By Goodman                                            H.B. No. 2620
         77R7657 MXM-D                           
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to standardizing contracts, forms, and other documents
 1-3     used in managed care plans.
 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-5           SECTION 1.  Subchapter E, Chapter 21, Insurance Code, is
 1-6     amended by adding Article 21.52K to read as follows:
 1-7           Art. 21.52K.  STANDARD MANAGED CARE DOCUMENTS
 1-8           Sec. 1.  DEFINITIONS.  In this article:
 1-9                 (1)  "Managed care entity" means an entity described by
1-10     Section 2 of this article.
1-11                 (2)  "Managed care plan" means a health benefit plan:
1-12                       (A)  under which health care services are
1-13     provided to enrollees through contracts with health care
1-14     professionals  or health care facilities; and
1-15                       (B)  that provides financial incentives to
1-16     enrollees in the plan to use the participating practitioners,
1-17     participating health care facilities, and procedures covered by the
1-18     plan.
1-19           Sec. 2.  SCOPE OF ARTICLE.  This article applies to a health
1-20     maintenance organization, a preferred provider organization, an
1-21     approved nonprofit health corporation that holds a certificate of
1-22     authority  issued by the commissioner under Article 21.52F of this
1-23     code, and any other entity that offers a managed care plan,
1-24     including:
 2-1                 (1)  an insurance company;
 2-2                 (2)  a group hospital service corporation operating
 2-3     under Chapter 20 of this code;
 2-4                 (3)  a fraternal benefit society operating under
 2-5     Chapter 10 of this code;
 2-6                 (4)  a stipulated premium insurance company operating
 2-7     under Chapter 22 of this code; or
 2-8                 (5)  to the extent permitted by the Employee Retirement
 2-9     Income Security Act of 1974 (29 U.S.C. Section 1001 et seq.):
2-10                       (A)  a multiple employer welfare arrangement as
2-11     defined by Section 3, Employee Retirement Income Security Act of
2-12     1974 (29 U.S.C. Section 1002), or another analogous benefit
2-13     arrangement; or
2-14                       (B)  any other entity not licensed under this
2-15     code or another insurance law of this state that contracts directly
2-16     for health care services on a risk-sharing basis, including an
2-17     entity that contracts for health care services under a capitation
2-18     method.
2-19           Sec. 3.  RULES REGARDING STANDARD DOCUMENTS. The commissioner
2-20     shall adopt rules that establish, and require managed care entities
2-21     to use, standard contracts, forms, and other documents for routine
2-22     managed care functions.  The rules must include standard documents
2-23     for:
2-24                 (1)  contracts;
2-25                 (2)  member identification cards;
2-26                 (3)  referral forms; and
2-27                 (4)  pre-authorization forms.
 3-1           SECTION 2. (a)  This Act takes effect September 1, 2001.
 3-2           (b)  Not later than January 1, 2002, the commissioner of
 3-3     insurance shall adopt the rules required by Section 3, Article
 3-4     21.52K, Insurance Code, as added by this Act.