1-1 By: Janek, et al. (Senate Sponsor - Sibley) H.B. No. 1498
1-2 (In the Senate - Received from the House May 6, 1999;
1-3 May 7, 1999, read first time and referred to Committee on Economic
1-4 Development; May 13, 1999, reported favorably by the following
1-5 vote: Yeas 4, Nays 0; May 13, 1999, sent to printer.)
1-6 A BILL TO BE ENTITLED
1-7 AN ACT
1-8 relating to the availability of health benefit coverage options for
1-9 health maintenance organization eligible enrollees.
1-10 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-11 SECTION 1. Subchapter A, Chapter 26, Insurance Code, is
1-12 amended by adding Article 26.09 to read as follows:
1-13 Art. 26.09. AVAILABILITY OF HEALTH BENEFIT COVERAGE OPTIONS.
1-14 (a) In this article:
1-15 (1) "Non-network plan" means health benefit coverage
1-16 that provides an enrollee an opportunity to obtain health care
1-17 services through a health delivery system other than a health
1-18 maintenance organization delivery network, as defined by Section 2,
1-19 Texas Health Maintenance Organization Act (Article 20A.02, Vernon's
1-20 Texas Insurance Code).
1-21 (2) "Point-of-service plan" means an arrangement under
1-22 which an enrollee may choose to obtain benefits and services, or
1-23 both benefits and services, through either a health maintenance
1-24 organization delivery network, including a limited provider
1-25 network, or through a non-network delivery system outside the
1-26 health maintenance organization's health care delivery network,
1-27 including a limited provider network, and that are administered
1-28 through an indemnity benefit arrangement for the cost of health
1-29 care services.
1-30 (3) "Preferred provider benefit plan" means an
1-31 insurance policy issued and licensed under Article 3.70-3C of this
1-32 code, as added by Chapter 1024, Acts of the 75th Legislature,
1-33 Regular Session, 1997.
1-34 (b) If the only health benefit coverage offered under an
1-35 employer's health benefit plan is a network-based delivery system
1-36 of coverage offered by one or more health maintenance
1-37 organizations, each health maintenance organization offering
1-38 coverage under the employer's health benefit plan must offer to all
1-39 eligible employees the opportunity to obtain health benefit
1-40 coverage through a non-network plan at the time of enrollment and
1-41 at least annually, unless all health maintenance organizations
1-42 offering coverage under the employer's health benefit plan enter
1-43 into an agreement designating one or more of those health
1-44 maintenance organizations to offer that coverage. The coverage
1-45 required under this subsection may be provided through a
1-46 point-of-service contract, a preferred provider benefit plan, or
1-47 any coverage arrangement that allows an enrollee to access services
1-48 outside the health maintenance organization's or limited provider
1-49 network's delivery network.
1-50 (c) The premium for coverage required to be offered under
1-51 this article shall be based on the actuarial value of that coverage
1-52 and may be different than the premium for the health maintenance
1-53 organization coverage.
1-54 (d) Different cost-sharing provisions may be imposed for a
1-55 point-of-service contract offered under this article and may be
1-56 higher than cost-sharing provisions for in-network health
1-57 maintenance organization coverage. For enrollees in limited
1-58 provider networks, higher cost sharing may be imposed only when
1-59 obtaining benefits or services outside the health maintenance
1-60 organization delivery network.
1-61 (e) Any additional costs for the non-network plan are the
1-62 responsibility of the employee who chooses the non-network plan,
1-63 and the employer may impose a reasonable administrative cost for
1-64 providing the non-network plan option.
2-1 (f) This article does not apply to a small employer health
2-2 benefit plan.
2-3 SECTION 2. Subchapter F, Chapter 3, Insurance Code, is
2-4 amended by adding Article 3.64 to read as follows:
2-5 Art. 3.64. CONTRACTS BETWEEN HEALTH MAINTENANCE
2-6 ORGANIZATIONS AND INSURERS. (a) In this article:
2-7 (1) "Blended contract" means a single document,
2-8 including a single contract policy, certificate, or evidence of
2-9 coverage, that provides a combination of indemnity and health
2-10 maintenance organization benefits.
2-11 (2) "Health maintenance organization" has the meaning
2-12 assigned by Section 2, Texas Health Maintenance Organization Act
2-13 (Article 20A.02, Vernon's Texas Insurance Code).
2-14 (3) "Insurance carrier" means an insurance company,
2-15 group hospital service corporation, association, or organization
2-16 authorized to do business in this state under this chapter or
2-17 Chapter 8, 10, 11, 12, 13, 14, 15, 18, 19, 20, or 22 of this code.
2-18 (4) "Point-of-service plan" means an arrangement under
2-19 which:
2-20 (A) an enrollee may choose to obtain benefits or
2-21 services, or both benefits and services, through either a health
2-22 maintenance organization delivery network, including a limited
2-23 provider network, or through a non-network delivery system outside
2-24 the health maintenance organization's health care delivery network,
2-25 including a limited provider network, and that are administered
2-26 through an indemnity benefit arrangement for the cost of health
2-27 care services; or
2-28 (B) indemnity benefits for the cost of the
2-29 health care services may be provided by an insurer or group
2-30 hospital service corporation in conjunction with network benefits
2-31 arranged or provided by a health maintenance organization.
2-32 (b) An insurance carrier may contract with a health
2-33 maintenance organization to provide benefits under a
2-34 point-of-service plan, including optional coverage for out-of-area
2-35 services or out-of-network care.
2-36 (c) An insurance carrier and a health maintenance
2-37 organization may offer a blended contract if indemnity benefits are
2-38 combined with health maintenance organization benefits. The use of
2-39 a blended contract is limited to point-of-service arrangements
2-40 between an insurance carrier and a health maintenance organization.
2-41 (d) A blended contract delivered, issued, or used in this
2-42 state is subject to and must be filed with the department for
2-43 approval as provided by Article 3.42 of this code and Section
2-44 9(a)(5), Texas Health Maintenance Organization Act (Article 20A.09,
2-45 Vernon's Texas Insurance Code).
2-46 (e) Indemnity benefits and services provided under a
2-47 point-of-service plan may be limited to those services as defined
2-48 by the blended contract and may be subject to different
2-49 cost-sharing provisions. The cost-sharing provisions for the
2-50 indemnity benefits may be higher than cost-sharing provisions for
2-51 in-network health maintenance organization coverage. For enrollees
2-52 in limited provider networks, higher cost sharing may be imposed
2-53 only when obtaining benefits or services outside the health
2-54 maintenance organization delivery network.
2-55 (f) The commissioner may adopt rules to implement this
2-56 article.
2-57 SECTION 3. Section 2, Texas Health Maintenance Organization
2-58 Act (Article 20A.02, Vernon's Texas Insurance Code), is amended by
2-59 amending Subsection (i) and by adding Subsections (aa) and (bb) to
2-60 read as follows:
2-61 (i) "Evidence of coverage" means any certificate, agreement,
2-62 or contract, including a blended contract, issued to an enrollee
2-63 setting out the coverage to which the enrollee is entitled.
2-64 (aa) "Blended contract" means a single document, including a
2-65 single contract policy, certificate, or evidence of coverage, that
2-66 provides a combination of indemnity and health maintenance
2-67 organization benefits.
2-68 (bb) "Point-of-service plan" means an arrangement under
2-69 which:
3-1 (1) an enrollee may choose to obtain benefits or
3-2 services, or both benefits and services, through either a health
3-3 maintenance organization delivery network, including a limited
3-4 provider network, or through a non-network delivery system outside
3-5 the health maintenance organization's health care delivery network,
3-6 including a limited provider network, and that are administered
3-7 through an indemnity benefit arrangement for the cost of health
3-8 care services; or
3-9 (2) indemnity benefits for the cost of the health care
3-10 services may be provided by an insurer or group hospital service
3-11 corporation in conjunction with corresponding benefits arranged or
3-12 provided by a health maintenance organization or indemnity benefits
3-13 for the cost of the health care services provided by a health
3-14 maintenance organization through a point-of-service rider as
3-15 provided by Section (6)(a)(6)(D) of this Act in conjunction with
3-16 corresponding benefits arranged or provided by a health maintenance
3-17 organization.
3-18 SECTION 4. Section 6, Texas Health Maintenance Organization
3-19 Act (Article 20A.06, Vernon's Texas Insurance Code), is amended by
3-20 amending Subsection (a) and adding Subsection (c) to read as
3-21 follows:
3-22 (a) The powers of a health maintenance organization include,
3-23 but are not limited to, the following:
3-24 (1) the purchase, lease, construction, renovation,
3-25 operation, or maintenance of hospitals, medical facilities, or
3-26 both, and ancillary equipment and such property as may reasonably
3-27 be required for its principal office or for such other purposes as
3-28 may be necessary in the transaction of the business of the health
3-29 maintenance organization;
3-30 (2) the making of loans to a medical group, under an
3-31 independent contract with it in furtherance of its program, or
3-32 corporations under its control, for the purpose of acquiring or
3-33 constructing medical facilities and hospitals, or in the
3-34 furtherance of a program providing health care services to
3-35 enrollees;
3-36 (3) the furnishing of or arranging for medical care
3-37 services only through other health maintenance organizations or
3-38 physicians or groups of physicians who have independent contracts
3-39 with the health maintenance organizations; the furnishing of or
3-40 arranging for the delivery of health care services only through
3-41 other health maintenance organizations or providers or groups of
3-42 providers who are under contract with or employed by the health
3-43 maintenance organization or through other health maintenance
3-44 organizations or physicians or providers who have contracted for
3-45 health care services with those other health maintenance
3-46 organizations or physicians or providers, except for the furnishing
3-47 of or authorization for emergency services, services by referral,
3-48 and services to be provided outside of the service area as approved
3-49 by the commissioner; provided, however, that a health maintenance
3-50 organization is not authorized to employ or contract with other
3-51 health maintenance organizations or physicians or providers in any
3-52 manner which is prohibited by any licensing law of this state under
3-53 which such health maintenance organizations or physicians or
3-54 providers are licensed; however, if a hospital, facility, agency,
3-55 or supplier is certified by the Medicare program, Title XVIII of
3-56 the Social Security Act (42 U.S.C. Section 1395 et seq.), or
3-57 accredited by the Joint Commission on Accreditation of Healthcare
3-58 Organizations or another national accrediting body, the health
3-59 maintenance organization shall be required to accept such
3-60 certification or accreditation;
3-61 (4) the contracting with any person for the
3-62 performance on its behalf of certain functions such as marketing,
3-63 enrollment, and administration;
3-64 (5) the contracting with an insurance company licensed
3-65 in this state, or with a group hospital service corporation
3-66 authorized to do business in the state, for the provision of
3-67 insurance, reinsurance, indemnity, or reimbursement against the
3-68 cost of health care and medical care services provided by the
3-69 health maintenance organization;
4-1 (6) the offering of:
4-2 (A) indemnity benefits covering out-of-area
4-3 emergency services; [and]
4-4 (B) indemnity benefits in addition to those
4-5 relating to out-of-area and emergency services, provided through
4-6 insurers or group hospital service corporations;
4-7 (C) a point-of-service plan under Article 3.64,
4-8 Insurance Code; or
4-9 (D) a point-of-service rider under Subsection
4-10 (c) of this section;
4-11 (7) receiving and accepting from government or private
4-12 agencies payments covering all or part of the cost of the services
4-13 provided or arranged for by the organization;
4-14 (8) all powers given to corporations (including
4-15 professional corporations and associations), partnerships, and
4-16 associations pursuant to their organizational documents which are
4-17 not in conflict with provisions of this Act, or other applicable
4-18 law.
4-19 (c) A health maintenance organization may offer a
4-20 point-of-service rider for out-of-network coverage without
4-21 obtaining a separate insurance carrier license if the expenses
4-22 incurred under the point-of-service rider do not exceed 10 percent
4-23 of the total medical and hospital expenses incurred for all health
4-24 plan products sold. If the expenses incurred by a health
4-25 maintenance organization under a point-of-service rider exceed 10
4-26 percent of the total medical and hospital expenses incurred for all
4-27 health plan products sold, the health maintenance organization
4-28 shall cease issuing new point-of-service riders until those
4-29 expenses fall below 10 percent or until the health maintenance
4-30 organization obtains an insurance carrier license under this Act.
4-31 Indemnity benefits and services provided under a point-of-service
4-32 rider may be limited to those services defined in the evidence of
4-33 coverage and may be subject to different cost-sharing provisions.
4-34 The cost-sharing provisions for indemnity benefits may be higher
4-35 than the cost-sharing provisions for in-network health maintenance
4-36 organization coverage. For enrollees in limited provider networks,
4-37 higher cost sharing may be imposed only when obtaining benefits or
4-38 services outside the health maintenance organization delivery
4-39 network. A health maintenance organization that issues a
4-40 point-of-service rider under this section must meet the net worth
4-41 requirements promulgated by the commissioner based on the actuarial
4-42 relation of the amount of insurance risk assumed through the
4-43 issuance of the point-of-service rider in relation to the amount of
4-44 solvency and reserve requirements already required of the health
4-45 maintenance organization.
4-46 SECTION 5. This Act takes effect September 1, 1999, and
4-47 applies only to an evidence of coverage for a health benefit plan
4-48 that is delivered, issued for delivery, or renewed on or after
4-49 January 1, 2000. An evidence of coverage for a health benefit plan
4-50 that is delivered, issued for delivery, or renewed before January
4-51 1, 2000, is governed by the law as it existed immediately before
4-52 the effective date of this Act, and that law is continued in effect
4-53 for this purpose.
4-54 SECTION 6. The importance of this legislation and the
4-55 crowded condition of the calendars in both houses create an
4-56 emergency and an imperative public necessity that the
4-57 constitutional rule requiring bills to be read on three several
4-58 days in each house be suspended, and this rule is hereby suspended.
4-59 * * * * *