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79R6423 DLF-D
By: Averitt S.B. No. 809
A BILL TO BE ENTITLED
AN ACT
relating to the Texas Health Insurance Risk Pool.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 1506.002(b), Insurance Code, as
effective April 1, 2005, is amended to read as follows:
(b) In this chapter, "health benefit plan" does not include:
(1) short-term insurance;
(2) accident insurance;
(3) a plan providing coverage only for dental or
vision care;
(4) fixed indemnity insurance, including hospital
indemnity insurance;
(5) [(2)] credit insurance;
(6) [(3)] long-term care insurance;
(7) [(4)] disability income insurance;
(8) other limited benefit coverage, including
specified disease coverage;
(9) [(5)] coverage issued as a supplement to liability
insurance;
(10) [(6)] insurance arising out of a workers'
compensation law or similar law;
(11) [(7)] automobile medical payment insurance; or
(12) [(8)] insurance coverage under which benefits
are payable with or without regard to fault and that is statutorily
required to be contained in a liability insurance policy or
equivalent self-insurance.
SECTION 2. Section 1506.109(a), Insurance Code, as
effective April 1, 2005, is amended to read as follows:
(a) The pool shall [may] provide for and use cost
containment measures and requirements to make the coverage offered
by the pool more cost-effective. The cost containment measures must
include individual case management, disease management, and a
mail-order prescription drug program in accordance with Section
1506.161 and may include [, including] preadmission screening, the
requirement of a second surgical opinion, and concurrent
utilization review subject to Article 21.58A[, and individual case
management, to make the coverage offered by the pool more
cost-effective].
SECTION 3. Section 1506.152(a), Insurance Code, as
effective April 1, 2005, is amended to read as follows:
(a) An individual who is a legally domiciled resident of
this state is eligible for coverage from the pool if the individual:
(1) provides to the pool evidence that the individual
maintained health benefit plan coverage for the preceding 18 months
with no gap in coverage longer than 63 days and with the most recent
coverage being provided through an employer-sponsored plan, church
plan, or government plan;
(2) provides to the pool evidence that the individual
maintained health benefit plan coverage under another state's
qualified Health Insurance Portability and Accountability Act
health program that was terminated because the individual did not
reside in that state and submits an application for pool coverage
not later than the 63rd day after the date the coverage described by
this subdivision was terminated;
(3) has been a legally domiciled resident of this
state for the preceding 30 days, is a citizen of the United States
or has been a permanent resident of the United States for at least
three continuous years, and provides to the pool:
(A) a notice of rejection of, or refusal to
issue, substantially similar individual health benefit plan
coverage from a health benefit plan issuer, other than an insurer
that offers only stop-loss, excess loss, or reinsurance coverage,
if the rejection or refusal was for health reasons;
(B) certification from an agent or salaried
representative of a health benefit plan issuer that states that the
agent or salaried representative cannot obtain substantially
similar individual coverage for the individual from any health
benefit plan issuer that the agent or salaried representative
represents because, under the underwriting guidelines of the health
benefit plan issuer, the individual will be denied coverage as a
result of a medical condition of the individual;
(C) an offer to issue substantially similar
individual coverage only with conditional riders; or
(D) [a notice of refusal by a health benefit plan
issuer to issue substantially similar individual coverage except at
a rate exceeding the pool rate; or
[(E)] a diagnosis of the individual with one of
the medical or health conditions on the list adopted under Section
1506.154; or
(4) provides to the pool evidence that, on the date of
application to the pool, the individual is certified as eligible
for trade adjustment assistance or for pension benefit guaranty
corporation assistance, as provided by the Trade Adjustment
Assistance Reform Act of 2002 (Pub. L. No. 107-210).
SECTION 4. Section 1506.155(a), Insurance Code, as
effective April 1, 2005, is amended to read as follows:
(a) Except as provided by this section and Section 1506.056,
pool coverage excludes charges or expenses incurred before the
first anniversary of the effective date of coverage with regard to
any condition for which:
(1) the existence of symptoms would cause an
ordinarily prudent person to seek diagnosis, care, or treatment
within the six-month period preceding the effective date of
coverage; or
(2) medical advice, care, or treatment was recommended
or received during the six-month period preceding the effective
date of coverage.
SECTION 5. Subchapter D, Chapter 1506, Insurance Code, as
effective April 1, 2005, is amended by adding Sections 1506.160 and
1506.161 to read as follows:
Sec. 1506.160. REIMBURSEMENT RATES. The health benefit
coverage provided by the pool must provide payment or reimbursement
for covered benefits to physicians and other health care providers
at the lesser of:
(1) the rate specified in the contract between the
physician and other health care provider and the pool or a preferred
provider organization or health maintenance organization
established by or contracting with the pool; or
(2) the applicable Medicare allowable rate.
Sec. 1506.161. MAIL-ORDER REQUIREMENT FOR CERTAIN
PRESCRIPTION DRUGS. (a) In this section, "maintenance drug" means
a drug that is prescribed over a period of time for a chronic or
continuing condition, as determined under rules adopted by the
board with the approval of the commissioner.
(b) If the board determines it is cost-effective to provide
prescription drugs through a mail-order prescription drug program,
the board shall establish a mail-order prescription drug program.
Under the program, a covered individual must purchase maintenance
drugs through the program. Maintenance drugs purchased through the
program must be purchased in sufficient quantity to provide the
covered individual a 90-day supply of the purchased drug.
SECTION 6. Subchapter F, Chapter 1506, Insurance Code, as
effective April 1, 2005, is amended by adding Section 1506.2522 to
read as follows:
Sec. 1506.2522. ANNUAL REPORT TO BOARD: ENROLLED
INDIVIDUALS. (a) Each health benefit plan issuer shall report to
the board the number of residents of this state enrolled, as of
December 31 of the previous year, in the issuer's health benefit
plans offered in this state, as:
(1) an employee or retired employee under a group
health benefit plan; or
(2) an individual policyholder or subscriber.
(b) In determining the number of individuals to report under
Subsection (a)(1), the health benefit plan issuer shall include
each employee or retired employee for whom a premium is paid and
coverage is provided under an excess loss, stop-loss, or
reinsurance policy issued by the issuer to an employer or group
health benefit plan in this state. A health benefit plan issuer
providing excess loss insurance, stop-loss insurance, or
reinsurance, as described by this subsection, may exclude from the
reported number each individual who is reported by the primary
carrier or primary reinsurer.
(c) In determining the number of individuals to report under
this section, the health benefit plan issuer shall exclude:
(1) the dependents of the employee or retired employee
or an individual policyholder or subscriber; and
(2) individuals who are covered by the health benefit
plan issuer under a Medicare supplement benefit plan subject to
Chapter 1652.
SECTION 7. Section 1506.253, Insurance Code, as effective
April 1, 2005, is amended to read as follows:
Sec. 1506.253. ASSESSMENTS TO COVER NET LOSSES. (a) The
board shall recover any net loss of the pool by assessing each
health benefit plan issuer an amount determined annually by the
board based on information in annual statements, the health benefit
plan issuer's annual report to the board under Sections [Section]
1506.2521 and 1506.2522, and any other reports required by and
filed with the board.
(b) To compute the [The] amount of a health benefit plan
issuer's assessment, if any, the board shall:
(1) divide the total amount to be assessed by the total
number of enrolled individuals reported by all health benefit plan
issuers under Section 1506.2522 as of the preceding December 31 to
determine the per capita amount; and
(2) multiply the number of enrolled individuals
reported by the health benefit plan issuer under Section 1506.2522
as of the preceding December 31 by the per capita amount to
determine the amount assessed to that health benefit plan issuer
[is computed by multiplying the total amount required to be
assessed against all health benefit plan issuers by a number
computed by dividing:
[(1) the gross premiums collected by the issuer for
health benefit plans in this state during the preceding calendar
year; by
[(2) the gross premiums collected by all issuers for
health benefit plans in this state during the preceding calendar
year].
(c) A [For purposes of the assessment under this subchapter,
gross health benefit plan premiums do not include premiums
collected for:
[(1) coverage under a Medicare supplement benefit plan
subject to Chapter 1652;
[(2) coverage under a] small employer health benefit
plan subject to Subchapters A-H, Chapter 1501, is not subject to an
assessment under this subchapter[; or
[(3) coverage or insurance listed in Section
1506.002(b)].
SECTION 8. Chapter 1506, Insurance Code, as effective April
1, 2005, is amended by adding Subchapter G to read as follows:
SUBCHAPTER G. SUBROGATION RIGHTS OF POOL
Sec. 1506.301. SUBROGATION TO RIGHTS AGAINST THIRD PARTY.
The pool:
(1) is subrogated to the rights of an individual
covered by the pool to recover against a third party costs for an
injury or illness for which the third party is liable under
contract, tort law, or other law that have been paid by the pool on
behalf of the covered individual; and
(2) may enforce that liability on behalf of the
individual.
Sec. 1506.302. BENEFITS NOT PAYABLE; ADVANCE OF BENEFITS
AUTHORIZED. (a) Under coverage provided by the pool, benefits are
not payable for an injury or illness for which a third party may be
liable under contract, tort law, or other law.
(b) Notwithstanding Subsection (a), the pool may advance to
a covered individual the benefits provided under the pool coverage
for medical expenses resulting from the injury or illness, subject
to the pool's right to subrogation and reimbursement under this
subchapter.
Sec. 1506.303. REIMBURSEMENT OF POOL REQUIRED. (a)
Subject to Section 1506.305, the amount recovered by a covered
individual in an action against a third party who is liable for the
injury or illness must be used to reimburse the pool for benefits
for medical expenses that have been advanced under Section
1506.302.
(b) The amount of reimbursement required by this section is
not reduced by the application of the doctrine established at
common law relating to adequate compensation of insureds and
commonly referred to as the "made whole" doctrine.
(c) Subject to Section 1506.305, the pool shall treat any
amount recovered by a covered individual in an action against a
third party who is liable for the injury or illness that exceeds the
amount of the reimbursement required under this section as an
advance against future medical benefits for the injury or illness
that the individual would otherwise be entitled to receive under
pool coverage.
Sec. 1506.304. RESUMPTION OF PAYMENT OF BENEFITS. If the
amount treated as an advance under Section 1506.303(c) is adequate
to cover all future medical costs for the covered individual's
injury or illness, the pool is not required to resume the payment of
benefits. If the advance is insufficient, the pool shall resume the
payment of benefits when the advance is exhausted.
Sec. 1506.305. ATTORNEY'S FEE FOR REPRESENTATION OF POOL'S
INTEREST. (a) For purposes of this section, the pool's recovery
includes:
(1) the amount recovered by the pool in the action; and
(2) the amount of the covered individual's total
recovery that must be used to reimburse the pool or that is treated
as an advance for future medical costs under Section 1506.303(c).
(b) If the pool's interest is not actively represented by an
attorney in a third-party action under this subchapter, the pool
shall pay a fee to an attorney representing the claimant in the
amount agreed on between the attorney and the pool. In the absence
of an agreement, the court shall award to the attorney payable out
of the pool's recovery:
(1) a reasonable fee for recovery of the pool's
interest that may not exceed one-third of the pool's recovery; and
(2) a proportionate share of the reasonable expenses
incurred.
(c) An attorney who represents a covered individual and is
also to represent the interests of the pool under this subchapter
must make a full written disclosure to the covered individual
before employment as an attorney by the pool. The covered
individual must acknowledge the disclosure and consent to the
representation. A signed copy of the disclosure shall be provided
to the covered individual and the pool. A copy of the disclosure
with the covered individual's consent must be filed with the
pleading before a judgment is entered and approved by the court.
The attorney may not receive a fee under this section to which the
attorney is otherwise entitled under an agreement with the pool
unless the attorney complies with the requirements of this
subsection.
(d) If an attorney actively representing the pool's
interest actively participates in obtaining a recovery, the court
shall award and apportion between the covered individual's and the
pool's attorneys a fee payable out of the pool's subrogation
recovery. In apportioning the award, the court shall consider the
benefit accruing to the pool as a result of each attorney's service.
The total attorney's fees may not exceed one-third of the pool's
recovery.
SECTION 9. (a) This Act applies only to an application for
initial or renewal coverage through the Texas Health Insurance Risk
Pool under Chapter 1506, Insurance Code, as amended by this Act,
that is filed with that pool on or after the effective date of this
Act. An application filed before the effective date of this Act is
governed by the law in effect on the date on which the application
was filed, and the former law is continued in effect for that
purpose.
(b) Section 1506.155, Insurance Code, as amended by this
Act, and Subchapter G, Chapter 1506, Insurance Code, as added by
this Act, apply only to pool coverage that is delivered, issued for
delivery, or renewed on or after the effective date of this Act.
Pool coverage that is delivered, issued for delivery, or renewed
before the effective date of this Act is governed by the law as it
existed immediately before that date, and that law is continued in
effect for that purpose.
(c) This Act applies only to an assessment under Subchapter
F, Chapter 1506, Insurance Code, as amended by this Act, that is
made on or after the effective date of this Act. An assessment made
before the effective date of this Act is governed by the law in
effect on the date on which the assessment was made, and the former
law is continued in effect for that purpose.
SECTION 10. (a) In accordance with Section 311.031(c),
Government Code, which gives effect to a substantive amendment
enacted by the same legislature that codifies the amended statute,
the text of Section 1506.002(b), Insurance Code, as set out in
Section 1 of this Act, Section 1506.152(a), Insurance Code, as set
out in Section 3 of this Act, and Sections 1506.253(a) and (c),
Insurance Code, as set out in Section 7 of this Act, gives effect to
changes made by Sections 1, 6, and 11, Chapter 840, Acts of the 78th
Legislature, Regular Session, 2003.
(b) To the extent of any conflict, this Act prevails over
another Act of the 79th Legislature, Regular Session, 2005,
relating to nonsubstantive additions to and corrections in enacted
codes.
SECTION 11. This Act takes effect September 1, 2005.