-1 (f) This article does not apply to a small employer health
3-2 benefit plan.
3-3 SECTION 2. Subchapter F, Chapter 3, Insurance Code, is
3-4 amended by adding Article 3.64 to read as follows:
3-5 Art. 3.64. CONTRACTS BETWEEN HEALTH MAINTENANCE
3-6 ORGANIZATIONS AND INSURERS. (a) In this article:
3-7 (1) "Blended contract" means a single document,
3-8 including a single contract policy, certificate, or evidence of
3-9 coverage, that provides a combination of indemnity and health
3-10 maintenance organization benefits.
3-11 (2) "Health maintenance organization" has the meaning
3-12 assigned by Section 2, Texas Health Maintenance Organization Act
3-13 (Article 20A.02, Vernon's Texas Insurance Code).
3-14 (3) "Insurance carrier" means an insurance company,
3-15 group hospital service corporation, association, or organization
3-16 authorized to do business in this state under this chapter or
3-17 Chapter 8, 10, 11, 12, 13, 14, 15, 18, 19, 20, or 22 of this code.
3-18 (4) "Point-of-service plan" means an arrangement under
3-19 which:
3-20 (A) an enrollee may choose to obtain benefits or
3-21 services, or both benefits and services, through either a health
3-22 maintenance organization delivery network or through a non-network
3-23 delivery system outside the health maintenance organization's
3-24 health care delivery network, and that are administered through an
3-25 indemnity benefit arrangement for the cost of health care services;
3-26 or
3-27 (B) indemnity benefits for the cost of the
4-1 health care services may be provided by an insurer or group
4-2 hospital service corporation in conjunction with network benefits
4-3 arranged or provided by a health maintenance organization.
4-4 (b) An insurance carrier may contract with a health
4-5 maintenance organization to provide benefits under a
4-6 point-of-service plan, including optional coverage for out-of-area
4-7 services or out-of-network care.
4-8 (c) An insurance carrier and a health maintenance
4-9 organization may offer a blended contract if indemnity benefits are
4-10 combined with health maintenance organization benefits. The use of
4-11 a blended contract is limited to point-of-service arrangements
4-12 between an insurance carrier and a health maintenance organization.
4-13 (d) A blended contract delivered, issued, or used in this
4-14 state is subject to and must be filed with the department for
4-15 approval as provided by Article 3.42 of this code and Article
4-16 20A.09(a)(5).
4-17 (e) Indemnity benefits and services provided under a
4-18 point-of-service plan may be limited to those services as defined
4-19 by the blended contract and may be subject to different
4-20 cost-sharing provisions. The cost-sharing provisions for the
4-21 indemnity benefits may be higher than cost-sharing provisions for
4-22 in-network health maintenance organization coverage.
4-23 (f) The commissioner may adopt rules to implement this
4-24 article.
4-25 SECTION 3. Section 2, Texas Health Maintenance Organization
4-26 Act (Article 20A.02, Vernon's Texas Insurance Code), is amended by
4-27 amending Subsection (i) and by adding Subsections (aa) and (bb) to
5-1 read as follows:
5-2 (i) "Evidence of coverage" means any certificate, agreement,
5-3 or contract, including a blended contract, issued to an enrollee
5-4 setting out the coverage to which the enrollee is entitled.
5-5 (aa) "Blended contract" means a single document, including a
5-6 single contract policy, certificate, or evidence of coverage, that
5-7 provides a combination of indemnity and health maintenance
5-8 organization benefits.
5-9 (bb) "Point-of-service plan" means an arrangement under
5-10 which:
5-11 (1) an enrollee may choose to obtain benefits or
5-12 services, or both benefits and services, through either a health
5-13 maintenance organization delivery network or through a non-network
5-14 delivery system outside the health maintenance organization's
5-15 health care delivery network, and that are administered through an
5-16 indemnity benefit arrangement for the cost of health care services;
5-17 or
5-18 (2) indemnity benefits for the cost of the health care
5-19 services may be provided by an insurer or group hospital service
5-20 corporation in conjunction with corresponding benefits arranged or
5-21 provided by a health maintenance organization or indemnity benefits
5-22 for the cost of the health care services provided by a health
5-23 maintenance organization through a point-of-service rider as
5-24 provided by Article 20A.06(a)(6)(D) in conjunction with
5-25 corresponding benefits arranged or provided by a health maintenance
5-26 organization.
5-27 SECTION 4. Section 6, Texas Health Maintenance Organization
6-1 Act (Article 20A.06, Vernon's Texas Insurance Code), is amended by
6-2 amending Subsection (a) and adding Subsection (c) to read as
6-3 follows:
6-4 (a) The powers of a health maintenance organization include,
6-5 but are not limited to, the following:
6-6 (1) the purchase, lease, construction, renovation,
6-7 operation, or maintenance of hospitals, medical facilities, or
6-8 both, and ancillary equipment and such property as may reasonably
6-9 be required for its principal office or for such other purposes as
6-10 may be necessary in the transaction of the business of the health
6-11 maintenance organization;
6-12 (2) the making of loans to a medical group, under an
6-13 independent contract with it in furtherance of its program, or
6-14 corporations under its control, for the purpose of acquiring or
6-15 constructing medical facilities and hospitals, or in the
6-16 furtherance of a program providing health care services to
6-17 enrollees;
6-18 (3) the furnishing of or arranging for medical care
6-19 services only through other health maintenance organizations or
6-20 physicians or groups of physicians who have independent contracts
6-21 with the health maintenance organizations; the furnishing of or
6-22 arranging for the delivery of health care services only through
6-23 other health maintenance organizations or providers or groups of
6-24 providers who are under contract with or employed by the health
6-25 maintenance organization or through other health maintenance
6-26 organizations or physicians or providers who have contracted for
6-27 health care services with those other health maintenance
7-1 organizations or physicians or providers, except for the furnishing
7-2 of or authorization for emergency services, services by referral,
7-3 and services to be provided outside of the service area as approved
7-4 by the commissioner; provided, however, that a health maintenance
7-5 organization is not authorized to employ or contract with other
7-6 health maintenance organizations or physicians or providers in any
7-7 manner which is prohibited by any licensing law of this state under
7-8 which such health maintenance organizations or physicians or
7-9 providers are licensed; however, if a hospital, facility, agency,
7-10 or supplier is certified by the Medicare program, Title XVIII of
7-11 the Social Security Act (42 U.S.C. Section 1395 et seq.), or
7-12 accredited by the Joint Commission on Accreditation of Healthcare
7-13 Organizations or another national accrediting body, the health
7-14 maintenance organization shall be required to accept such
7-15 certification or accreditation;
7-16 (4) the contracting with any person for the
7-17 performance on its behalf of certain functions such as marketing,
7-18 enrollment, and administration;
7-19 (5) the contracting with an insurance company licensed
7-20 in this state, or with a group hospital service corporation
7-21 authorized to do business in the state, for the provision of
7-22 insurance, reinsurance, indemnity, or reimbursement against the
7-23 cost of health care and medical care services provided by the
7-24 health maintenance organization;
7-25 (6) the offering of:
7-26 (A) indemnity benefits covering out-of-area
7-27 emergency services; [and]
8-1 (B) indemnity benefits in addition to those
8-2 relating to out-of-area and emergency services, provided through
8-3 insurers or group hospital service corporations;
8-4 (C) a point-of-service plan under Article 3.64
8-5 of this code; or
8-6 (D) a point-of-service rider under Subsection
8-7 (c) of this article;
8-8 (7) receiving and accepting from government or private
8-9 agencies payments covering all or part of the cost of the services
8-10 provided or arranged for by the organization;
8-11 (8) all powers given to corporations (including
8-12 professional corporations and associations), partnerships, and
8-13 associations pursuant to their organizational documents which are
8-14 not in conflict with provisions of this Act, or other applicable
8-15 law.
8-16 (c) A health maintenance organization may offer a
8-17 point-of-service rider for out-of-network coverage without
8-18 obtaining a separate insurance carrier license if the expenses
8-19 incurred under the point-of-service rider do not exceed 10 percent
8-20 of the total medical and hospital expenses incurred for all health
8-21 plan products sold. If the expenses incurred by a health
8-22 maintenance organization under a point-of-service rider exceed 10
8-23 percent of the total medical and hospital expenses incurred for all
8-24 health plan products sold, the health maintenance organization
8-25 shall cease issuing new point-of-service riders until those
8-26 expenses fall below 10 percent or until the health maintenance
8-27 organization obtains an insurance carrier license under this code.
9-1 Indemnity benefits and services provided under a point-of-service
9-2 rider may be limited to those services defined in the evidence of
9-3 coverage and may be subject to different cost-sharing provisions.
9-4 The cost-sharing provisions for indemnity benefits may be higher
9-5 than the cost-sharing provisions for in-network health maintenance
9-6 organization coverage. A health maintenance organization that
9-7 issues a point-of-service rider under this article must meet the
9-8 net worth requirements promulgated by the commissioner based on the
9-9 actuarial relation of the amount of insurance risk assumed through
9-10 the issuance of the point-of-service rider in relation to the
9-11 amount of solvency and reserve requirements already required of the
9-12 health maintenance organization.
9-13 SECTION 5. This Act takes effect September 1, 1999, and
9-14 applies only to an evidence of coverage for a health benefit plan
9-15 that is delivered, issued for delivery, or renewed on or after
9-16 January 1, 2000. An evidence of coverage for a health benefit plan
9-17 that is delivered, issued for delivery, or renewed before January
9-18 1, 2000, is governed by the law as it existed immediately before
9-19 the effective date of this Act, and that law is continued in effect
9-20 for this purpose.
9-21 SECTION 6. The importance of this legislation and the
9-22 crowded condition of the calendars in both houses create an
9-23 emergency and an imperative public necessity that the
9-24 constitutional rule requiring bills to be read on three several
9-25 days in each house be suspended, and this rule is hereby suspended.