By: Carona S.B. No. 1576
(In the Senate - Filed March 14, 2003; March 20, 2003, read
first time and referred to Committee on State Affairs;
May 19, 2003, reported adversely, with favorable Committee
Substitute by the following vote: Yeas 6, Nays 0; May 19, 2003,
sent to printer.)
COMMITTEE SUBSTITUTE FOR S.B. No. 1576 By: Nelson
A BILL TO BE ENTITLED
AN ACT
relating to the creation of the regional workers' compensation
health care delivery networks pilot project; providing an
administrative violation.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. The heading to Section 408.0221, Labor Code, is
amended to read as follows:
Sec. 408.0221. REGIONAL HEALTH CARE DELIVERY NETWORKS PILOT
PROJECT; ADVISORY COMMITTEE.
SECTION 2. Section 408.0221, Labor Code, is amended by
amending Subsections (a) through (d) and (g) through (l) and adding
Subsections (a-1) through (a-4), (i-1), (i-2), (i-3), and (m)
through (p) to read as follows:
(a) In this section:
(1) "Advisory committee" means the Health Care Network
Advisory Committee.
(2) "Pilot project" means the regional workers'
compensation health care delivery networks pilot project
established under this section.
(3) "Regional network" means a regional workers'
compensation health care delivery network that contracts under this
section to provide health care under the pilot project [established
by the commission under this section].
(a-1) The commission shall establish the pilot project to
analyze the ability of regional 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 pilot project
may be established in one or more designated geographic regions.
(a-2) Not later than January 1, 2003, the following public
employers shall, through competitive procurement, contract with
one or more regional networks to provide health care under this
subtitle under the pilot project:
(1) the State Office of Risk Management;
(2) The University of Texas System;
(3) The Texas A&M University System; and
(4) the Texas Department of Transportation.
(a-3) A public employer listed in Subsection (a-2) may
contract with one or more regional networks under that subsection
individually or by mutual agreement of two or more of the public
employers.
(a-4) A regional network must meet the network standards,
data reporting requirements, and report card requirements
established by the advisory committee.
(b) Each [The] regional network [networks established under
this section] shall be a fee-for-service network [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 advisory committee shall [Health Care Network
Advisory Committee is established to] advise the commission on the
implementation of this section and Section 408.0222 and shall
monitor and oversee the implementation of the pilot project and the
regional networks. 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
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.
(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 employees and
for identifying and eliminating the inappropriate use 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 an
institution of higher education, as defined by Section 61.003,
Education Code, with a proven research capacity to produce all or
part of the report card or to oversee production of the report card.
If the commission does not receive a satisfactory bid from a state
agency or an institution of higher education, the commission, on
behalf of and at the direction of the advisory committee, may
contract with a private entity to produce the report card or to
oversee production of the report card. The commission or a state
agency or institution of higher education under interagency
contract with the commission may procure services as necessary to
produce the report card. 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) The regional network administrators shall report
quarterly to the commission and the advisory committee on the
progress of implementing the pilot project [regional networks] and
shall submit consolidated annual reports not later than November 1
of each year. The Research and Oversight Council on Workers'
Compensation shall report to the legislature not later than
February [by January] 1 of each odd-numbered year on the status of
the pilot project [implementation of regional networks under this
section].
(i-1) The commission and the Research and Oversight Council
on Workers' Compensation shall have access to confidential
information from regional networks, including copies of network fee
schedules and contact information for participating providers. The
commission and the council shall each standardize its information
requests to regional networks and provide reasonable notice by
which the networks must comply with the information request under
this subsection. If the commission or the council finds that a
regional network has not reasonably complied with the information
request, the commission or council shall notify the regional
network of its noncompliance and forward a copy of the notice to the
advisory committee, the contracting entity, and the commission, if
applicable. A regional network that does not comply with an
information request from the commission or the council under this
subsection is subject to a Class B administrative violation, to be
assessed by the commission, for each week of noncompliance.
(i-2) The Research and Oversight Council on Workers'
Compensation shall conduct a survey of regional networks 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.
(i-3) Confidential information regarding regional networks
obtained by the commission or the Research and Oversight Council on
Workers' Compensation under Subsection (i-1) is not subject to
public disclosure under Chapter 552, Government Code.
(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 under this subsection. Insurance carriers
participating in the pilot project [regional network] 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, including costs associated
with the initial production of a report card, [created under this
section] 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 ongoing report card administration shall be included in the
fees for health care services paid by insurance carriers
participating in the pilot project or shall be funded by
assessments on regional networks, as determined by the commission
on behalf of and at the direction of the advisory committee
[regional network].
(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 include that information in the annual
report required by Subsection (i).
(m) On receipt of the first annual report from the regional
networks, the advisory committee shall decide whether to expand the
pilot project to include insurance carriers other than the public
employers that are required to participate in the pilot project
under Subsection (a-2). If the advisory committee chooses to
expand the pilot project to include those insurance carriers, an
insurance carrier or a self-insurer certified to provide workers'
compensation coverage in this state, other than a public employer
that is required to participate in the pilot project under
Subsection (a-2), may elect to participate in the pilot project
through a written agreement with the commission on behalf of the
advisory committee. An insurance carrier that elects to
participate in the pilot project under this subsection may elect to
contract directly with one or more regional networks for the
provision of health care under the pilot project.
(n) A regional network that contracts with an insurance
carrier under Subsection (m) must meet the network standards, data
reporting requirements, and report card requirements established
by the advisory committee.
(o) A participant in the pilot project, including an
insurance carrier participating in the pilot project, may, but is
not required to, comply with the following laws and any related
commission rules:
(1) Section 413.011;
(2) Section 413.014; and
(3) Sections 413.031(a)-(c) and (f)-(l).
(p) This section expires September 1, 2007.
SECTION 3. The heading to Section 408.0222, Labor Code, is
amended to read as follows:
Sec. 408.0222. PARTICIPATION IN PILOT PROJECT [REGIONAL
NETWORK]; SELECTION OF DOCTOR WITHIN REGIONAL NETWORK; BENEFIT
INCENTIVES.
SECTION 4. Section 408.0222, Labor Code, is amended by
amending Subsections (a), (c) through (g), (h), (j), (m), (n), (o),
(q), (r), (s), and (u) and adding Subsection (v) to read as follows:
(a) In this section, "advisory committee," "regional
network," and "pilot project" have the meanings assigned by Section
408.0221 [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
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 a regional network
established under Section 408.0221. An insurance carrier who
elects to participate in regional networks agrees to abide by the
terms of the regional network contracts between the commission and
the regional networks].
(c) A health care provider participating in the pilot
project [a regional network 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.
(d) [An employee may elect to participate or not participate
in 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 pilot project [a regional network
established under Section 408.0221] may elect to participate in the
pilot project [that regional network]. An eligible employee may
elect to participate or not participate in the pilot project
[regional network] for each compensable injury sustained by the
employee. Except as provided by this section, the employee's
election to participate in the pilot project for an injury
occurring on or after the date the employee's insurance carrier
begins to participate in the pilot project [network] is effective
for all medical care related to that injury. 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.
(e) [Except as provided by Subsection (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
pilot project [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 (m); or
(2) the 14th day after the date on which the employee
receives health care from a regional network health care provider
for that injury.
(f) An employee may elect to participate in the pilot
project [a regional network 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 pilot project [a regional
network 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 (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 pilot project [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.
(g) An insurance carrier who elects to participate in the
pilot project [a regional network 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 pilot
project [a regional network], 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.
(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 the pilot project [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.
(j) Subsection (i) does not authorize a cause of action or
damages against the state, a state agency, or an employee of the
state other than 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 (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.
(m) An employee who elects to participate in the pilot
project [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.
(n) Except for emergency care, or as otherwise provided by
this section, an employee who elects to participate in the pilot
project [a regional network] 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 843.002, Insurance Code [2(g), Texas Health Maintenance
Organization Act (Article 20A.02, Vernon's Texas Insurance Code)].
(o) A health care provider who participates in the pilot
project [a regional network 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 (e).
(q) An employee who elects to participate in the pilot
project [a regional network 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.
(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) elects not to participate in the pilot project [a
regional network established under Section 408.0221]; or
(2) is not bound by the employee's election to
participate in the pilot project under Subsection (f) [is employed
by an employer for whom the insurance carrier has not elected to
participate in a regional network established under Section
408.0221].
(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.
(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, unwilling, or unable to
provide medical care to the employee; or
(5) a change of doctor required because of a change of
residence by the employee.
(v) This section expires September 1, 2007.
SECTION 5. Section 408.0223, Labor Code, is amended by
amending Subsections (c), (d), and (e) and adding Subsection (d-1)
to read as follows:
(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. This
subsection expires September 1, 2007.
(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.
(d-1) The Health Care Network Advisory Committee [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 workers' compensation health care
delivery networks pilot project pursuant to Section 408.0221(g).
This subsection expires September 1, 2007.
(e) On behalf of the Health Care Network Advisory Committee,
the [The] Texas Workers' Compensation Commission shall adopt rules,
as necessary, to implement additional standards for insurance
carrier networks. This subsection expires September 1, 2007.
SECTION 6. Subsection (b), Section 408.0222, Labor Code, is
repealed.
SECTION 7. The Health Care Network Advisory Committee shall
establish the regional workers' compensation health care delivery
networks pilot project as required by Section 408.0221, Labor Code,
as amended by this Act, as soon as practicable after the effective
date of this Act.
SECTION 8. This Act takes effect September 1, 2003.
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