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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