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.
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