By Smithee H.B. No. 3022
76R6898 PB-D
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the regulation of health insurance, health care plans
1-3 provided by health maintenance organizations, and other health
1-4 benefit plans.
1-5 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-6 SECTION 1. Section 2, Texas Health Maintenance Organization
1-7 Act (Article 20A.02, Vernon's Texas Insurance Code), is amended by
1-8 adding Subsection (aa) to read as follows:
1-9 (aa) "Net worth" means the excess of total admitted assets
1-10 over total liabilities, excluding liability for subordinated debt
1-11 issued in compliance with Article 1.39, Insurance Code.
1-12 SECTION 2. The Texas Health Maintenance Organization Act
1-13 (Chapter 20A, Vernon's Texas Insurance Code) is amended by adding
1-14 Section 9A to read as follows:
1-15 Sec. 9A. ACCESS TO OUT-OF-NETWORK PHYSICIANS AND PROVIDERS.
1-16 (a) In this section:
1-17 (1) "Network physician or provider" means a physician
1-18 or provider who, under contract to a health maintenance
1-19 organization, provides health care services to enrollees in a
1-20 health care plan.
1-21 (2) "Out-of-network physician or provider" means a
1-22 physician or provider who is not under contract to a health
1-23 maintenance organization for a health care plan.
1-24 (b) An enrollee may select an out-of-network physician or
2-1 provider to provide health care services to the enrollee.
2-2 (c) The health maintenance organization shall pay the
2-3 out-of-network physician or provider an amount equal to the amount
2-4 the health maintenance organization would pay to a network
2-5 physician or provider for the same health care service. If the
2-6 out-of-network physician or provider is providing services for
2-7 which a network physician or provider would be compensated on a
2-8 capitated basis, the health maintenance organization shall pay the
2-9 out-of-network physician or provider an amount equal to the amount
2-10 the health maintenance organization would pay to a network
2-11 physician or provider for the period the out-of-network physician
2-12 or provider is providing services to the enrollee. Notwithstanding
2-13 any other law, and except as provided by Subsection (d) of this
2-14 section, an enrollee who selects an out-of-network physician or
2-15 provider under Subsection (b) of this section is responsible for
2-16 any amount charged for the health care service by that physician or
2-17 provider that exceeds the amount paid by the health maintenance
2-18 organization, and shall pay that amount to the health maintenance
2-19 organization, to be forwarded to the out-of-network physician or
2-20 provider, plus a reasonable fee approved by the commissioner to
2-21 cover the administrative expenses incurred by the health
2-22 maintenance organization before receiving the health care services
2-23 from the out-of-network physician or provider.
2-24 (d) This section does not apply to health care services
2-25 provided by an out-of-network physician or provider as required
2-26 under Section 9, Texas Health Maintenance Organization Act (Chapter
2-27 20A, Vernon's Texas Insurance Code).
3-1 (e) The commissioner shall adopt rules to implement this
3-2 section.
3-3 SECTION 3. The Texas Health Maintenance Organization Act
3-4 (Chapter 20A, Vernon's Texas Insurance Code) is amended by adding
3-5 Sections 13A, 13B, and 13C to read as follows:
3-6 Sec. 13A. MINIMUM NET WORTH. (a) A health maintenance
3-7 organization authorized to provide basic health care services shall
3-8 maintain a minimum net worth of $1.5 million.
3-9 (b) A health maintenance organization authorized to provide
3-10 limited health care services shall maintain a minimum net worth of
3-11 $1 million.
3-12 (c) A health maintenance organization authorized to offer
3-13 only a single health care service plan shall maintain a minimum net
3-14 worth of $500,000.
3-15 (d) The minimum net worth required by this section shall
3-16 consist only of the following:
3-17 (1) lawful money of the United States of America;
3-18 (2) bonds of this state;
3-19 (3) bonds or other evidences of indebtedness of the
3-20 United States of America or any of its agencies when such
3-21 obligations are guaranteed as to principal and interest by the
3-22 United States of America; or
3-23 (4) bonds or other interest-bearing evidences of
3-24 indebtedness of any counties or municipalities of this state.
3-25 Sec. 13B. PHASE-IN PERIOD FOR MINIMUM NET WORTH. (a) A
3-26 health maintenance organization authorized to provide basic health
3-27 care services that was licensed before September 1, 1999, shall
4-1 achieve and maintain a minimum net worth of:
4-2 (1) $500,000 not later than December 31, 2000;
4-3 (2) $1 million not later than December 31, 2001; and
4-4 (3) $1.5 million not later than December 31, 2002.
4-5 (b) A health maintenance organization authorized to provide
4-6 limited health care services that was licensed before September 1,
4-7 1999, shall achieve and maintain a minimum net worth of:
4-8 (1) $300,000 not later than December 31, 2000;
4-9 (2) $600,000 not later than December 31, 2001; and
4-10 (3) $1 million not later than December 31, 2002.
4-11 (c) A health maintenance organization authorized to offer
4-12 only a single health care service plan that was licensed before
4-13 September 1, 1999, shall achieve and maintain a minimum net worth
4-14 of:
4-15 (1) $150,000 not later than December 31, 2000;
4-16 (2) $300,000 not later than December 31, 2001; and
4-17 (3) $500,000 not later than December 31, 2002.
4-18 (d) This section expires January 1, 2003.
4-19 Sec. 13C. PROTECTION AGAINST INSOLVENCY: NET WORTH.
4-20 (a) The commissioner may adopt rules or by rule establish
4-21 guidelines requiring any health maintenance organization that holds
4-22 a certificate of authority under this Act to maintain a specified
4-23 net worth based on:
4-24 (1) the nature and type of risks the health
4-25 maintenance organization underwrites or reinsures;
4-26 (2) the premium volume of risks the health maintenance
4-27 organization underwrites or reinsures;
5-1 (3) the composition, quality, duration, or liquidity
5-2 of the health maintenance organization's investment portfolio;
5-3 (4) fluctuations in the market value of securities the
5-4 health maintenance organization holds;
5-5 (5) the adequacy of the health maintenance
5-6 organization's reserves;
5-7 (6) the number of individuals enrolled by the health
5-8 maintenance organization; or
5-9 (7) other business risks.
5-10 (b) Rules adopted or guidelines established under Subsection
5-11 (a) of this section must be designed to ensure the financial
5-12 solvency of health maintenance organizations for the protection of
5-13 enrollees. The rules and guidelines may provide for a health
5-14 maintenance organization to comply with a risk-based net worth
5-15 requirement established under Subsection (a) of this section in
5-16 stages over a two-year period.
5-17 SECTION 4. Subchapter E, Chapter 21, Insurance Code, is
5-18 amended by adding Article 21.53T to read as follows:
5-19 Art. 21.53T. COVERAGE FOR WELL BABY AND WELL CHILD CARE
5-20 Sec. 1. DEFINITIONS. In this article:
5-21 (1) "Enrollee" means an individual enrolled in a
5-22 health benefit plan.
5-23 (2) "Health benefit plan" means a plan described by
5-24 Section 2(a) of this article.
5-25 (3) "Well baby and well child care" means health care
5-26 services for a child from birth through the date the child is 18
5-27 years of age, as defined by rules adopted by the Texas Board of
6-1 Health.
6-2 Sec. 2. SCOPE OF ARTICLE. (a) This article applies only to
6-3 a health benefit plan that provides benefits for medical or
6-4 surgical expenses incurred as a result of a health condition,
6-5 accident, or sickness, including an individual, group, blanket, or
6-6 franchise insurance policy or insurance agreement, a group hospital
6-7 service contract, or an individual or group evidence of coverage or
6-8 similar coverage document that is offered by:
6-9 (1) an insurance company;
6-10 (2) a group hospital service corporation operating
6-11 under Chapter 20 of this code;
6-12 (3) a fraternal benefit society operating under
6-13 Chapter 10 of this code;
6-14 (4) a stipulated premium insurance company operating
6-15 under Chapter 22 of this code;
6-16 (5) a reciprocal exchange operating under Chapter 19
6-17 of this code;
6-18 (6) a health maintenance organization operating under
6-19 the Texas Health Maintenance Organization Act (Chapter 20A,
6-20 Vernon's Texas Insurance Code);
6-21 (7) a multiple employer welfare arrangement that holds
6-22 a certificate of authority under Article 3.95-2 of this code; or
6-23 (8) an approved nonprofit health corporation that
6-24 holds a certificate of authority issued by the commissioner under
6-25 Article 21.52F of this code.
6-26 (b) This article does not apply to:
6-27 (1) a plan that provides coverage:
7-1 (A) only for a specified disease or other
7-2 limited benefit;
7-3 (B) only for accidental death or dismemberment;
7-4 (C) for wages or payments in lieu of wages for a
7-5 period during which an employee is absent from work because of
7-6 sickness or injury;
7-7 (D) as a supplement to liability insurance;
7-8 (E) for credit insurance;
7-9 (F) only for dental or vision care;
7-10 (G) only for hospital expenses; or
7-11 (H) only for indemnity for hospital confinement;
7-12 (2) a small employer health benefit plan written under
7-13 Chapter 26 of this code;
7-14 (3) a Medicare supplemental policy as defined by
7-15 Section 1882(g)(1), Social Security Act (42 U.S.C. Section 1395ss),
7-16 and its subsequent amendments;
7-17 (4) workers' compensation insurance coverage;
7-18 (5) medical payment insurance coverage issued as part
7-19 of a motor vehicle insurance policy; or
7-20 (6) a long-term care policy, including a nursing home
7-21 fixed indemnity policy, unless the commissioner determines that the
7-22 policy provides benefit coverage so comprehensive that the policy
7-23 is a health benefit plan as described by Subsection (a) of this
7-24 section.
7-25 Sec. 3. COVERAGE REQUIRED. A health benefit plan that
7-26 provides benefits for a child of an enrollee must provide coverage
7-27 for each covered child of the enrollee for well baby and well child
8-1 care, including newborn testing and screening for genetic and
8-2 metabolic disorders.
8-3 Sec. 4. DEDUCTIBLE, COINSURANCE, AND COPAYMENT REQUIREMENTS.
8-4 The benefits required under this article may not be made subject to
8-5 a deductible, coinsurance, or copayment requirement that exceeds
8-6 the deductible, coinsurance, or copayment requirements applicable
8-7 to other similar benefits provided under the health benefit plan.
8-8 Sec. 5. RULES. (a) The Texas Board of Health shall adopt
8-9 rules defining the scope of well baby and well child care. In
8-10 adopting the rules, that board shall consider the guidelines and
8-11 recommendations of the American Academy of Pediatrics and the
8-12 American Academy of Family Physicians or their successor
8-13 organizations or of other nationally recognized medical
8-14 organizations specializing in pediatric issues. The board shall
8-15 provide the commissioner with the rules and any subsequent
8-16 amendments to those rules in a timely manner.
8-17 (b) The commissioner may adopt rules as necessary to
8-18 administer this article.
8-19 SECTION 5. Chapter 26, Insurance Code, is amended by adding
8-20 Subchapter I to read as follows:
8-21 SUBCHAPTER I. AVAILABILITY OF CERTAIN HEALTH BENEFIT
8-22 PLANS TO OTHER PERSONS
8-23 Art. 26.99. AVAILABILITY OF CATASTROPHIC CARE AND BASIC
8-24 COVERAGE BENEFIT PLANS. The commissioner by order may make
8-25 available to any individual or group the catastrophic care benefit
8-26 plan and the basic coverage benefit plan established under
8-27 Subchapter E of this chapter.
9-1 SECTION 6. Sections 13(i), (j), (k), and (l), Texas Health
9-2 Maintenance Organization Act (Article 20A.13, Vernon's Texas
9-3 Insurance Code), are repealed.
9-4 SECTION 7. (a) In this section, "health benefit plan" has
9-5 the meaning assigned by Article 21.53T, Insurance Code, as added by
9-6 this Act.
9-7 (b) The Texas Department of Insurance shall conduct a study
9-8 of health benefit plans in this state and shall, not later than
9-9 January 15, 2001, make recommendations to the 77th Legislature for
9-10 legislation relating to:
9-11 (1) the regulation of health benefit plan issuers and
9-12 the rights and obligations of those issuers;
9-13 (2) the adequacy of coverage and services provided to,
9-14 and the fairness of rates for, persons receiving benefits under
9-15 health benefit plans, including persons covered under small and
9-16 large employer plans and plans for state employees and employees of
9-17 political subdivisions of the state;
9-18 (3) the rights and obligations of persons receiving
9-19 benefits under health benefit plans, including persons covered
9-20 under small and large employer plans and plans for state employees
9-21 and employees of political subdivisions of the state;
9-22 (4) the fairness of rates of compensation for
9-23 physicians and other health care providers under health benefit
9-24 plans and the rights and obligations of physicians and other health
9-25 care providers who provide services for which benefits are provided
9-26 under health benefit plans; and
9-27 (5) any other appropriate matter identified by the
10-1 commissioner of insurance that relates to:
10-2 (A) health benefit plans;
10-3 (B) issuers of health benefit plans;
10-4 (C) persons entitled to benefits under health
10-5 benefit plans; and
10-6 (D) physicians and other health care providers
10-7 who provide services under health benefit plans.
10-8 SECTION 8. The Texas Department of Health shall adopt the
10-9 rules required by Article 21.53T, Insurance Code, as added by this
10-10 Act, not later than November 1, 1999.
10-11 SECTION 9. The change in law made by Sections 2, 4, and 6 of
10-12 this Act applies only to a health benefit plan that is delivered,
10-13 issued for delivery, or renewed on or after January 1, 2000. A
10-14 health benefit plan that is delivered, issued for delivery, or
10-15 renewed before January 1, 2000, is governed by the law as it
10-16 existed immediately before the effective date of this Act, and that
10-17 law is continued in effect for this purpose.
10-18 SECTION 10. This Act takes effect September 1, 1999.
10-19 SECTION 11. 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.