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By: Giddings H.B. No. 3589
A BILL TO BE ENTITLED
AN ACT
relating to a regional health care delivery network pilot project
in the workers' compensation system.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Sections 408.0221, Labor Code, is amended to
read as follows:
Sec. 408.0221. Regional Health Care Delivery Networks;
Advisory Committee.
(a) In this section and in Section 408.0222:
(1) "Advisory committee" means the Health Care Network
Advisory Committee.
(2) "Regional network" means a regional workers'
compensation health care delivery network established [by the
commission] under this section. In addition, any reference to
"regional network" is also applicable to the "pilot project"
defined in subdivision (3) of this subsection.
(3) "Pilot project" means the regional workers'
compensation health care pilot project established under
subsection (i) of this section.
(b) The regional networks established under this section
shall be fee-for-service networks designed to improve the quality
and reduce the cost of health care, with active health care
management and monitoring and a full range of health care services
or select health care services under contract as considered
feasible under the feasibility study required under Subsection (d).
(c) The Health Care Network Advisory Committee is
established to advise the commission on the implementation of this
section and Section 408.0222 and to monitor and oversee the
implementation of the regional network pilot project and regional
networks participating in the pilot project. Members of the
advisory committee are appointed by the governor for staggered
two-year terms, with the membership as follows:
(1) three employee representatives recommended by a
recognized statewide labor federation;
(2) three employer representatives;
(3) three ex officio insurance carrier
representatives, with one member representing state agencies, one
member representing the Texas Mutual Insurance Company [Workers'
Compensation Insurance Fund], and one member representing a
voluntary market insurance carrier;
(4) three ex officio health care provider
representatives;
(5) one ex officio independent actuarial expert; and
(6) the commission's medical advisor, who shall serve
as chair of the advisory committee.
(d) [The commission, on behalf of the advisory committee
established under this section, shall establish and, through
competitive procurement, contract with regional networks for the
provision of health care under this subtitle.] The commission, on
behalf of the advisory committee established under this section,
shall, through competitive procurement, contract with one or more
entities to determine the feasibility of, develop, and evaluate the
regional networks established under this section. Those entities
shall also recommend to the advisory committee appropriate network
standards and application requirements and assist the advisory
committee during the procurement process. [The provision of health
care under this subtitle shall not apply to prescription medication
or services as defined by Section 401.011(19), Subsection (e),
Labor Code.]
(e) The advisory committee shall make recommendations to
the commission regarding:
(1) the development of the standards by which health
care services are provided through regional networks;
(2) regional network application requirements and
fees;
(3) contract proposals;
(4) the feasibility of establishing one or more
regional networks using a phased implementation and evaluation
process;
(5) the use of consultants as necessary to assist the
commission in the procurement of regional network contracts; and
(6) the selection of administrators to build and
manage the regional networks and to report on their progress.
(f) The advisory committee shall gather information from
other entities, including the Research and Oversight Council on
Workers' Compensation, the Texas Health Care Information Council,
the Texas Department of Insurance, the Texas Department of Health,
and the Employees Retirement System of Texas.
(g) The standards adopted for preferred provider networks
under Article 3.70-3C, Insurance Code, as added by Chapter 1024,
Acts of the 75th Legislature, Regular Session, 1997, apply as
minimum standards for regional health care delivery networks
created under this section and are adopted by reference in this
section except to the extent they are inconsistent with this
subtitle. The advisory committee may also recommend additional
standards, including standards that require:
(1) for each geographic region, access to an adequate
number of health care providers and treating doctors in each
appropriate health care discipline and the professional
specialties within those disciplines and a viable network through:
(A) the use of economic profiling as described by
Article 3.70-3C, Insurance Code, as added by Chapter 1024, Acts of
the 75th Legislature, Regular Session, 1997; and
(B) limitations on the number of providers, as
provided by that article;
(2) the ability of an employee to receive treatment by
a regional network provider within a reasonable amount of time of
the regional network's knowledge of the need or request for
treatment and within a reasonable travel distance for the employee;
(3) a reasonable effort by the regional network to
attract health care providers who reflect the ethnic and cultural
background of the regional employee population;
(4) the availability of board-certified occupational
medicine specialists to provide expertise on disability management
and prevention and treatment of occupational injuries and
illnesses;
(5) accreditation of the regional networks or a
commitment to seek accreditation from a nationally recognized
organization such as the American Accreditation HealthCare
Commission or the National Committee for Quality Assurance;
(6) the use of strict credentialing criteria by
regional networks in the selection and deselection of its health
care providers, including verification that the provider:
(A) is on the commission's list of approved
doctors, if the provider is required to be on that list;
(B) has not, at the time of selection or
deselection, been sanctioned or made subject to additional
utilization review requirements by the commission;
(C) is not, at the time of selection or
deselection, subject to sanctions or substantive practice
restrictions imposed by the provider's licensing authority;
(D) has or is able to obtain practice privileges,
if required, at a participating hospital; and
(E) is covered by professional liability
insurance coverage as required by the regional network contract;
(7) satisfactory evidence of the regional network's
ability to comply with any financial requirements and ensure
delivery of services;
(8) compliance with ongoing training and educational
requirements established by the commission;
(9) the use of nationally recognized, scientifically
valid, and outcome-based treatment standards as guidelines for
health care;
(10) disclosure of the availability of interpreter
services as appropriate for the evaluation and treatment of
employees;
(11) timely and accurate reporting of data to
appropriately manage and determine the effectiveness of the
regional network in reducing medical costs and ensuring quality of
care;
(12) a process for reconsideration of medical
necessity denials and dispute resolution within the regional
network; [and]
(13) a process for reviewing requests for a change in
treating doctors made under Section 408.0222(s); and
(14) methods, resources, and procedures for
monitoring the quality of care provided to injured workers and for
identifying and eliminating inappropriate utilization of medical
services.
(h) The advisory committee and the Research and Oversight
Council on Workers' Compensation shall develop evaluation
standards and specifications as necessary to implement a regional
network report card. The commission shall ensure that the report
card is published and available for inspection. The commission
shall, on behalf of and at the direction of the advisory committee,
enter into an interagency contract with another state agency or
state university with a proven research capacity to produce all or
part of the report card, or to oversee production of the report
card. Initial funding to produce or oversee production of the
report card shall be provided by the subsequent injury fund as
described in subsection (l). The commission or another state
agency under interagency contract with the commission may procure
services as necessary to produce the report card. Ongoing costs
associated with the production of report cards shall be funded
either by assessments on networks participating in the pilot
project or be included in the fees for health care services paid by
insurance carriers participating in the regional network pilot
project. The report card[, at a minimum, must be based on
contracted reviews and] must include a risk-adjusted evaluation of:
(1) employee access to care;
(2) coordination of care and return to work;
(3) communication among system participants;
(4) return-to-work outcomes;
(5) health-related outcomes;
(6) employee, health care provider, employer, and
insurance carrier satisfaction;
(7) disability and re-injury prevention;
(8) appropriate clinical care;
(9) health care costs;
(10) utilization of health care; and
(11) statistical outcomes of medical dispute
resolution provided by independent review organizations.
(i) At the conclusion of the feasibility study described in
Subsection (b), and contingent on a finding that regional networks
may be feasible, a pilot project is established to analyze the
ability of networks created under the standards developed by the
advisory committee to improve the quality and reduce the costs of
health care provided to employees of employers participating in the
pilot project. The advisory committee may initiate the pilot
project in a designated geographic region or regions. On or before
January 1, 2004, the State Office of Risk Management, University of
Texas system, Texas A&M University system, and Texas Department of
Transportation shall, through competitive procurement,
individually or collectively contract with one or more regional
networks for the provision of health care under this subtitle as
part of the pilot project. For the purposes of this section and
Section 408.0222, the pilot project is initiated on the date that
employees begin to receive medical care in the network, and unless
continued by statute, ends three years from that date. A network
that contracts with a public employer covered under Subtitle C of
this title, other than an employer covered under Chapter 504, must
meet the network standards, report card requirements, and data
reporting requirements established by the advisory committee. The
regional network administrators shall report quarterly to the
commission and the advisory committee on the progress of
implementing the regional network pilot project [networks] and
shall submit consolidated annual reports by November 1 of each
subsequent year. The Research and Oversight Council on Workers'
Compensation shall report to the legislature by February 1, 2005
[January 1 of each odd-numbered year] on the status of the regional
network pilot project [implementation of regional networks] under
this section. The Research and Oversight Council on Workers'
Compensation shall have access to confidential information from
workers' compensation networks participating in the pilot project
upon request, including copies of network fee schedules and contact
information for participating providers. The council shall conduct
a survey with workers' compensation networks participating in the
pilot project regarding administrative burdens that are imposed on
or waived for preferred providers under the network contract,
aggregate data on the number of fee and medical necessity disputes
handled within the network, treatment or utilization guidelines
used by the network, and disability management guidelines used by
the network. Confidential network information obtained by council
remains confidential and is not subject to public disclosure under
Chapter 552, Texas Government Code. The council shall standardize
its information requests to participating networks and provide
reasonable notice by which these networks must comply with the
information request under this subsection. If the council finds
that certain participating networks have not reasonably complied
with the council's information request, then the council shall
notify the participating network of its noncompliance and forward a
copy of this notice to the advisory committee, the contracting
entity, and the commission. A network that does not comply with the
council's information request is subject to a maximum Class B
administrative violation for each week of noncompliance.
(j) The commission shall ensure that [regional network
contracts provide that] insurance carriers participating in the
pilot project have reasonable rights to conduct audits of the
regional networks in the pilot project under this subsection.
Insurance carriers participating in the regional network pilot
project shall be allowed the opportunity for consolidated audits of
the regional networks.
(k) The cost of assessing the feasibility of, developing,
and evaluating the regional networks created under this section,
including the initial creation and production of a report card,
shall be funded through an assessment on the subsequent injury fund
established under Section 403.006. This cost may not exceed a total
of $1.5 million for the regional networks. The cost of ongoing
regional network administration and management services and report
card administration shall either be included in the fees for health
care services paid by insurance carriers participating in the
regional network or by assessments on networks participating in the
pilot project.
(l) Based on the information compiled for the annual reports
submitted under Subsection (i), the regional network
administrators[, in consultation with actuaries with whom the
regional networks contract,] shall determine on an annual basis any
cost savings to the operation of the workers' compensation system
derived from the use of the regional networks and the amount of
those savings, and shall submit this information as part of the
annual report. The regional networks shall contract with
independent actuaries or financial advisors to produce this
determination if required to do so by the regional network contract
or the standards adopted under Section 408.0221. On receipt on the
first annual report from the networks in the pilot project, the
advisory committee shall decide whether to expand the pilot project
to include insurance carriers not listed in Subsection (i). If the
advisory committee chooses to expand the pilot to include other
insurance carriers, then an insurance carrier not listed in
Subsection (i) may elect to participate or not participate, through
a written participation agreement with the commission on behalf of
the advisory committee, in the pilot project established by this
section. An insurance carrier that elects to participate in the
pilot project may elect to contract directly with one or more
regional networks for the provision of health care under this
subtitle as part of the pilot project. A network that contracts
with an insurance carrier that elects to participate in the pilot
project must meet the network standards, report card requirements,
and data reporting requirements established by the advisory
committee.
(m) The regional network pilot project may, but is not
required to, comply with any or all of the following statutory
provisions of the Labor Code and related commission rules:
(1) Section 413.014, related to preauthorization and
concurrent review of medical services;
(2) Section 413.011, related to reimbursement
policies and guidelines and treatment guidelines; and
(3) Labor Code or commission rule timeframes related
to the payment of medical bills.
(n) The applicability of the statutory and rule provisions
in Subsection (m) shall be determined through the contract
negotiations described in this section.
SECTION 2. Section 408.0222, Labor Code, is amended to read
as follows:
Sec. 408.0222. Participation In Regional Network Pilot
Project; Selection Of Doctor Within Regional Network; Benefit
Incentives.
(a) An insurance carrier or a self-insurer certified to
provide workers' compensation coverage in this state may elect to
participate or not participate, by contract, in [a regional
network] the pilot project in accordance with Section 408.0221(m)
[established under Section 408.0221]. A public employer covered
under Subtitle C of this title, other than an employer covered under
Chapter 504, is required to participate in the [a] regional network
pilot project established under Section 408.0221. An insurance
carrier who elects to participate in the pilot project [regional
networks agrees] is required to abide by the terms of the regional
network contracts between the commission and the regional networks.
(b) [An insurance carrier may limit its election to
participate in a regional network established under Section
408.0221 to a particular employer or a particular region of this
state. This subsection expires January 1, 2006.
(c)] A health care provider participating in the [a]
regional network pilot project established under Section 408.0221
may perform only those procedures that are within the scope of the
practice for which the health care provider is licensed.
(c) [(d)] An employee participating in the regional network
pilot project established under Section 408.0221 may elect to
participate or not participate in the [a] regional network
[established under Section 408.0221]. Only an employee covered by
an insurance carrier who is participating [has elected to
participate] in the [a] regional network pilot project established
under Section 408.0221 may elect to participate in the [that]
regional network. An eligible employee may elect to participate or
not participate in the regional network for each compensable injury
sustained by the employee. Except as provided by this section, the
employee's election to participate in the network is effective for
all medical care related to an [that] injury occurring on or after
the date the insurance carrier begins to participate in the pilot
project. The advisory committee shall make recommendations and the
commission, by rule, shall establish:
(1) the form and manner by which an employee:
(A) receives notice of the employee's rights; or
(B) documents the employee's election or
rescission of a prior election;
(2) the timing and recovery of a payment of enhanced
benefits; and
(3) other related issues.
(d) [(e)] Except as provided by Subsection (e) [(f)], an
employee shall make the election described by this section during
an employer-designated enrollment period or at the time of
employment. An employee who has elected to participate in the
network may rescind that election at any time before the earlier of:
(1) the date on which the employee begins to receive
enhanced income benefits under Subsection (l) [(m)]; or
(2) the 14th day after the date on which the employee
receives health care from a network health care provider for that
injury.
(e) [(f)] An employee may elect to participate in the [a]
regional network pilot project established under Section 408.0221
at any time with the insurance carrier's agreement. An employee is
not bound by an election to participate in the [a] regional network
pilot project [made under Subsection (d) or this subsection] if:
(1) the insurance carrier waives the election;
(2) the commission invalidates the election based on a
determination of coercion;
(3) the employee relocates to an area outside of the
regional network's service area, and the regional network is not
able to identify alternate network providers to provide health care
services reasonable for the employee's medical condition; or
(4) notwithstanding Subsection (m) [(n)], the
commission sets aside the employee's election based on a finding
that:
(A) the worker was bound by an election to
participate in the network;
(B) the carrier disputes the compensability of
the employee's injury; and
(C) network health care providers are unwilling
to provide health care to the employee pending the resolution of the
dispute.
(f) [(g)] An insurance carrier who elects to participate in
[a regional network] the pilot project established under Section
408.0221 shall provide each employer who obtains coverage through
the insurance carrier with adequate information about the regional
network to share with the employer's employees. Before an employee
makes an election under this section to participate in the [a]
regional network pilot project, the employer shall provide the
employee with:
(1) a complete, plain-language description of the
regional network's services, restrictions, and benefits, including
a description of the enhanced income benefits that may be due; and
(2) access to the most recent:
(A) list of doctors available through the
regional network; and
(B) regional network report card developed under
Section 408.0221.
(g) [(h)] An employer shall not discharge, subject to
disciplinary action, or take an adverse employment action against
an employee who elects not to participate in a regional network
created under Section 408.0221 if the employer's action would not
have occurred in the absence of the employee's election not to
participate.
(h) [(i)] An employee may bring suit against an employer for
violation of Subsection (g) [(h)] if:
(1) the employee gives written notice of intent to
bring suit to the employer within 60 days of the alleged violation;
and
(2) the employer does not reinstate the employee and
pay actual wages lost and reasonable attorney's fees incurred due
to the employer's action within 60 days of notification of the
employee's intent to bring suit.
(i) [(j)] Subsection (h) does not authorize a cause of
action or damages against the state, a state agency, or an employee
of the state beyond the actions and damages authorized by Chapter
101, Civil Practice and Remedies Code. The employee must bring suit
for an employer's violation of Subsection (g) [(h)] within one year
of the alleged violation. A suit under this section may be brought
in the county in which:
(1) the plaintiff resides;
(2) the plaintiff was employed; or
(3) the defendant's primary place of business is
located.
(j) [(k)] If the employee prevails in an action under
Subsection (h) [(i)], the employee may recover:
(1) lost wages;
(2) reinstatement of front pay as equitable relief in
lieu of reinstatement;
(3) reasonable attorney's fees; and
(4) court costs.
(k) [(l)] A suit under this section is the exclusive remedy
for violation of Subsection (g) [(h)], and the provisions of
Chapter 451 do not apply to such a violation. Parties may not
maintain an action under Rule 42, Texas Rules of Civil Procedure.
(l) [(m)] An employee who elects to participate in a
regional network created under Section 408.0221 shall receive:
(1) notwithstanding Section 408.082(c), income
benefits from the date disability begins if the disability lasts
two weeks or longer; and
(2) notwithstanding Section 408.061, an increased
maximum weekly benefit of up to 150 percent of the state average
weekly wage for temporary income benefits.
(m) [(n)] Except for emergency care, or as otherwise
provided by this section, an employee who elects to participate in
the [a] regional network pilot project shall receive medical
treatment, including referrals, from health care providers within
the regional network. An employee or an employee's treating doctor
may use a health care provider outside of the regional network with
the approval of the regional network for good cause consistent with
the regional network contract. If medically necessary services are
not available through regional network health care providers, the
regional network must, on the request of a regional network health
care provider, within a reasonable time allow a referral to a
nonregional network health care provider and shall fully reimburse
the nonregional network physician or provider at the rate provided
by the commission fee guidelines or an agreed rate. For purposes of
this subsection, "emergency care" has the meaning assigned by
Section 2(g), Texas Health Maintenance Organization Act (Article
20A.02, Vernon's Texas Insurance Code).
(n) [(o)] A health care provider who participates in the [a]
regional network pilot project created under Section 408.0221 shall
be reimbursed and be subject to utilization review as provided by
the regional network contract. The insurance carrier is
responsible for payment of regional network providers as provided
by the contract with the regional network. A non-network provider
who does not obtain the approval of the regional network to provide
services may not be reimbursed by the insurance carrier, unless the
provider requested and received verification from the insurance
carrier that the employee was not bound by a network election under
Subsection (d) [(e)].
(o) [(p)] To resolve an issue regarding the necessity or the
appropriateness of care, or referrals to nonregional network
physicians or providers, an employee or an employee's treating
doctor may request a review by an independent review organization
under Section 413.031(d).
(p) [(q)] An employee who elects to participate in the [a]
regional network pilot project established under Section 408.0221
shall select an initial treating doctor within the regional network
as provided by the regional network contract. An employee who
requests to change treating doctors within the regional network is
not subject to Section 408.022. At the sole discretion of the
regional network, an employee may select a treating doctor outside
of the regional network if:
(1) the employee has a preexisting relationship with a
doctor who maintains the employee's medical records and has a
documented history of treatment before the date of injury; and
(2) that doctor agrees in writing to abide by the
rules, terms, and conditions of the regional network contract,
including an agreement to refer the employee within the regional
network for services available through the regional network.
(q) [(r)] An employee is subject to the selection of doctor,
change of doctor, and other medical benefit and income benefit
requirements established under this chapter and Chapter 413 [if an
employee]:
(1) if the employee elects not to participate in the
[a] regional network pilot project established under Section
408.0221; or
(2) as described by Subsection (e) [is employed by an
employer for whom the insurance carrier has not elected to
participate in a regional network established under Section
408.0221].
(r) [(s)] An employee may change treating doctors within
the regional network established under Section 408.0221 in which
the employee is participating in accordance with the regional
network contract and is entitled to:
(1) make one change from the initial treating doctor
to an alternate treating doctor within the regional network unless
the change is for the purpose of securing a new impairment rating or
new determination of maximum medical improvement; and
(2) request additional changes of the treating doctor
in the manner provided by the regional network contract.
(s) [(t)] An employee or insurance carrier may request that
the commission order an examination under Section 408.0041 if an
employee has received conflicting impairment ratings or
determinations of maximum medical improvement from more than one
treating doctor.
(t) [(u)] For purposes of this section, the following is not
a selection of an alternate doctor in a regional network
established under Section 408.0221:
(1) a referral made by the doctor chosen by the
employee if the referral is medically reasonable and necessary;
(2) the receipt of services ancillary to surgery;
(3) the obtaining of a second opinion only on the
appropriateness of the diagnosis or treatment;
(4) the selection of a doctor because the original
doctor:
(A) dies;
(B) retires; or
(C) becomes unavailable, [or] unable, or
unwilling to provide medical care to the employee; or
(5) a change of doctor required because of a change of
residence by the employee.
SECTION 3. Section 408.023, Labor Code, is amended to read
as follows:
Sec. 408.0223. Insurance Carrier Networks.
(a) In this section, "insurance carrier network" means a
voluntary workers' compensation health care delivery network
established by an insurance carrier. The term does not include a
regional network established under Section 408.0221.
(b) This subtitle does not prohibit an insurance carrier,
whether doing business as an individual carrier or as a group, from
participating in or maintaining voluntary insurance carrier
networks if those voluntary insurance carrier networks allow
selection of doctors as provided by Section 408.022.
(c) This subtitle does not prohibit an insurance carrier
from concurrently participating in an insurance carrier network and
a regional network established under Section 408.0221.
(d) The standards adopted for preferred provider networks
under Article 3.70-3C, Insurance Code, as added by Chapter 1024,
Acts of the 75th Legislature, Regular Session, 1997, and as
subsequently amended, apply as minimum standards for insurance
carrier networks and are adopted by reference in this section
except to the extent those standards are inconsistent with this
subtitle. The advisory committee, defined in Section 408.0221, may
recommend additional standards for insurance carrier networks that
are no more stringent than the additional standards that the
advisory committee recommends for the regional [health care
delivery] network pilot project [networks] pursuant to Section
408.0221(g).
(e) [The] On behalf of the advisory committee, the Texas
Workers' Compensation Commission shall adopt rules, as necessary,
to implement additional standards for insurance carrier networks.
SECTION 4. This Act takes effect immediately if it receives
a vote of two-thirds of all the members elected to each house, as
provided by Section 39, Article III, Texas Constitution. If this
Act does not receive the vote necessary for immediate effect, this
Act takes effect September 1, 2003.