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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 INSURANCE CONSUMER REPORT CARDS |
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Sec. 1301.301. DEFINITIONS. In this subchapter: |
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(1) "Allowables cap score" means the aggregate |
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percentage margin between the amount submitted on claims by |
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noncontracted physicians or providers and the preferred provider |
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benefit plan's allowable amount or usual and customary amounts it |
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is willing to pay. |
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(2) "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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(3) "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 for |
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all claims arising from the current reporting period and all prior |
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periods, minus the corresponding estimate made at the close of |
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business for the preceding period. This amount does not include |
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home office and overhead costs, advertising costs, commissions and |
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other acquisition costs, taxes, capital costs, administrative |
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costs, utilization review costs, or claims processing costs. |
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(4) "Direct losses paid" means the sum of all payments |
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made during the period for claimants under a preferred provider |
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benefit plan before reinsurance has been ceded or assumed. This |
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amount does not include home office and 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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(5) "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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period before reinsurance has been ceded or assumed. |
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(6) "Expected profit score" is the percentage of the |
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premium dollar that represents the actuarially set allowance for |
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profit. |
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(7) "Justified complaint" means a complaint submitted |
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to the department with regard to which the department determines |
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that there is an apparent violation of a policy provision, contract |
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provision, rule, or statute or that there is a reasonable |
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likelihood that a prudent layperson would regard the act as giving |
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rise to the complaint as a practice or service that is below the |
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standard of customary business practice. |
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(8) "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. |
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(9) "Premium to direct patient care score" means |
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direct losses incurred divided by direct premiums earned. |
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Sec. 1301.302. PUBLIC REPORT CARD. The commissioner shall |
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develop and issue an annual insurance consumer report card that |
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publicizes the scores as provided by this subchapter. The report |
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card shall be in a format that will permit direct comparison of |
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preferred provider benefit plans offered by insurers. |
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Sec. 1301.303. REPORT CARD SCORES. (a) The annual |
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insurance consumer report card must include 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 covered persons 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 annual insurance consumer report card must contain a |
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plain language explanation of the scores understandable to the |
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average layperson. |
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Sec. 1301.304. RULEMAKING. The commissioner shall adopt |
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rules as necessary to implement this subchapter, including rules |
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governing the filing of any financial report or information |
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necessary for the annual insurance consumer 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 that the annual insurance consumer report |
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cards are accessible to the public on the department's Internet |
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website; |
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(2) provide the report cards to each member of a |
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health-related or insurance-related legislative committee; |
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(3) provide a copy of the report cards to each member |
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of the public who submits a written request; and |
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(4) provide copies of the report cards to public |
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libraries throughout this state that request copies. |
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(b) The commissioner shall issue a press release |
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publicizing the annual issuance of the insurance consumer report |
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cards. |
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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 CONSUMER |
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REPORT CARDS |
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Sec. 843.501. DEFINITIONS. In this subchapter: |
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(1) "Allowables cap score" means the aggregate |
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percentage margin between the amount submitted on claims by |
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|
noncontracted physicians or providers and the health maintenance |
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|
organization's allowable amount or usual and customary amounts it |
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|
is willing to pay. |
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|
(2) "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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(3) "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 for |
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all claims arising from the current reporting period and all prior |
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|
periods, minus the corresponding estimate made at the close of |
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|
business for the preceding period. This amount does not include |
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|
home office and overhead costs, advertising costs, commissions and |
|
|
other acquisition costs, taxes, capital costs, administrative |
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|
costs, utilization review costs, or claims processing costs. |
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(4) "Direct losses paid" means the sum of all payments |
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made during the period for claimants before reinsurance has been |
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ceded or assumed. This amount does not include home office and |
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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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(5) "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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|
period before reinsurance has been ceded or assumed. |
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|
(6) "Expected profit score" is the percentage of the |
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|
premium dollar that represents the actuarially set allowance for |
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|
profit. |
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(7) "Justified complaint" means a complaint submitted |
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to the department with regard to which the department determines |
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that there is an apparent violation of a policy provision, evidence |
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of coverage, contract provision, rule, or statute or that there is a |
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reasonable likelihood that a prudent layperson would regard the act |
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giving rise to the complaint as a practice or service that is below |
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the standard of customary business practice. |
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(8) "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. |
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(9) "Premium to direct patient care score" means |
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direct losses incurred divided by direct premiums earned. |
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Sec. 843.502. PUBLIC REPORT CARD. (a) The commissioner |
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shall develop and issue an annual health maintenance organization |
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consumer report card that publicizes the scores as provided in this |
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subchapter. The report card shall be in a format that will permit |
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direct comparison of health maintenance organizations. |
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(b) The annual health maintenance organization consumer |
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report card required by this subchapter shall be developed and |
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disseminated in consultation with the office of public insurance |
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counsel along with any report card mandated under 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 information |
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reported by health maintenance organizations as requested for the |
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purposes of this subchapter. |
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Sec. 843.503. REPORT CARD SCORES. (a) The annual health |
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maintenance organization consumer 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 allowables cap score; |
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(5) an expected profit score; |
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(6) the number of enrollees in each health maintenance |
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organization; |
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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 annual health maintenance organization consumer |
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report card must contain a plain language explanation of the scores |
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understandable to the average layperson. |
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Sec. 843.504. RULEMAKING. The commissioner shall adopt |
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rules as necessary to implement this subchapter, including rules |
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governing the filing of any financial report or information |
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necessary for the annual health maintenance organization report |
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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 that the annual health maintenance |
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organization consumer report cards are accessible to the public on |
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the department's Internet website; |
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(2) provide the report cards to each member of a |
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health-related legislative committee and each member of an |
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insurance-related legislative committee; |
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(3) provide a copy of the report cards to each member |
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of the public who submits a written request; and |
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(4) provide copies of the report cards to public |
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libraries throughout this state that request copies. |
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(b) The commissioner shall issue a press release |
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publicizing the annual issuance of the health maintenance |
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organization consumer report cards. |
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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. |