1-1 By: Smithee (Senate Sponsor - Sibley) H.B. No. 3021
1-2 (In the Senate - Received from the House May 13, 1999;
1-3 May 14, 1999, read first time and referred to Committee on Economic
1-4 Development; May 14, 1999, reported favorably by the following
1-5 vote: Yeas 4, Nays 0; May 14, 1999, sent to printer.)
1-6 A BILL TO BE ENTITLED
1-7 AN ACT
1-8 relating to a health maintenance organization's complaint and
1-9 appeals procedures.
1-10 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-11 SECTION 1. Section 2(f), Texas Health Maintenance
1-12 Organization Act (Article 20A.02, Vernon's Texas Insurance Code),
1-13 is amended to read as follows:
1-14 (f) "Complaint" means any dissatisfaction expressed by a
1-15 complainant orally or in writing to the health maintenance
1-16 organization with any aspect of the health maintenance
1-17 organization's operation, including but not limited to
1-18 dissatisfaction with plan administration; procedures related to
1-19 review or appeal of an adverse determination, as that term is
1-20 defined by Section 12A of this Act; the denial, reduction, or
1-21 termination of a service for reasons not related to medical
1-22 necessity; the way a service is provided; or disenrollment
1-23 decisions, expressed by a complainant. The term does not include
1-24 [A complaint is not] a misunderstanding or a problem of
1-25 misinformation that is resolved promptly by clearing up the
1-26 misunderstanding or supplying the appropriate information to the
1-27 satisfaction of the enrollee and does not include a provider's or
1-28 enrollee's oral or written dissatisfaction or disagreement with an
1-29 adverse determination.
1-30 SECTION 2. Section 12, Texas Health Maintenance Organization
1-31 Act (Article 20A.12, Vernon's Texas Insurance Code), as amended by
1-32 Chapters 163 and 1026, Acts of the 75th Legislature, Regular
1-33 Session, 1997, is amended to read as follows:
1-34 Sec. 12. COMPLAINT SYSTEM. (a) Every health maintenance
1-35 organization shall implement [establish] and maintain a complaint
1-36 system to provide reasonable procedures for the resolution of oral
1-37 and written complaints initiated by enrollees or providers
1-38 concerning health care services [an internal system for the
1-39 resolution of complaints], including a process for the notice and
1-40 appeal of complaints.
1-41 (b) The commissioner may adopt reasonable rules as necessary
1-42 or proper to implement and administer this section[. Each health
1-43 maintenance organization shall implement and maintain a system for
1-44 the resolution of complaints as provided by this section].
1-45 (c) [(b)] If a complainant notifies the health maintenance
1-46 organization orally or in writing of a complaint, the health
1-47 maintenance organization, not later than the fifth business day
1-48 after the date of the receipt of the complaint, shall send to the
1-49 complainant a letter acknowledging the date of receipt of the
1-50 complaint that includes a description of the organization's
1-51 complaint procedures and time frames. If the complaint is received
1-52 orally, the health maintenance organization shall also enclose a
1-53 one-page complaint form. The one-page complaint form must
1-54 prominently and clearly state that the complaint form must be
1-55 returned to the health maintenance organization for prompt
1-56 resolution of the complaint.
1-57 (d) [(c)] The health maintenance organization shall
1-58 investigate each oral and written complaint received in accordance
1-59 with its own policies and in compliance with this Act.
1-60 (e) [(d)] The total time for acknowledgment, investigation,
1-61 and resolution of the complaint by the health maintenance
1-62 organization may not exceed 30 calendar days after the date the
1-63 health maintenance organization receives the written complaint or
1-64 one-page complaint form from the complainant.
2-1 (f) [(e)] Subsections (c) [(b)] and (e) [(d)] of this
2-2 section do not apply to complaints concerning emergencies or
2-3 denials of continued stays for hospitalization. Investigation and
2-4 resolution of complaints concerning emergencies or denials of
2-5 continued stays for hospitalization shall be concluded in
2-6 accordance with the medical or dental immediacy of the case and may
2-7 not exceed one business day from receipt of the complaint.
2-8 (g) [(f)] After the health maintenance organization has
2-9 investigated a complaint, the health maintenance organization shall
2-10 issue a response letter to the complainant explaining the health
2-11 maintenance organization's resolution of the complaint within the
2-12 time frame set forth in Subsection (e) [(d)] of this section. The
2-13 letter must include a statement of the specific medical and
2-14 contractual reasons for the resolution and the specialization of
2-15 any physician or other provider consulted. [If the resolution is
2-16 to deny services based on an adverse determination of medical
2-17 necessity, the clinical basis used to reach that decision must be
2-18 included.] The response letter must contain a full description of
2-19 the process for appeal, including the time frames for the appeals
2-20 process and the time frames for the final decision on the appeal.
2-21 (h) [(g)] If the complaint is not resolved to the
2-22 satisfaction of the complainant, the health maintenance
2-23 organization shall provide an appeals process that includes the
2-24 right of the complainant either to appear in person before a
2-25 complaint appeal panel where the enrollee normally receives health
2-26 care services, unless another site is agreed to by the complainant,
2-27 or to address a written appeal to the complaint appeal panel. The
2-28 health maintenance organization shall complete the appeals process
2-29 under this section not later than the 30th calendar day after the
2-30 date of the receipt of the written request for appeal.
2-31 (i) [(h)] The health maintenance organization shall send an
2-32 acknowledgment letter to the complainant not later than the fifth
2-33 business day after the date of receipt of the written request for
2-34 appeal.
2-35 (j) [(i)] The health maintenance organization shall appoint
2-36 members to the complaint appeal panel, which shall advise the
2-37 health maintenance organization on the resolution of the dispute.
2-38 The complaint appeal panel shall be composed of equal numbers of
2-39 health maintenance organization staff, physicians or other
2-40 providers, and enrollees. A member of the complaint appeal panel
2-41 may not have been previously involved in the disputed decision.
2-42 The physicians or other providers must have experience in the area
2-43 of care that is in dispute and must be independent of any physician
2-44 or provider who made any prior determination. If specialty care is
2-45 in dispute, the appeal panel must include a [an additional] person
2-46 who is a specialist in the field of care to which the appeal
2-47 relates. The enrollees may not be employees of the health
2-48 maintenance organization.
2-49 (k) [(j)] Not later than the fifth business day before the
2-50 scheduled meeting of the panel, unless the complainant agrees
2-51 otherwise, the health maintenance organization shall provide to the
2-52 complainant or the complainant's designated representative:
2-53 (1) any documentation to be presented to the panel by
2-54 the health maintenance organization staff;
2-55 (2) the specialization of any physicians or providers
2-56 consulted during the investigation; and
2-57 (3) the name and affiliation of each health
2-58 maintenance organization representative on the panel.
2-59 (l) [(k)] The complainant, or designated representative if
2-60 the enrollee is a minor or disabled, is entitled to:
2-61 (1) appear in person before the complaint appeal
2-62 panel;
2-63 (2) present alternative expert testimony; and
2-64 (3) request the presence of and question any person
2-65 responsible for making the prior determination that resulted in the
2-66 appeal.
2-67 (m) [(l)] Investigation and resolution of appeals relating
2-68 to ongoing emergencies or denials of continued stays for
2-69 hospitalization shall be concluded in accordance with the medical
3-1 or dental immediacy of the case but in no event to exceed one
3-2 business day after the complainant's request for appeal. Due to
3-3 the ongoing emergency or continued hospital stay, and at the
3-4 request of the complainant, the health maintenance organization
3-5 shall provide, in lieu of a complaint appeal panel, a review by a
3-6 physician or provider who has not previously reviewed the case and
3-7 is of the same or similar specialty as typically manages the
3-8 medical condition, procedure, or treatment under discussion for
3-9 review of the appeal. The physician or provider reviewing the
3-10 appeal may interview the patient or the patient's designated
3-11 representative and shall render a decision on the appeal. Initial
3-12 notice of the decision may be delivered orally if followed by
3-13 written notice of the determination within three days.
3-14 Investigation and resolution of appeals after emergency care has
3-15 been provided shall be conducted in accordance with the process
3-16 established under this section, including the right to a review by
3-17 an appeal panel.
3-18 (n) [(m)] Notice of the final decision of the health
3-19 maintenance organization on the appeal must include a statement of
3-20 the specific medical determination, clinical basis, and contractual
3-21 criteria used to reach the final decision. The notice must also
3-22 include the toll-free telephone number and the address of the Texas
3-23 Department of Insurance.
3-24 (o) [(n)] The health maintenance organization shall maintain
3-25 a record of each complaint and any complaint proceeding and any
3-26 actions taken on a complaint for three years from the date of the
3-27 receipt of the complaint. A complainant is entitled to a copy of
3-28 the record on the applicable complaint and any complaint
3-29 proceeding.
3-30 (p) [(o)] Each health maintenance organization shall
3-31 maintain a complaint and appeal log regarding each complaint.
3-32 (q) [(p)] Each health maintenance organization shall
3-33 maintain documentation on each complaint received and the action
3-34 taken on the complaint until the third anniversary of the date of
3-35 receipt of the complaint. The Texas Department of Insurance may
3-36 review documentation maintained under this subsection during any
3-37 investigation of the health maintenance organization.
3-38 (r) [(q)] The commissioner may examine the complaint system
3-39 for compliance with this Act and may require the health maintenance
3-40 organization to make corrections as considered necessary by the
3-41 commissioner.
3-42 SECTION 3. Section 12A, Texas Health Maintenance
3-43 Organization Act (Article 20A.12A, Vernon's Texas Insurance Code),
3-44 as added by Chapter 163, Acts of the 75th Legislature, Regular
3-45 Session, 1997, is amended to read as follows:
3-46 Sec. 12A. APPEAL [REVIEW] OF ADVERSE DETERMINATIONS.
3-47 (a) [The complaint system required by Section 12 of this Act must
3-48 include:]
3-49 [(1) notification to the enrollee of the enrollee's
3-50 right to appeal an adverse determination to an independent review
3-51 organization;]
3-52 [(2) notification to the enrollee of the procedures
3-53 for appealing an adverse determination to an independent review
3-54 organization; and]
3-55 [(3) notification to an enrollee who has a
3-56 life-threatening condition of the enrollee's right to immediate
3-57 review by an independent review organization and the procedures to
3-58 obtain that review.]
3-59 [(b) The provisions of Article 21.58A, Insurance Code, that
3-60 relate to independent review apply to a health maintenance
3-61 organization under this section as if the health maintenance
3-62 organization were a utilization review agent.]
3-63 [(c)] In this section:
3-64 (1) "Adverse determination" means a determination by a
3-65 health maintenance organization or a utilization review agent that
3-66 the health care services furnished or proposed to be furnished to
3-67 an enrollee are not medically necessary or are not appropriate.
3-68 (2) "Independent review organization" means an
3-69 organization selected as provided under Article 21.58C, Insurance
4-1 Code.
4-2 (3) "Life-threatening condition" has the meaning
4-3 assigned by Section 6, Article 21.58A, Insurance Code.
4-4 (b) A health maintenance organization shall implement and
4-5 maintain an internal appeal system that provides reasonable
4-6 procedures for the resolution of an oral or written appeal
4-7 concerning dissatisfaction or disagreement with an adverse
4-8 determination that is initiated by an enrollee, a person acting on
4-9 behalf of an enrollee, or an enrollee's provider of record. The
4-10 appeal system must include procedures for notification, review, and
4-11 appeal of an adverse determination, as defined by this section, in
4-12 accordance with Article 21.58A, Insurance Code.
4-13 (c) When an enrollee, a person acting on behalf of an
4-14 enrollee, or an enrollee's provider of record expresses orally or
4-15 in writing any dissatisfaction or disagreement with an adverse
4-16 determination, the health maintenance organization or utilization
4-17 review agent shall regard the expression of dissatisfaction or
4-18 disagreement as an appeal of the adverse determination, as defined
4-19 by this section, and shall review and resolve the appeal in
4-20 accordance with Article 21.58A, Insurance Code.
4-21 (d) A health maintenance organization may integrate its
4-22 appeal procedures related to adverse determinations with the
4-23 complaint and appeal procedures established by the health
4-24 maintenance organization under Section 12 of this Act only if the
4-25 procedures related to adverse determinations comply with this
4-26 section and Article 21.58A, Insurance Code.
4-27 SECTION 4. Section 12A, Texas Health Maintenance
4-28 Organization Act (Article 20A.12A, Vernon's Texas Insurance Code),
4-29 as added by Chapter 1026, Acts of the 75th Legislature, Regular
4-30 Session, 1997, is redesignated as Section 12B, Texas Health
4-31 Maintenance Organization Act, to read as follows:
4-32 Sec. 12B [12A]. FILING OF COMPLAINTS WITH THE TEXAS
4-33 DEPARTMENT OF INSURANCE. (a) Any person, including persons who
4-34 have attempted to resolve complaints through a health maintenance
4-35 organization's complaint system process who are dissatisfied with
4-36 the resolution, may report an alleged violation of this Act to the
4-37 Texas Department of Insurance.
4-38 (b) The commissioner shall investigate a complaint against a
4-39 health maintenance organization to determine compliance with this
4-40 Act within 60 days after the Texas Department of Insurance's
4-41 receipt of the complaint and all information necessary for the
4-42 department to determine compliance. The commissioner may extend
4-43 the time necessary to complete an investigation in the event any of
4-44 the following circumstances occur:
4-45 (1) additional information is needed;
4-46 (2) an on-site review is necessary;
4-47 (3) the health maintenance organization, the physician
4-48 or provider, or the complainant does not provide all documentation
4-49 necessary to complete the investigation; or
4-50 (4) other circumstances beyond the control of the
4-51 department occur.
4-52 SECTION 5. Subchapter G, Chapter 3, Insurance Code, is
4-53 amended by adding Article 3.70-3D to read as follows:
4-54 Art. 3.70-3D. INDEPENDENT CONSUMER ASSISTANCE PROGRAM FOR
4-55 HEALTH MAINTENANCE ORGANIZATIONS. (a) The independent consumer
4-56 assistance program for health maintenance organizations is
4-57 established. The Office of Public Insurance Counsel shall
4-58 contract, through a request for proposals, with a nonprofit
4-59 organization to operate the program.
4-60 (b) The nonprofit organization:
4-61 (1) must not be involved in providing health care or
4-62 health care plans and must demonstrate that it has expertise in
4-63 providing direct assistance to consumers with respect to their
4-64 concerns and problems with health maintenance organizations; and
4-65 (2) may establish an advisory committee composed of
4-66 consumers, health care providers, and health care plan
4-67 representatives.
4-68 (c) The program shall:
4-69 (1) assist individual consumers in complaints or
5-1 appeals within the operation of a health maintenance organization,
5-2 including mediations and arbitrations, and outside of the operation
5-3 of a health maintenance organization, including appeals under
5-4 Article 21.58A of this code or in Medicaid and Medicare fair
5-5 hearings;
5-6 (2) supplement and not duplicate the functions
5-7 provided by existing programs or state agencies and shall refer
5-8 consumers to other programs or agencies if appropriate; and
5-9 (3) operate a statewide toll-free assistance telephone
5-10 number.
5-11 (d) The program may:
5-12 (1) serve as a statewide clearinghouse for objective
5-13 consumer information about health care coverage, including options
5-14 for obtaining health care coverage; and
5-15 (2) accept gifts, grants, or donations from any source
5-16 for the purpose of operating the program. The program may charge
5-17 reasonable fees to consumers to support the program.
5-18 SECTION 6. This Act takes effect September 1, 1999, and
5-19 applies only to a complaint expressed or appeal related to an
5-20 adverse determination made on or after that date. A complaint
5-21 expressed or appeal made before that date is governed by the law as
5-22 it existed immediately before the effective date of this Act, and
5-23 that law is continued in effect for that purpose.
5-24 SECTION 7. The importance of this legislation and the
5-25 crowded condition of the calendars in both houses create an
5-26 emergency and an imperative public necessity that the
5-27 constitutional rule requiring bills to be read on three several
5-28 days in each house be suspended, and this rule is hereby suspended.
5-29 * * * * *