1-1 By: Lucio S.B. No. 1514 1-2 (In the Senate - Filed March 9, 2001; March 14, 2001, read 1-3 first time and referred to Committee on Business and Commerce; 1-4 April 19, 2001, reported favorably by the following vote: Yeas 5, 1-5 Nays 0; April 19, 2001, sent to printer.) 1-6 A BILL TO BE ENTITLED 1-7 AN ACT 1-8 relating to the use of health care delivery networks to provide 1-9 workers' compensation medical benefits to employees of the Texas 1-10 Department of Transportation. 1-11 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-12 SECTION 1. Chapter 505, Labor Code, is amended by adding 1-13 Subchapter D to read as follows: 1-14 SUBCHAPTER D. USE OF HEALTH CARE DELIVERY NETWORKS 1-15 Sec. 505.101. DEFINITIONS. In this subchapter: 1-16 (1) "Health care delivery network" means a health care 1-17 delivery system in which a managed care organization arranges for 1-18 the provision of health care services directly or indirectly 1-19 through contracts with health care providers. 1-20 (2) "Managed care organization" means a person who is 1-21 authorized or otherwise permitted by law to arrange for or provide 1-22 a managed care plan. 1-23 (3) "Managed care plan" means a plan under which a 1-24 person undertakes to provide, arrange for, pay for, or reimburse 1-25 any part of the cost of health care services. The term does not 1-26 include a plan that indemnifies a person for the cost of health 1-27 care services through insurance. 1-28 Sec. 505.102. IMPLEMENTATION OF HEALTH CARE DELIVERY SYSTEM. 1-29 (a) In accordance with this subchapter and any other applicable 1-30 state law, the department may: 1-31 (1) implement a health care delivery system developed 1-32 under this subchapter that provides health care to employees 1-33 through the use of health care delivery networks; and 1-34 (2) monitor compliance with and take action as 1-35 necessary or appropriate to enforce this subchapter and related 1-36 rules, orders, and decisions of the department or the commission. 1-37 (b) To comply with this subchapter, the department may: 1-38 (1) establish one or more health care delivery 1-39 networks in various regions of this state; or 1-40 (2) implement this subchapter through contractual 1-41 arrangements with managed care organizations. 1-42 (c) Except as prohibited by federal law, the department and 1-43 the Texas Department of Insurance shall share confidential 1-44 information, including financial data, that relates to or affects a 1-45 person that may contract with the department to carry out the 1-46 purposes of this subchapter. 1-47 Sec. 505.103. USE OF HEALTH CARE DELIVERY NETWORKS. 1-48 (a) The Texas Transportation Commission by rule may require the 1-49 use of health care delivery networks under this subchapter to 1-50 provide medical benefits to employees under this chapter. 1-51 (b) The department shall notify its employees of the 1-52 adoption of a health care delivery system and shall periodically 1-53 provide the employees with a list of health care providers who are 1-54 participating members of the participating health care delivery 1-55 networks. 1-56 Sec. 505.104. RULES. (a) The Texas Transportation 1-57 Commission shall adopt rules as necessary or appropriate to carry 1-58 out its functions under this subchapter. 1-59 (b) The commissioner of insurance shall adopt rules as 1-60 necessary or appropriate to carry out the functions of the Texas 1-61 Department of Insurance under Section 505.102. 1-62 Sec. 505.105. DESIGN AND DEVELOPMENT OF HEALTH CARE DELIVERY 1-63 SYSTEM. In developing a health care delivery system under this 1-64 chapter, the department shall, to the extent possible, design the 2-1 system in a manner that: 2-2 (1) improves the health of employees by: 2-3 (A) emphasizing safety and the prevention of 2-4 work-related accidents and occupational diseases; and 2-5 (B) promoting continuity of care; 2-6 (2) ensures that each employee who sustains a 2-7 compensable injury: 2-8 (A) can receive high-quality, comprehensive 2-9 health care services in the employee's local community; and 2-10 (B) is entitled to immediate treatment of the 2-11 injury from a network health care provider without charge to the 2-12 employee and without compliance with any treatment preapproval 2-13 requirement otherwise applicable for treatment of a compensable 2-14 injury; 2-15 (3) enables this state to control the costs associated 2-16 with the workers' compensation program operated under this chapter 2-17 and results in cost savings to this state through delivery of 2-18 health care services through managed care; 2-19 (4) includes methods for ensuring accountability to 2-20 this state for the provision of health care services under the 2-21 workers' compensation program operated under this chapter, 2-22 including methods for financial reporting, quality assurance, and 2-23 utilization review; 2-24 (5) provides a single point of accountability for 2-25 collection of uniform data to assess, compile, and analyze outcome 2-26 quality and cost efficiency; 2-27 (6) requires comparative analyses of compiled data to 2-28 assess the relative value of alternative health care delivery 2-29 systems; 2-30 (7) oversees the procedures for setting capitation and 2-31 health care provider payment rates to ensure the cost-effective 2-32 provision of quality health care; and 2-33 (8) ensures that both private and public health care 2-34 providers and managed care organizations have an opportunity to 2-35 participate in the system. 2-36 Sec. 505.106. AUDITS; MEMORANDUM OF UNDERSTANDING. (a) The 2-37 department shall audit at least biennially each managed care 2-38 organization that contracts with the state under this subchapter. 2-39 (b) A managed care organization audited under Subsection (a) 2-40 is responsible for paying the costs of the audit. The costs of the 2-41 audit may be allowed as a credit against premium taxes paid by the 2-42 managed care organization, except as provided by Section 2, Article 2-43 1.28, Insurance Code. 2-44 (c) The department and the Texas Department of Insurance 2-45 shall enter into a memorandum of understanding to coordinate audits 2-46 of managed care organizations. The memorandum shall: 2-47 (1) identify any information required in a department 2-48 audit that is not customarily required in a Texas Department of 2-49 Insurance audit; and 2-50 (2) establish procedures for initiating and 2-51 distributing the findings of audits of a managed care organization. 2-52 Sec. 505.107. DUTIES OF MANAGED CARE ORGANIZATION; 2-53 CONTRACTUAL PROVISIONS. (a) A managed care organization that 2-54 contracts with the department under this subchapter shall: 2-55 (1) report to the department or the commission, as 2-56 appropriate, all information required by department or commission 2-57 rule, including information necessary to set rates, detect fraud, 2-58 and ensure quality of care; and 2-59 (2) submit annual disclosure statements to the 2-60 department regarding: 2-61 (A) the financial condition of the managed care 2-62 organization; and 2-63 (B) ownership interests in the managed care 2-64 organization. 2-65 (b) The department shall require that each contract between 2-66 a managed care organization and the state under this subchapter: 2-67 (1) state that information provided by a managed care 2-68 organization under this section may be used as necessary to detect 2-69 fraud and abuse; and 3-1 (2) authorize specific penalties for failure to 3-2 provide information required by department or commission rules. 3-3 SECTION 2. Subsection (a), Section 505.002, Labor Code, is 3-4 amended to read as follows: 3-5 (a) The following provisions of Subtitles A and B apply to 3-6 and are included in this chapter except to the extent that they are 3-7 inconsistent with this chapter: 3-8 (1) Chapter 401, other than Section 401.012, defining 3-9 "employee"; 3-10 (2) Chapter 402; 3-11 (3) Chapter 403, other than Sections 403.001-403.005; 3-12 (4) Chapter 405; 3-13 (5) Subchapters B, D, E, and H, Chapter 406, other 3-14 than Sections 406.071-406.073, and 406.075; 3-15 (6) Chapter 408, other than Sections 408.001(b) and 3-16 (c), 408.022, 408.023, and 408.024; 3-17 (7) Chapters 409 and 410; 3-18 (8) Subchapters A and G, Chapter 411, other than 3-19 Sections 411.003 and 411.004; 3-20 (9) Chapters 412-417; and 3-21 (10) Chapter 451. 3-22 SECTION 3. Subchapter B, Chapter 505, Labor Code, is amended 3-23 by adding Section 505.014 to read as follows: 3-24 Sec. 505.014. USE OF HEALTH CARE DELIVERY NETWORK. To 3-25 receive medical benefits under this chapter, an employee may be 3-26 required to use the services of a health care provider who is a 3-27 participating member of a health care delivery network implemented 3-28 under Subchapter D. 3-29 SECTION 4. This Act takes effect September 1, 2001, and 3-30 applies only to a claim for workers' compensation benefits based on 3-31 a compensable injury that occurs on or after January 1, 2002. A 3-32 claim based on a compensable injury that occurs before January 1, 3-33 2002, is governed by the law in effect on the date that the 3-34 compensable injury occurred, and the former law is continued in 3-35 effect for that purpose. 3-36 * * * * *