SRC-CTC S.B. 1514 77(R)   BILL ANALYSIS


Senate Research Center   S.B. 1514
77R6641 PB-DBy: Lucio
Business & Commerce
4/9/2001
As Filed


DIGEST AND PURPOSE 

Currently, the medical care offered to Texas Department of Transportation
(department) employees with work-related injuries or illnesses is costly
and does not discourage unnecessary use of medical services.  As proposed,
S.B. 1514 authorizes the department to use medical provider networks to
provide medical, pharmaceutical, and hospital services under the workers'
compensation program, and require employees with work-related injuries to
use the networks to obtain treatment. 

RULEMAKING AUTHORITY

Rulemaking authority is expressly granted to the Texas Transportation
Commission in SECTION 1 (Sections 505.103 and 505.104, Labor Code) and to
the commissioner of insurance in SECTION 1 (Section 505.104, Labor Code) of
this bill. 

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Chapter 505, Labor Code, by adding Subchapter D, as
follows: 

SUBCHAPTER D.  USE OF HEALTH CARE DELIVERY NETWORKS

Sec. 505.101.  DEFINITIONS.  Defines "health care delivery network,"
"managed care organization," and "managed care plan." 

Sec. 505.102.  IMPLEMENTATION OF HEALTH CARE DELIVERY SYSTEM. Authorizes
the Texas Department of Transportation (department), in accordance with
this subchapter and any other applicable state law, to perform certain
actions.  Authorizes the department, to comply with this subchapter, to
perform certain actions.  Requires the department and the Texas Department
of Insurance, except as prohibited by federal law, to share confidential
information, including financial data, that relates to or affects a person
that may contract with the department to carry out the purposes of this
subchapter. 

Sec. 505.103.  USE OF HEALTH CARE DELIVERY NETWORKS.  Authorizes the Texas
Transportation Commission (commission) by rule to require the use of health
care delivery networks under this subchapter to provide medical benefits to
employees under this chapter. Requires the department to notify its
employees of the adoption of a health care delivery system (system) and to
periodically provide the employees with a list of health care providers who
are participating members of the participating health care delivery
networks. 

Sec. 505.104.  RULES.  Requires the commission to adopt rules as necessary
or appropriate to carry out its functions under this subchapter.  Requires
the commissioner of insurance to adopt rules as necessary or appropriate to
carry out the functions of the Texas Department of Insurance under Section
505.102. 

Sec. 505.105.  DESIGN AND DEVELOPMENT OF HEALTH CARE DELIVERY SYSTEM.
Requires the department, in developing a system under this chapter and to
the  extent possible, to design the system in a certain manner. 

Sec. 505.106.  AUDITS; MEMORANDUM OF UNDERSTANDING.  (a) Requires the
department to audit at least biennially each managed care organization that
contracts with the state under this subchapter.   

(b) Provides that a managed care organization audited under Subsection (a)
is responsible for paying the costs of the audit.  Authorizes the costs of
the audit to be allowed as a credit against premium taxes paid by the
managed care organization, except as provided by Section 2, Article 1.28,
Insurance Code. 

(c) Requires the department and the Texas Department of Insurance to enter
into a memorandum of understanding to coordinate audits of managed care
organizations. Requires the memorandum to contain certain items. 

Sec. 505.107.  DUTIES OF MANAGED CARE ORGANIZATION; CONTRACTUAL PROVISIONS.
Requires a managed care organization that contracts with the department
under this subchapter to perform certain actions.  Requires the department
to require that each contract between a managed care organization and the
state under this subchapter include certain statements. 

SECTION 2.  Amends Section 505.002(a), Labor Code, by adding Sections
408.022, 408.023, and 408.024 to a list of sections that do not apply to
and are not included in this chapter. 

SECTION 3.  Amends Chapter 505B, Labor Code, by adding Section 505.014, as
follows: 

Sec. 505.014.  USE OF HEALTH CARE DELIVERY NETWORK.  Authorizes an employee
to be required to use the services of a health care provider who is a
participating member of a health care delivery network implemented under
Subchapter D in order to receive medical benefits under this chapter. 

SECTION 4.  Effective date: September 1, 2001.
  Makes application of this Act prospective to January 1, 2002.