76R14672 T
By Harris S.B. No. 890
Substitute the following for S.B. No. 890:
By Burnam C.S.S.B. No. 890
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the delegation of certain functions by health
1-3 maintenance organizations.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Section 2, Texas Health Maintenance Organization
1-6 Act (Article 20A.02, Vernon's Texas Insurance Code), is amended by
1-7 adding Subsections (dd) and (ee) to read as follows:
1-8 (dd) "Delegation agreement" means an agreement by which a
1-9 health maintenance organization assigns the responsibility for a
1-10 function regulated under this Act.
1-11 (ee) "Delegated network" means an entity, other than a
1-12 health maintenance organization authorized to do business under
1-13 this Act or an insurer authorized to do business under Chapter 3,
1-14 Insurance Code, which (i) by itself, or through one or more
1-15 entities, undertakes to arrange for or to provide medical care to
1-16 an enrollee in exchange for a predetermined payment on a
1-17 prospective basis, and (ii) performs on behalf of the health
1-18 maintenance organization, any function regulated by this Act. The
1-19 term does not include an individual physician or a group of
1-20 employed physicians practicing medicine under one federal tax
1-21 identification number and whose total claims paid to providers not
1-22 employed by the group is less than 20 percent of the total
1-23 collected revenue of the group calculated on a calendar year basis.
1-24 SECTION 2. The Texas Health Maintenance Organization Act
2-1 (Chapter 20A, Vernon's Texas Insurance Code) is amended by adding
2-2 Section 18C to read as follows:
2-3 Sec. 18C. DELEGATION OF CERTAIN FUNCTIONS TO DELEGATED
2-4 NETWORKS. (a) A health maintenance organization that enters into
2-5 a delegation agreement with a delegated network shall execute a
2-6 written agreement with the delegated network. The health
2-7 maintenance organization shall file the written agreement with the
2-8 department not later than the 30th day after the date the agreement
2-9 is executed. The written agreement must contain:
2-10 (1) a monitoring plan, which includes:
2-11 (A) a description of financial practices that
2-12 will ensure that the delegated network tracks and reports
2-13 liabilities that have been incurred but not reported;
2-14 (B) a summary of the total amount paid by the
2-15 delegated network to physicians and providers on a monthly basis;
2-16 and
2-17 (C) a summary of complaints from physicians,
2-18 enrollees and providers regarding delays in payments of claims or
2-19 nonpayment of claims, including the status of each complaint, on a
2-20 monthly basis;
2-21 (2) a provision that the agreement cannot be
2-22 terminated without cause by the delegated network or the health
2-23 maintenance organization without written notice provided before the
2-24 90th day preceding the termination date;
2-25 (3) a provision that prohibits the delegated network
2-26 and the physicians and providers with whom it has contracted from
2-27 billing or attempting to collect from an enrollee under any
3-1 circumstance, including the insolvency of the health maintenance
3-2 organization or delegated network, payments for covered services
3-3 other than authorized copayments and deductibles;
3-4 (4) a provision that the delegation agreement may not
3-5 be construed to limit in any way the health maintenance
3-6 organization's authority or responsibility including financial
3-7 responsibility to comply with all statutory and regulatory
3-8 requirements;
3-9 (5) a provision that requires the delegated network to
3-10 comply with all statutory and regulatory requirements relating to
3-11 any function, duty responsibility or delegation assumed by or
3-12 carried out by the delegated network:
3-13 (6) a provision that requires a delegated network or a
3-14 third party to provide a license number and to certify that the
3-15 network or third party is licensed as a third party administrator
3-16 under Article 21.07-6, Insurance Code, if the health maintenance
3-17 organization delegates its claims payment function to the delegated
3-18 network or a third party;
3-19 (7) a provision that requires a delegated network or a
3-20 third party to provide a license number and to certify that the
3-21 network or third party is licensed as a utilization review agent
3-22 under Article 21.58A, Insurance Code, if the health maintenance
3-23 organization delegates it utilization review function to the
3-24 delegated network or a third party, and that
3-25 (A) enrollees will receive notification at the
3-26 time of enrollment which entity has responsibility for performing
3-27 utilization review; and
4-1 (B) the delegated network or third party
4-2 performing utilization review shall do so in accordance with
4-3 Art. 21.58(A) of the Texas Insurance Code, and;
4-4 (C) utilization review decisions made by the
4-5 delegated network or a third party shall be forwarded to the health
4-6 maintenance organization on a monthly basis.
4-7 (8) an acknowledgment and agreement by the delegated
4-8 network that:
4-9 (A) the health maintenance organization is:
4-10 (i) required to establish, operate, and
4-11 maintain a health care delivery system, quality assurance system,
4-12 provider credentialing system, and other systems and programs that
4-13 meet statutory and regulatory standards;
4-14 (ii) directly accountable for compliance
4-15 with those standards, and;
4-16 (iii) not precluded from contractually
4-17 requesting that the delegated network provide proof of financial
4-18 viability.
4-19 (B) the role of the delegated network and any
4-20 entity with which it subcontracts in contracting with the health
4-21 maintenance organization is limited to performing certain delegated
4-22 functions of the health maintenance organization, using standards
4-23 approved by the health maintenance organization and which are in
4-24 compliance with applicable statutes and rules and subject to the
4-25 health maintenance organization's oversight and monitoring of the
4-26 delegated network's performance; and
4-27 (C) if the delegated network fails to meet
5-1 monitoring standards established to ensure that functions delegated
5-2 or assigned to the network under the delegation contract are in
5-3 full compliance with all statutory and regulatory requirements, the
5-4 health maintenance organization may cancel delegation of any or all
5-5 delegated functions;
5-6 (9) a provision that requires the delegated network to
5-7 make available to the health maintenance organization samples of
5-8 contracts with physicians and providers to ensure compliance with
5-9 the contractual requirements described by Subdivisions (2) and (3)
5-10 of this subsection, except that the agreement may not require that
5-11 the delegated network make available to the health maintenance
5-12 organization contractual provisions relating to financial
5-13 arrangements with the delegated network's physicians and providers;
5-14 and
5-15 (10) a provision that requires the delegated network
5-16 to provide the health maintenance organization, in a usable format
5-17 necessary for audit purposes and at most quarterly unless otherwise
5-18 specified in the agreement, the data necessary for the health
5-19 maintenance organization to comply with the department's reporting
5-20 requirements with respect to any delegated functions performed
5-21 under the delegation agreement, including:
5-22 (A) a summary:
5-23 (i) describing the methods, including
5-24 capitation, fee-for-service, or other risk arrangements, that the
5-25 delegated network used to pay its physicians and providers; and
5-26 (ii) including the percentage of
5-27 physicians and providers paid for each payment category;
6-1 (B) the period that claims and debts for medical
6-2 services owed by the delegated network have been pending and the
6-3 aggregate dollar amount of those claims and debts;
6-4 (C) information that will enable the health
6-5 maintenance organization to file claims for reinsurance,
6-6 coordination of benefits and subrogation, if required by the health
6-7 maintenance organization's contract with the delegated network; and
6-8 (D) documentation, except for information,
6-9 documents, and deliberations related to peer review that are
6-10 confidential or privileged under Section 5.06, Medical Practice Act
6-11 (Article 4495b, Vernon's Texas Civil Statutes), that relates to:
6-12 (i) a regulatory agency's inquiry or
6-13 investigation of the delegated network or of an individual
6-14 physician or provider with whom the delegated network contracts
6-15 that relates to an enrollee of the health maintenance organization;
6-16 and
6-17 (ii) the final resolution of a regulatory
6-18 agency's inquiry or investigation; and
6-19 (11) a provision relating to enrollee complaints that
6-20 requires the delegated network to ensure that:
6-21 (A) upon receipt of a complaint, as defined by
6-22 this Act, a delegated network shall report the complaint to the
6-23 health maintenance organization within two business days, except in
6-24 the case of a complaint involving emergency care as defined in this
6-25 Act. In the case of a complaint involving emergency care, the
6-26 delegated network shall forward the complaint immediately to the
6-27 health maintenance organization. Nothing herein shall prohibit the
7-1 delegated network from attempting to resolve a complaint.
7-2 (b) A health maintenance organization shall provide to each
7-3 delegated network with which it has a delegation agreement the
7-4 following information in standard electronic format, at least
7-5 monthly unless otherwise provided in the agreement:
7-6 (1) the names and dates of birth or social security
7-7 numbers of the enrollees of the health maintenance organization who
7-8 are eligible or assigned to receive services from the delegated
7-9 network, including the enrollees added and terminated since the
7-10 previous reporting period;
7-11 (2) the age, sex, benefit plan and any riders to that
7-12 benefit plan, and employer for the enrollees of the health
7-13 maintenance organization who are eligible or assigned to receive
7-14 services from the delegated network;
7-15 (3) if the health maintenance organization pays any
7-16 claims for the delegated network, a summary of the number and
7-17 amount of claims paid by the health maintenance organization on
7-18 behalf of the delegated network during the previous reporting
7-19 period. A delegated network is not precluded from receiving, upon
7-20 request, additional non-proprietary information regarding such
7-21 claims;
7-22 (4) if the health maintenance organization pays any
7-23 claims for the delegated network, a summary of the number and
7-24 amount of pharmacy prescriptions paid for each enrollee for which
7-25 the delegated network has taken partial risk during the previous
7-26 reporting period. A delegated network is not precluded from
7-27 receiving, upon request, additional non-proprietary information
8-1 regarding such claims;
8-2 (5) information that enables the delegated network to
8-3 file claims for reinsurance, coordination of benefits and
8-4 subrogation; and
8-5 (6) patient complaint data that relates to the
8-6 delegated network.
8-7 (c) In addition to the information required by Subsection
8-8 (b) of this section, a health maintenance organization shall
8-9 provide to a delegated network with which it has a delegation
8-10 agreement:
8-11 (1) detailed risk-pool data, reported quarterly and on
8-12 settlement; and
8-13 (2) the percent of premium attributable to hospital or
8-14 facility costs, if hospital or facility costs impact the delegated
8-15 network's costs, reported quarterly; and if there are changes in
8-16 hospital or facility contracts with the health maintenance
8-17 organization, the projected impact of those changes on the percent
8-18 of premium attributable to hospital and facility costs within
8-19 thirty days of such changes.
8-20 (d) A health maintenance organization that receives
8-21 information through the monitoring plan required by Subsection
8-22 (a)(1) of this section that indicates the delegated network is not
8-23 operating in accordance with its written agreement or is operating
8-24 in a condition that renders the continuance of its business
8-25 hazardous to the enrollees, shall, in writing:
8-26 (1) notify the delegated network of those findings;
8-27 and
9-1 (2) request a written explanation of:
9-2 (A) the delegated network's noncompliance with
9-3 the written agreement; or
9-4 (B) the existence of the condition that renders
9-5 the continuance of the delegated network's business hazardous to
9-6 the enrollees.
9-7 (e) A delegated network shall respond to a request from a
9-8 health maintenance organization under Subsection (d) of this
9-9 section in writing not later than the 30th day after the date the
9-10 request is received.
9-11 (f) The health maintenance organization shall cooperate with
9-12 the delegated network to correct any failure by the delegated
9-13 network to comply with the regulatory requirements of the
9-14 department relating to any matters:
9-15 (1) delegated to the delegated network by the health
9-16 maintenance organization; or
9-17 (2) necessary for the health maintenance organization
9-18 to ensure compliance with statutory or regulatory requirements.
9-19 (g) the health maintenance organization shall notify the
9-20 department and request intervention if:
9-21 (1) the health maintenance organization does not
9-22 receive a timely response from the delegated network as required by
9-23 Subsection (e) of this section; or
9-24 (2) the health maintenance organization receives a
9-25 timely response from the delegated network as required by
9-26 Subsection (e) of this section, but the health maintenance
9-27 organization and the delegated network are unable to reach an
10-1 agreement as to whether the delegated network:
10-2 (A) is complying with the written agreement; or
10-3 (B) has corrected any problem regarding a
10-4 practice that is hazardous to an enrollee of the health maintenance
10-5 organization.
10-6 (h) On receipt of a request for intervention under
10-7 Subsection (g) of this section, the department may:
10-8 (1) request financial and operational documents from
10-9 the delegated network to further investigate deficiencies indicated
10-10 by the monitoring plan;
10-11 (2) conduct an on-site audit of the delegated network
10-12 if the department determines that the delegated network is not
10-13 complying with the monitoring standards required under Subsection
10-14 (a)(1) of this section; or
10-15 (3) notwithstanding any other provisions, upon
10-16 violation of a monitoring plan, suspend or revoke the third party
10-17 administrator license or utilization review agent license of:
10-18 (A) the delegated network; or
10-19 (B) a third party with which the delegated
10-20 network has contracted.
10-21 (i) The department shall report to the delegated network and
10-22 the health maintenance organization the results of its review not
10-23 later than the 60th day after the date of the department's initial
10-24 request for documentation; provided, however, the department shall
10-25 not report to the health maintenance organization any information
10-26 regarding fee schedules, prices, cost of care, or other information
10-27 not relevant to the monitoring plan.
11-1 (j) The delegated network shall respond to the department's
11-2 report and submit a corrective plan to the department and to the
11-3 health maintenance organization not later than the 30th day after
11-4 the date the delegated network receives the department's report.
11-5 The delegated network may withhold information regarding, fee
11-6 schedules, prices, cost of care, or other information not relevant
11-7 to the monitoring plan.
11-8 (k) Reports and corrective plans required under Subsections
11-9 (i) or (j) of this section shall be treated as public documents,
11-10 except health care provider fee schedules, prices, costs of care or
11-11 other information not relevant to the monitoring plan and any other
11-12 information that is considered confidential by law shall be
11-13 considered confidential.
11-14 (l) The department may request that a delegated network take
11-15 corrective action to comply with the department's statutory and
11-16 regulatory requirements that:
11-17 (1) relate to any matters delegated by the health
11-18 maintenance organization to the delegated network; or
11-19 (2) are necessary to ensure the health maintenance
11-20 organization's compliance with statutory and regulatory
11-21 requirements.
11-22 (m) If a delegated network does not comply with the
11-23 department's request for corrective action, the department may
11-24 order the health maintenance organization to:
11-25 (1) temporarily or permanently cease assignment of new
11-26 enrollees to the delegated network;
11-27 (2) temporarily or permanently transfer enrollees to
12-1 alternative delivery systems to receive services; or
12-2 (3) modify or terminate its contract with the
12-3 delegated network.
12-4 (n) The commissioner shall maintain enrollee and provider
12-5 complaints in a manner that identifies complaints made about
12-6 delegated networks.
12-7 (n) The commissioner may adopt rules as necessary to
12-8 interpret, implement, and enforce this section.
12-9 SECTION 3. The Texas Health Maintenance Organization Act
12-10 (Chapter 20A, Vernon's Texas Insurance Code), Article 20A.11(b) is
12-11 amended to read as follows:
12-12 (b) A health maintenance organization shall provide an
12-13 accurate written description of health care plan terms and
12-14 conditions including restrictions or limitations related to limited
12-15 provider networks or delegated networks within a health care plan,
12-16 to allow any current or prospective group contract holder and
12-17 current or prospective enrollee eligible for enrollment in a health
12-18 care plan to make comparisons and informed decisions before
12-19 selecting among health care plans. The written description must be
12-20 in a readable and understandable format as prescribed by the
12-21 commissioner and shall include a current list of physicians and
12-22 providers, including delineation of limited provider networks and
12-23 delegated networks. The health maintenance organization may
12-24 provide its hand book to satisfy this requirement provided the
12-25 handbook's content is substantially similar to and achieves the
12-26 same level of disclosure as the written description prescribed by
12-27 the commissioner.
13-1 SECTION 4. This Act takes effect September 1, 1999, except
13-2 that SECTION 3 takes effect for any contract entered into or
13-3 renewed on or after January 1, 2000.
13-4 SECTION 5. Articles 20A.02(dd) and (ee) and 20A.18C,
13-5 Insurance Code, as added by this Act, expire September 2, 2001
13-6 unless continued in existence by the Legislature by that date.
13-7 SECTION 6. The importance of this legislation and the
13-8 crowded condition of the calendars in both houses create an
13-9 emergency and an imperative public necessity that the
13-10 constitutional rule requiring bills to be read on three several
13-11 days in each house be suspended, and this rule is hereby suspended.