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A BILL TO BE ENTITLED
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AN ACT
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relating to the creation of consumer report cards for the |
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comparison of health care plans. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Chapter 1301, Insurance Code, is amended by |
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adding Subchapter F to read as follows: |
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SUBCHAPTER F. ANNUAL PREFERRED PROVIDER BENEFIT PLAN REPORT CARDS |
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Sec. 1301.301. DEFINITIONS. In this subchapter: |
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(1) "Direct losses incurred" means the sum of direct |
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losses paid, plus an estimate of losses to be paid in the future, |
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for all claims arising from the current reporting period and all |
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prior reporting periods, minus the corresponding estimate made at |
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the close of business for the preceding reporting period. The term |
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does not include home office and other overhead costs, advertising |
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costs, commissions and other acquisition costs, taxes, capital |
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costs, administrative costs, utilization review costs, or claims |
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processing costs. |
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(2) "Direct losses paid" means the sum of all payments |
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made during the reporting period for claimants under a preferred |
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provider benefit plan before reinsurance has been ceded or assumed. |
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The term does not include home office and other overhead costs, |
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advertising costs, commissions and other acquisition costs, taxes, |
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capital costs, administrative costs, utilization review costs, or |
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claims processing costs. |
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(3) "Direct premiums earned" means the amount of |
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premium attributable to the coverage already provided in a given |
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reporting period before reinsurance has been ceded or assumed. |
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(4) "Premium to direct patient care score" means |
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direct losses incurred divided by direct premiums earned. |
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(5) "Network adequacy score" means the total number of |
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claims paid as out-of-network by a preferred provider benefit plan |
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divided by the total number of claims paid by the preferred provider |
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benefit plan. |
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(6) "Claims paid score" means the total dollar amount |
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paid by the preferred provider benefit plan as out-of-network |
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divided by the total dollar amount of claims paid by the preferred |
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provider benefit plan. |
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(7) "Allowables cap score" means the aggregate |
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percentage margin between the amount submitted on claims by |
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non-contracted physicians or providers and the preferred provider |
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benefit plan's allowable amount or the usual and customary amounts |
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the preferred provider benefit plan is willing to pay. |
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(8) "Expected profit score" means the percentage of |
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the premium dollar that represents the actuarially set allowance |
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for profit. |
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(9) "Justified complaint" means a complaint submitted |
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to the department for which the department determines there exists: |
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(A) a violation of a policy provision, contract |
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provision, rule, or statute; or |
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(B) a valid concern that a prudent layperson |
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would regard as customary a practice or service that is below |
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customary business practice. |
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Sec. 1301.302. REPORT CARD. The commissioner shall develop |
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and issue an annual preferred provider benefit plan report card |
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that publicizes the scores described by Section 1301.303. The |
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report card must be in a format that permits direct comparison of |
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preferred provider benefit plans offered by insurers. |
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Sec. 1301.303. SCORES. (a) The report card must include |
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the following: |
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(1) a premium to direct patient care score; |
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(2) a network adequacy score; |
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(3) a claims paid score; |
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(4) an allowables cap score; |
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(5) an expected profit score; |
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(6) the number of persons covered for each preferred |
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provider benefit plan; |
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(7) the total dollar amount of premiums earned by the |
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preferred provider benefit plan; and |
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(8) the number of justified complaints. |
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(b) The report card must contain a plain-language |
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explanation of the scores that is understandable to the average |
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layperson. |
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Sec. 1301.304. RULEMAKING. The commissioner shall adopt |
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rules in the manner prescribed by Subchapter A, Chapter 36, as |
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necessary to implement this subchapter, including rules governing |
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the filing of any financial reports or other information necessary |
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for the annual report cards. |
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Sec. 1301.305. PUBLICATION AND PUBLICITY. (a) The |
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commissioner shall: |
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(1) ensure the annual preferred provider benefit plan |
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report cards are accessible to the public on the department's |
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Internet website; |
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(2) provide the annual preferred provider benefit plan |
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report cards to each member of each committee of the house of |
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representatives or the senate that has jurisdiction over issues |
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concerning health or insurance; |
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(3) provide a copy of the annual preferred provider |
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benefit plan report card to each member of the public who submits a |
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written request; and |
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(4) provide copies of the annual preferred provider |
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benefit plan report card to public libraries throughout this state |
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that request copies. |
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(b) The commissioner shall issue a press release when the |
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annual report cards are issued under this subchapter. |
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SECTION 2. Chapter 843, Insurance Code, is amended by |
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adding Subchapter O to read as follows: |
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SUBCHAPTER O. ANNUAL HEALTH MAINTENANCE ORGANIZATION REPORT CARDS |
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Sec. 843.501. DEFINITIONS. In this subchapter: |
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(1) "Direct losses incurred" means the sum of direct |
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|
losses paid, plus an estimate of losses to be paid in the future, |
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|
for all claims arising from the current reporting period and all |
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|
prior reporting periods, minus the corresponding estimate made at |
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|
the close of business for the preceding reporting period. The term |
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does not include home office and other overhead costs, advertising |
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|
costs, commissions and other acquisition costs, taxes, capital |
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costs, administrative costs, utilization review costs, or claims |
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|
processing costs. |
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(2) "Direct losses paid" means the sum of all payments |
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made during the reporting period for claimants before reinsurance |
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has been ceded or assumed. The term does not include home office |
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and other overhead costs, advertising costs, commissions and other |
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acquisition costs, taxes, capital costs, administrative costs, |
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utilization review costs, or claims processing costs. |
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(3) "Direct premiums earned" means the amount of |
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premium attributable to the coverage already provided in a given |
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|
reporting period before reinsurance has been ceded or assumed. |
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|
(4) "Premium to direct patient care score" means |
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direct losses incurred divided by direct premiums earned. |
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(5) "Network adequacy score" means the sum of the |
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total number of claims paid as out-of-network by a health |
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maintenance organization and paid under a point-of-service rider |
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divided by the total number of claims paid by the health maintenance |
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organization. |
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(6) "Claims paid score" means the sum of the total |
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dollar amount paid by the health maintenance organization as |
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out-of-network and the total dollar amount paid under a |
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point-of-service rider divided by the total dollar amount of claims |
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paid by the health maintenance organization, including amounts paid |
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under a point-of-service rider. |
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(7) "Allowables cap score" means the aggregate |
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percentage margin between the amount submitted on claims by |
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non-contracted physicians or providers and the health maintenance |
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organization's allowable amount or the usual and customary amounts |
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the health maintenance organization is willing to pay. |
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(8) "Expected profit score" means the percentage of |
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the premium dollar that represents the actuarially set allowance |
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|
for profit. |
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(9) "Justified complaint" means a complaint submitted |
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to the department for which the department determines there exists: |
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(A) a violation of an evidence of coverage |
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provision, contract provision, rule, or statute; or |
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(B) a valid concern that a prudent layperson |
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would regard as customary a practice or service that is below |
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customary business practice. |
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Sec. 843.502. REPORT CARD. (a) The commissioner shall |
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develop and issue an annual health maintenance organization report |
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card that publicizes the scores described by Section 843.503. The |
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report card must be in a format that permits direct comparison of |
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health maintenance organizations. |
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(b) The department shall develop and issue the annual health |
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maintenance organization report card required under this |
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subchapter in consultation with the Office of Public Insurance |
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Counsel and in addition to any report card issued under Subchapter |
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F, Chapter 501. |
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(c) In addition to any other authority granted by this code, |
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the Office of Public Insurance Counsel is entitled to obtain the |
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information reported by health maintenance organizations to the |
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department under this subchapter. |
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Sec. 843.503. SCORES. (a) The report card must include the |
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following: |
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(1) a premium to direct patient care score; |
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(2) a network adequacy score; |
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(3) a claims paid score; |
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(4) an allowable cap score; |
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(5) an expected profit score; |
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(6) the number of enrollees; |
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(7) the total dollar amount of premiums earned; and |
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(8) the number of justified complaints. |
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(b) The report card must contain a plain-language |
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explanation of the scores that is understandable to the average |
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layperson. |
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Sec. 843.504. RULEMAKING. The commissioner shall adopt |
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rules in the manner prescribed by Subchapter A, Chapter 36, as |
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|
necessary to implement this subchapter, including rules governing |
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|
the filing of any financial reports or other information necessary |
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|
for the annual report cards. |
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Sec. 843.505. PUBLICATION AND PUBLICITY. (a) The |
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commissioner shall: |
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(1) ensure the annual health maintenance organization |
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report cards are accessible to the public on the department's |
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|
Internet website; |
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|
(2) provide the annual health maintenance |
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organization report cards to each member of each committee of the |
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house of representatives or the senate that has jurisdiction over |
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|
issues concerning health or insurance; |
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|
(3) provide a copy of the annual health maintenance |
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organization report cards to each member of the public who submits a |
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written request; and |
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(4) provide copies of the annual health maintenance |
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organization report cards to public libraries throughout this state |
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that request copies. |
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(b) The commissioner shall issue a press release when the |
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annual report cards are issued under this subchapter. |
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SECTION 3. This Act takes effect immediately if it receives |
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a vote of two-thirds of all the members elected to each house, as |
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provided by Section 39, Article III, Texas Constitution. If this |
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Act does not receive the vote necessary for immediate effect, this |
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Act takes effect September 1, 2007. |