By: Harris S.B. No. 890
A BILL TO BE ENTITLED
AN ACT
1-1 relating to the delegation of certain functions by health
1-2 maintenance organizations.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. Section 2, Texas Health Maintenance Organization
1-5 Act (Article 20A.02, Vernon's Texas Insurance Code), is amended by
1-6 adding Subsections (dd) and (ee) to read as follows:
1-7 (dd) "Delegation agreement" means an agreement by which a
1-8 health maintenance organization transfers the responsibility for a
1-9 function regulated under this Act.
1-10 (ee) "Delegated network" means an entity, other than a
1-11 health maintenance organization authorized to do business under
1-12 this Act or an insurer authorized to do business under Chapter 3,
1-13 Insurance Code, which by itself, or through one or more entities,
1-14 undertakes to arrange for or to provide medical care to an enrollee
1-15 in exchange for a predetermined payment for each enrollee on a
1-16 prospective basis.
1-17 SECTION 2. The Texas Health Maintenance Organization Act
1-18 (Chapter 20A, Vernon's Texas Insurance Code) is amended by adding
1-19 Section 18C to read as follows:
1-20 Sec. 18C. DELEGATION OF CERTAIN FUNCTIONS TO DELEGATED
1-21 NETWORKS. (a) A health maintenance organization that enters into
1-22 a delegation agreement with a delegated network shall execute a
1-23 written agreement with the delegated network. The health
1-24 maintenance organization shall file the written agreement with the
2-1 department not later than the 30th day after the date the agreement
2-2 is executed. The written agreement must contain:
2-3 (1) a monitoring plan, which includes:
2-4 (A) a description of financial practices that
2-5 will ensure that the delegated network tracks and reports
2-6 liabilities that have been incurred but not reported;
2-7 (B) a summary of the total amount paid by the
2-8 delegated network to physicians and providers on a monthly basis;
2-9 and
2-10 (C) a summary of complaints from physicians and
2-11 providers regarding delays in payments of claims or nonpayment of
2-12 claims, including the status of each complaint, on a monthly basis;
2-13 (2) a provision that the agreement cannot be
2-14 terminated by the delegated network or the health maintenance
2-15 organization without written notice provided before the 90th day
2-16 preceding the termination date;
2-17 (3) a provision that prohibits the delegated network
2-18 and the physicians and providers with whom it has contracted from
2-19 billing or attempting to collect from an enrollee under any
2-20 circumstance, including the insolvency of the health maintenance
2-21 organization or delegated network, payments for covered services
2-22 other than authorized copayments and deductibles;
2-23 (4) a provision that the delegation agreement may not
2-24 be construed to limit in any way the health maintenance
2-25 organization's authority or responsibility to comply with all
2-26 statutory and regulatory requirements;
3-1 (5) a provision that requires a delegated network or a
3-2 third party to provide a license number and to certify that the
3-3 network or third party is licensed as a third party administrator
3-4 under Article 21.07-6, Insurance Code, if the health maintenance
3-5 organization delegates its claims payment function to the delegated
3-6 network or a third party;
3-7 (6) a provision that requires a delegated network or a
3-8 third party to provide a license number and to certify that the
3-9 network or third party is licensed as a utilization review agent
3-10 under Article 21.58A, Insurance Code, if the health maintenance
3-11 organization delegates its utilization review function to the
3-12 delegated network or a third party;
3-13 (7) an acknowledgement and agreement by the delegated
3-14 network that:
3-15 (A) the health maintenance organization is:
3-16 (i) required to establish, operate, and
3-17 maintain a health care delivery system, quality assurance system,
3-18 provider credentialing system, and other systems and programs that
3-19 meet statutory and regulatory standards;
3-20 (ii) directly accountable for compliance
3-21 with those standards; and
3-22 (iii) not precluded from requesting that
3-23 the delegated network provide proof of financial viability;
3-24 (B) the role of the delegated network and any
3-25 entity with which it subcontracts in contracting with the health
3-26 maintenance organization is limited to performing certain delegated
4-1 functions of the health maintenance organization, using standards
4-2 approved by the health maintenance organization which are in
4-3 compliance with applicable statutes and rules and subject to the
4-4 health maintenance organization's oversight and monitoring of the
4-5 delegated network's performance; and
4-6 (C) if the delegated network fails to meet
4-7 monitoring standards established to ensure that functions delegated
4-8 or assigned to the network under the delegation contract are in
4-9 full compliance with all statutory and regulatory requirements, the
4-10 health maintenance organization may cancel delegation of any
4-11 management responsibilities;
4-12 (8) a provision that requires the delegated network to
4-13 make available to the health maintenance organization samples of
4-14 contracts with physicians and providers to ensure compliance with
4-15 the contractual requirements described by Subdivisions (2) and (3)
4-16 of this subsection, except that the agreement may not require that
4-17 the delegated network make available to the health maintenance
4-18 organization contractual provisions relating to financial
4-19 arrangements with the delegated network's physicians and providers;
4-20 (9) a provision that requires the delegated network to
4-21 provide the health maintenance organization, in a usable format
4-22 necessary for audit purposes and at most quarterly unless otherwise
4-23 specified in the agreement, the data necessary for the health
4-24 maintenance organization to comply with the department's reporting
4-25 requirements with respect to any delegated functions performed
4-26 under the delegation agreement, including:
5-1 (A) a summary:
5-2 (i) describing the methods, including
5-3 capitation, fee-for-service, or other risk arrangements, that the
5-4 delegated network used to pay its physicians and providers; and
5-5 (ii) including the percentage of
5-6 physicians and providers paid for each payment category;
5-7 (B) the period that claims and debts owed by the
5-8 delegated network have been pending and the dollar amount of those
5-9 claims and debts;
5-10 (C) information that will enable the health
5-11 maintenance organization to file claims for reinsurance,
5-12 coordination of benefits, and subrogation, if required by the
5-13 health maintenance organization's contract with the delegated
5-14 network; and
5-15 (D) documentation, except for information,
5-16 documents, and deliberations related to peer review that are
5-17 confidential or privileged, including those under Section 5.06,
5-18 Medical Practice Act (Article 4495b, Vernon's Texas Civil
5-19 Statutes), that relates to:
5-20 (i) a regulatory agency's inquiry or
5-21 investigation of the delegated network or of an individual
5-22 physician or provider with whom the delegated network contracts
5-23 that relates to an enrollee of the health maintenance organization;
5-24 and
5-25 (ii) the final resolution of a regulatory
5-26 agency's inquiry or investigation; and
6-1 (10) a provision relating to enrollee complaints that
6-2 requires the delegated network to report a complaint, as defined in
6-3 this Act, to the health maintenance organization within two
6-4 business days of the receipt of the complaint, except in the case
6-5 of a complaint involving emergency care as defined in this Act. In
6-6 the case of a complaint involving emergency care the delegated
6-7 network shall forward the complaint to the health maintenance
6-8 organization immediately. Nothing herein prohibits the delegated
6-9 network from attempting to resolve the complaint.
6-10 (b) A health maintenance organization shall provide to each
6-11 delegated network with which it has a delegation agreement the
6-12 following information in standard electronic format, at least
6-13 monthly unless otherwise provided in the agreement:
6-14 (1) the names and dates of birth or social security
6-15 numbers of the enrollees of the health maintenance organization who
6-16 are eligible or assigned to receive services from the delegated
6-17 network, including the number of enrollees added and terminated
6-18 since the previous reporting period;
6-19 (2) the age, sex, benefit plan and any riders to the
6-20 benefit plan, and employer for the enrollees of the health
6-21 maintenance organization who are eligible or assigned to receive
6-22 services from the delegated network;
6-23 (3) if the health maintenance organization pays any
6-24 claims for the delegated network, a summary of the number and
6-25 amount of claims paid by the health maintenance organization on
6-26 behalf of the delegated network during the previous reporting
7-1 period. A delegated network is not precluded from receiving, upon
7-2 request, additional information regarding such claims;
7-3 (4) if the health maintenance organization pays any
7-4 claims for the delegated network, a summary of the number and
7-5 amount of pharmacy prescriptions paid for each enrollee for which
7-6 the delegated network has taken partial risk during the previous
7-7 reporting period. A delegated network is not precluded from
7-8 receiving, upon request, additional information regarding such
7-9 claims;
7-10 (5) information that enables the delegated network to
7-11 file claims for reinsurance, coordination of benefits, and
7-12 subrogation; and
7-13 (6) patient complaint data that relates to the
7-14 delegated network.
7-15 (c) In addition to the information required by Subsection
7-16 (b) of this section, a health maintenance organization shall
7-17 provide to a delegated network with which it has a delegation
7-18 agreement:
7-19 (1) detailed risk-pool data, reported quarterly and on
7-20 settlement; and
7-21 (2) the rates required by the agreement and any known
7-22 future facility contract rates for the health maintenance
7-23 organization, if hospital or facility costs impact the delegated
7-24 network's costs, reported annually or on recontract.
7-25 (d) A health maintenance organization that receives
7-26 information through the monitoring plan required by Subsection
8-1 (a)(1) of this section that indicates the delegated network is not
8-2 operating in accordance with its written agreement or is operating
8-3 in a condition that renders the continuance of its business
8-4 hazardous to the enrollees, shall, in writing:
8-5 (1) notify the delegated network of those findings;
8-6 and
8-7 (2) request a written explanation of:
8-8 (A) the delegated network's noncompliance with
8-9 the written agreement; or
8-10 (B) the existence of the condition that renders
8-11 the continuance of the delegated network's business hazardous to
8-12 the enrollees.
8-13 (e) A delegated network shall respond to a request from a
8-14 health maintenance organization under Subsection (d) of this
8-15 section in writing not later than the 30th day after the date the
8-16 request is received.
8-17 (f) The health maintenance organization shall cooperate with
8-18 the delegated network to correct any failure by the delegated
8-19 network to comply with the regulatory requirements of the
8-20 department relating to any matters:
8-21 (1) delegated to the delegated network by the health
8-22 maintenance organization; or
8-23 (2) necessary for the health maintenance organization
8-24 to ensure compliance with statutory or regulatory requirements.
8-25 (g) The health maintenance organization shall notify the
8-26 department and request intervention if:
9-1 (1) the health maintenance organization does not
9-2 receive a timely response from the delegated network as required by
9-3 Subsection (e) of this section; or
9-4 (2) the health maintenance organization receives a
9-5 timely response from the delegated network as required by
9-6 Subsection (e) of this section, but the health maintenance
9-7 organization and the delegated network are unable to reach an
9-8 agreement as to whether the delegated network:
9-9 (A) is complying with the written agreement; or
9-10 (B) has corrected any problem regarding a
9-11 practice that is hazardous to an enrollee of the health maintenance
9-12 organization.
9-13 (h) On receipt of a request for intervention under
9-14 Subsection (g) of this section, the department may:
9-15 (1) request financial and operational documents from
9-16 the delegated network to further investigate deficiencies indicated
9-17 by the monitoring plan;
9-18 (2) conduct an on-site audit of the delegated network
9-19 if the department determines that the delegated network is not
9-20 complying with the monitoring standards required under Subsection
9-21 (a)(1) of this section; or
9-22 (3) notwithstanding any other provisions, upon
9-23 violation of a monitoring plan, suspend or revoke the third-party
9-24 administrator license or utilization review agent license of:
9-25 (A) the delegated network; or
9-26 (B) a third party with which the delegated
10-1 network has contracted.
10-2 (i) The department shall report to the delegated network and
10-3 the health maintenance organization the results of its review not
10-4 later than the 60th day after the date of the department's initial
10-5 request for documentation; provided, however, that the department
10-6 shall not report to the health maintenance organization any
10-7 information regarding prices, cost of care, or other information
10-8 not relevant to the monitoring plan.
10-9 (j) The delegated network shall respond to the department's
10-10 report and submit a corrective plan to the department and to the
10-11 health maintenance organization not later than the 30th day after
10-12 the date the delegated network receives the department's report.
10-13 The delegated network may withhold information regarding prices,
10-14 cost of care, or other information not relevant to the monitoring
10-15 plan.
10-16 (k) Reports and corrective plans required under Subsections
10-17 (i) or (j) of this section shall be treated as public documents,
10-18 except that any information regarding prices, costs of care, or
10-19 other information not relevant to the monitoring plan and any
10-20 information that is confidential by other law included in those
10-21 reports and corrective plans shall be considered confidential.
10-22 (l) The department may request that a delegated network take
10-23 corrective action to comply with the department's statutory and
10-24 regulatory requirements that:
10-25 (1) relate to any matters delegated by the health
10-26 maintenance organization to the delegated network; or
11-1 (2) are necessary to ensure the health maintenance
11-2 organization's compliance with statutory and regulatory
11-3 requirements.
11-4 (m) If a delegated network does not comply with the
11-5 department's request for corrective action, the department may
11-6 order the health maintenance organization to:
11-7 (1) temporarily or permanently cease assignment of new
11-8 enrollees to the delegated network;
11-9 (2) temporarily or permanently transfer enrollees to
11-10 alternative delivery systems to receive services; or
11-11 (3) modify or terminate its contract with the
11-12 delegated network.
11-13 (n) The commissioner may adopt rules as necessary to
11-14 interpret, implement, and enforce this section and augmentations
11-15 thereof.
11-16 (o) The commissioner shall adopt rules requiring delegated
11-17 networks to establish a process, including disclosure to enrollees,
11-18 for allowing enrollees, upon request, to access physicians or
11-19 health care providers who are not in the delegated network but who
11-20 are in the health maintenance organization network for:
11-21 (A) enrollees who have a prior relationship with
11-22 a provider who is in the health maintenance organization delivery
11-23 network but not in the delegated network; and
11-24 (B) enrollees who are past the 24th week of
11-25 pregnancy or who have life threatening, serious, chronic, acute, or
11-26 disabling conditions, diseases, or illnesses.
12-1 (p) The commissioner shall maintain enrollee and provider
12-2 complaints in a manner that identifies complaints made about
12-3 delegated networks.
12-4 SECTION 3. This Act takes effect September 1, 1999.
12-5 SECTION 4. The importance of this legislation and the
12-6 crowded condition of the calendars in both houses create an
12-7 emergency and an imperative public necessity that the
12-8 constitutional rule requiring bills to be read on three several
12-9 days in each house be suspended, and this rule is hereby suspended.