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.