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A BILL TO BE ENTITLED
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AN ACT
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relating to the regulation of discount health care programs by the |
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Texas Department of Insurance; providing penalties. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Subtitle C, Title 5, Insurance Code, is amended |
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by adding Chapter 562 to read as follows: |
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CHAPTER 562. UNFAIR METHODS OF COMPETITION AND |
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UNFAIR OR DECEPTIVE ACTS OR PRACTICES REGARDING |
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DISCOUNT HEALTH CARE PROGRAMS |
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SUBCHAPTER A. GENERAL PROVISIONS |
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Sec. 562.001. PURPOSE. The purpose of this chapter is to |
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regulate trade practices in the business of discount health care |
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programs by: |
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(1) defining or providing for the determination of |
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trade practices in this state that are unfair methods of |
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competition or unfair or deceptive acts or practices; and |
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(2) prohibiting those unfair or deceptive trade |
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practices. |
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Sec. 562.002. DEFINITIONS. In this chapter: |
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(1) "Discount health care program" means a business |
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arrangement or contract in which an entity, in exchange for fees, |
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dues, charges, or other consideration, offers its members access to |
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discounts on health care services provided by health care |
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providers. The term does not include an insurance policy, a |
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certificate of coverage, or a self-funded or self-insured employee |
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benefit plan. |
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(2) "Discount health care program operator" means a |
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person who, in exchange for fees, dues, charges, or other |
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consideration, operates a discount health care program and |
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contracts with providers, provider networks, or other discount |
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health care program operators to offer access to health care |
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services at a discount and determines the charge to members. |
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(3) "Health care services" includes physician care, |
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inpatient care, hospital surgical services, emergency services, |
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ambulance services, laboratory services, audiology services, |
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dental services, vision services, mental health services, |
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substance abuse services, chiropractic services, and podiatry |
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services, and the provision of medical equipment and supplies, |
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including prescription drugs. |
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(4) "Knowingly" means with actual awareness of the |
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falsity, unfairness, or deceptiveness of the act or practice on |
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which a claim for damages under this chapter is based. Actual |
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awareness may be inferred if any objective manifestations indicate |
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that a person acted with actual awareness. |
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(5) "Marketer" means a person who sells or |
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distributes, or offers to sell or distribute, a discount health |
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care program, including a private label entity that places its name |
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on and markets or distributes a discount health care program, but |
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does not operate a discount health care program. |
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(6) "Member" means a person who pays fees, dues, |
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charges, or other consideration for the right to participate in a |
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discount health care program. |
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(7) "Person" means an individual, corporation, |
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association, partnership, or other legal entity. |
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(8) "Program operator" means a discount health plan |
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program operator. |
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(9) "Provider" means a person who is licensed or |
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otherwise authorized to provide health care services in this state. |
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Sec. 562.003. VENUE FOR ACTIONS INVOLVING DEPARTMENT OR |
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COMMISSIONER. An action under this chapter in which the department |
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or commissioner is a party must be brought in a district court in |
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Travis County. |
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Sec. 562.004. APPLICABILITY. Except as otherwise provided |
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by this chapter, a program operator, including the operator of a |
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freestanding discount health care program or a discount health care |
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program marketed by an insurer or a health maintenance |
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organization, shall comply with this chapter. |
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Sec. 562.005. LIBERAL CONSTRUCTION. This chapter shall be |
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liberally construed and applied to promote the underlying purposes |
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as provided by Section 562.001. |
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[Sections 562.006-562.050 reserved for expansion] |
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SUBCHAPTER B. UNFAIR METHODS OF COMPETITION AND |
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UNFAIR OR DECEPTIVE ACTS OR PRACTICES DEFINED |
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Sec. 562.051. MISREPRESENTATION REGARDING DISCOUNT HEALTH |
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CARE PROGRAM. It is an unfair method of competition or an unfair or |
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deceptive act or practice in the business of discount health care |
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|
programs to: |
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(1) knowingly misrepresent the price range of |
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|
discounts offered by the discount health care program; |
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(2) knowingly misrepresent the size or location of the |
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program's network of providers; |
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(3) knowingly misrepresent the participation of a |
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provider in the program's network; |
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(4) suggest that a discount card offered through the |
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program is a federally approved Medicare prescription discount |
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card; |
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(5) use the term "insurance," except as: |
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(A) a disclaimer of any relationship between the |
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discount health care program and insurance; or |
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(B) a description of an insurance product |
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|
connected with a discount health care program; or |
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(6) use the term "health plan," "coverage," "copay," |
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"copayments," "deductible," "preexisting conditions," "guaranteed |
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issue," "premium," "PPO," or "preferred provider organization," or |
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another similar term, in a manner that could reasonably mislead an |
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individual into believing that the discount health care program is |
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health insurance or provides coverage similar to health insurance. |
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Sec. 562.052. FALSE INFORMATION AND ADVERTISING. (a) It |
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is an unfair method of competition or an unfair or deceptive act or |
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practice in the business of discount health care programs to make, |
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publish, disseminate, circulate, or place before the public or |
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directly or indirectly cause to be made, published, disseminated, |
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circulated, or placed before the public advertisements, |
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|
solicitations, or marketing materials containing an untrue, |
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|
deceptive, or misleading assertion, representation, or statement |
|
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regarding the discount health care program. |
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(b) This section applies to an advertisement, solicitation, |
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|
or marketing material made, published, disseminated, circulated, |
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|
or placed before the public: |
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(1) in a newspaper, magazine, or other publication; |
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|
(2) in a notice, circular, pamphlet, letter, or |
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|
poster; |
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(3) over a radio or television station; |
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(4) through the Internet; or |
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(5) in any other manner. |
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Sec. 562.053. FAILURE TO REGISTER OR RENEW REGISTRATION; |
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FALSE REGISTRATION OR RENEWAL STATEMENT. It is an unfair method of |
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competition or an unfair or deceptive act or practice in the |
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|
business of discount health care programs to: |
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(1) fail to register or renew registration as required |
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under Chapter 7001; or |
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(2) with intent to deceive: |
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(A) file with the department a false statement in |
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|
connection with an application for registration as a program |
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|
operator under Chapter 7001; or |
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(B) file with the department a false statement in |
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|
connection with an application for renewal of a registration as a |
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program operator under Chapter 7001. |
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Sec. 562.054. MISREPRESENTATION OF DISCOUNT HEALTH CARE |
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PROGRAMS. It is an unfair method of competition or an unfair or |
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|
deceptive act or practice in the business of discount health care |
|
|
programs to misrepresent a discount health care program by: |
|
|
(1) making an untrue statement of material fact; |
|
|
(2) failing to state a material fact necessary to make |
|
|
other statements made not misleading, considering the |
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|
circumstances under which the statements were made; |
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(3) making a statement in a manner that would mislead a |
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|
reasonably prudent person to a false conclusion of a material fact; |
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|
(4) making a material misstatement of law; or |
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|
(5) failing to disclose a matter required by law to be |
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|
disclosed, including failing to make an applicable disclosure |
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required by this code. |
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[Sections 562.055-562.100 reserved for expansion] |
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SUBCHAPTER C. REGULATION OF PRACTICES |
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Sec. 562.101. UNFAIR METHODS OF COMPETITION AND UNFAIR OR |
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DECEPTIVE ACTS OR PRACTICES PROHIBITED. A person may not engage in |
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this state in a trade practice that is defined in this chapter as or |
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determined under this chapter to be an unfair method of competition |
|
|
or an unfair or deceptive act or practice in the business of |
|
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discount health care programs. |
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Sec. 562.102. PROHIBITED CONTENT OF CERTAIN DISCOUNT HEALTH |
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CARE PROGRAM ADVERTISING, SOLICITATION, OR MARKETING. |
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Notwithstanding any other provision of this code, it is unlawful |
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|
for a program operator or marketer to advertise, solicit, or market |
|
|
a discount health care program containing the words "approved by |
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the Texas Department of Insurance" or words with a similar meaning. |
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Sec. 562.103. PROGRAM OPERATOR DUTIES. (a) A program |
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|
operator shall: |
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(1) provide a toll-free telephone number and Internet |
|
|
website for members to obtain information about the discount health |
|
|
care program and confirm or find providers currently participating |
|
|
in the program; and |
|
|
(2) remove a provider from the discount health care |
|
|
program not later than the 30th day after the date the program |
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|
operator learns that the provider is no longer participating in the |
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|
program or has lost the authority to provide services or products. |
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(b) A program operator shall issue at least one membership |
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|
card to serve as proof of membership in the discount health care |
|
|
program that must: |
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(1) contain a clear and conspicuous statement that the |
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|
discount health care program is not insurance; and |
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|
(2) if the discount health care program includes |
|
|
discount prescription drug benefits, include: |
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|
(A) the name or logo of the entity administering |
|
|
the prescription drug benefits; |
|
|
(B) the international identification number |
|
|
assigned by the American National Standards Institute for the |
|
|
entity administering the prescription drug benefits; |
|
|
(C) the group number applicable to the member; |
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|
and |
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(D) a telephone number to be used to contact an |
|
|
appropriate person to obtain information relating to the |
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prescription drug benefits provided under the program. |
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(c) Not later than the 15th day after the date of |
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|
enrollment, a program operator shall issue at least one set of |
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disclosure materials describing the terms and conditions of the |
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discount health care program to each household in which a person is |
|
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a member, including a statement that: |
|
|
(1) the discount health care program is not insurance, |
|
|
with the word "not" capitalized; |
|
|
(2) the member is required to pay the entire amount of |
|
|
the discounted rate; |
|
|
(3) the discount health care program does not |
|
|
guarantee the quality of the services or products offered by |
|
|
individual providers; and |
|
|
(4) if the member remains dissatisfied after |
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|
completing the discount health care program's complaint system, the |
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member may contact the member's state insurance department. |
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|
(d) A program operator shall ensure that an application form |
|
|
or other membership agreement: |
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|
(1) clearly and conspicuously discloses the duration |
|
|
of membership and the amount of payments the member is obligated to |
|
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make for the membership; and |
|
|
(2) contains a clear and conspicuous statement that |
|
|
the discount health care program is not insurance. |
|
|
(e) A program operator shall allow any member who cancels a |
|
|
membership in the discount health care program not later than the |
|
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30th day after the date the person becomes a member to receive a |
|
|
refund, not later than the 30th day after the date the program |
|
|
operator receives a valid cancellation notice and returned |
|
|
membership card, of all periodic membership charges paid by that |
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member to the program operator and the amount of any one-time |
|
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enrollment fee that exceeds $50. |
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(f) A program operator shall: |
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|
(1) maintain a surety bond, payable to the department |
|
|
for the use and benefit of members in a manner prescribed by the |
|
|
department, in the principal amount of $50,000, except that a |
|
|
program operator that is an insurer that holds a certificate of |
|
|
authority under Title 6 is not required to maintain the surety bond; |
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|
(2) maintain an agent for service of process in this |
|
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state; and |
|
|
(3) establish and operate a fair and efficient |
|
|
procedure for resolution of complaints regarding the availability |
|
|
of contracted discounts or services or other matters relating to |
|
|
the contractual obligations of the discount health care program to |
|
|
its members. |
|
|
Sec. 562.104. MARKETING OF PROGRAM. (a) A program operator |
|
|
may market directly or contract with marketers for the distribution |
|
|
of the program operator's discount health care programs. |
|
|
(b) A program operator shall enter into a written contract |
|
|
with a marketer before the marketer begins marketing, promoting, |
|
|
selling, or distributing the program operator's discount health |
|
|
care program. The contract must prohibit the marketer from using |
|
|
advertising, solicitations, other marketing materials, or discount |
|
|
cards that have not been approved in advance and in writing by the |
|
|
program operator. |
|
|
(c) A program operator must approve in writing before their |
|
|
use all advertisements, solicitations, or other marketing |
|
|
materials and all discount cards used by marketers to market, |
|
|
promote, sell, or distribute the discount health care program. |
|
|
(d) Each advertisement, solicitation, or marketing material |
|
|
of a discount health care program must clearly and conspicuously |
|
|
state that the discount health care program is not insurance. |
|
|
Sec. 562.105. CONTRACT REQUIREMENTS. (a) A program |
|
|
operator shall contract, directly or indirectly, with a provider |
|
|
offering discounted health care services or products under the |
|
|
discount health care program. The written contract must contain |
|
|
all of the following provisions: |
|
|
(1) a description of the discounts to be provided to a |
|
|
member; |
|
|
(2) a provision prohibiting the provider from charging |
|
|
a member more than the discounted rate agreed to in the written |
|
|
agreement with the provider; and |
|
|
(3) a provision requiring the provider to promptly |
|
|
notify the program operator if the provider no longer participates |
|
|
in the program or loses the authority to provide services or |
|
|
products. |
|
|
(b) The program operator may not charge or receive from a |
|
|
provider any fee or other compensation for entering into the |
|
|
agreement. |
|
|
(c) If the program operator contracts with a network of |
|
|
providers, the program operator shall obtain written assurance from |
|
|
the network that: |
|
|
(1) the network has a written agreement with each |
|
|
network provider that includes a discounted rate that is applicable |
|
|
to a program operator's discount health care program and contains |
|
|
all of the terms described in Subsection (a); and |
|
|
(2) the network is authorized to obligate the network |
|
|
providers to provide services to members of the discount health |
|
|
care program. |
|
|
(d) The program operator shall require the network to: |
|
|
(1) maintain and provide the program operator on a |
|
|
monthly basis an up-to-date list of providers in the network; and |
|
|
(2) promptly remove a provider from its network if the |
|
|
provider no longer participates or loses the authority to provide |
|
|
services or products. |
|
|
(e) The program operator shall maintain a copy of each |
|
|
written agreement the program operator has with a provider or a |
|
|
network for at least two years following termination of the |
|
|
agreement. |
|
|
[Sections 562.106-562.150 reserved for expansion] |
|
|
SUBCHAPTER D. DETERMINATION OF UNFAIR METHODS OF COMPETITION AND |
|
|
UNFAIR OR DECEPTIVE ACTS OR PRACTICES; ENFORCEMENT; SANCTIONS AND |
|
|
PENALTIES |
|
|
Sec. 562.151. EXAMINATION AND INVESTIGATION. The |
|
|
department may examine and investigate the affairs of a person |
|
|
engaged in the business of discount health care programs in this |
|
|
state to determine whether the person: |
|
|
(1) has or is engaged in an unfair method of |
|
|
competition or unfair or deceptive act or practice prohibited by |
|
|
this chapter; or |
|
|
(2) has violated Subchapter B or C. |
|
|
Sec. 562.152. STATEMENT OF CHARGES; NOTICE OF HEARING. (a) |
|
|
When the department has reason to believe that a person engaged in |
|
|
the business of discount health care programs in this state has |
|
|
engaged or is engaging in this state in an unfair method of |
|
|
competition or unfair or deceptive act or practice defined by |
|
|
Subchapter B or has violated Subchapter B or C and that a proceeding |
|
|
by the department regarding the charges is in the interest of the |
|
|
public, the department shall issue and serve on the person: |
|
|
(1) a statement of the charges; and |
|
|
(2) a notice of the hearing on the charges, including |
|
|
the time and place for the hearing. |
|
|
(b) The department may not hold the hearing before the sixth |
|
|
day after the date the notice required by Subsection (a)(2) is |
|
|
served. |
|
|
Sec. 562.153. HEARING. A person against whom charges are |
|
|
made under Section 562.152 is entitled at the hearing on the charges |
|
|
to have an opportunity to be heard and show cause why the department |
|
|
should not issue an order requiring the person to cease and desist |
|
|
from: |
|
|
(1) performing the unfair method of competition or |
|
|
unfair or deceptive act or practice described in the charges; or |
|
|
(2) violating Subchapter B or C. |
|
|
Sec. 562.154. HEARING PROCEDURES. (a) Nothing in this |
|
|
chapter requires the observance of formal rules of pleading or |
|
|
evidence at a hearing under this subchapter. |
|
|
(b) At a hearing under this subchapter, the department, on a |
|
|
showing of good cause, shall permit any person to intervene, |
|
|
appear, and be heard by counsel or in person. |
|
|
Sec. 562.155. RECORD OF HEARING. (a) At a hearing under |
|
|
this subchapter, the department may, and at the request of a party |
|
|
to the hearing shall, make a record of the proceedings and the |
|
|
evidence presented at the hearing. |
|
|
(b) If the department does not make a record and a person |
|
|
seeks judicial review of the decision made at the hearing, the |
|
|
department shall prepare a statement of the evidence and proceeding |
|
|
for use on review. |
|
|
Sec. 562.156. COMPLIANCE WITH SUBPOENA. (a) If a person |
|
|
refuses to comply with a subpoena issued in connection with a |
|
|
hearing under this subchapter or refuses to testify with respect to |
|
|
a matter about which the person may be lawfully interrogated, on |
|
|
application of the department, a district court in Travis County or |
|
|
in the county in which the person resides may order the person to |
|
|
comply with the subpoena or testify. |
|
|
(b) A court may punish as contempt a person's failure to |
|
|
obey an order under this section. |
|
|
Sec. 562.157. DETERMINATION OF VIOLATION. After a hearing |
|
|
under this subchapter to determine whether a person has engaged in |
|
|
an unfair method of competition or unfair or deceptive act or |
|
|
practice prohibited by this chapter, the department shall determine |
|
|
whether: |
|
|
(1) the method of competition or the act or practice |
|
|
considered in the hearing is defined as: |
|
|
(A) an unfair method of competition or deceptive |
|
|
act or practice under Subchapter B; or |
|
|
(B) a false, misleading, or deceptive act or |
|
|
practice under Section 17.46, Business & Commerce Code; and |
|
|
(2) the person against whom the charges were made |
|
|
engaged in the method of competition or act or practice in violation |
|
|
of: |
|
|
(A) this chapter; or |
|
|
(B) Subchapter E, Chapter 17, Business & Commerce |
|
|
Code, as specified in Section 17.46, Business & Commerce Code. |
|
|
Sec. 562.158. CEASE AND DESIST ORDER. On determining that a |
|
|
person committed a violation described by Section 562.157 or |
|
|
committed a violation of Subchapter B or C, the department shall: |
|
|
(1) make written findings; and |
|
|
(2) issue and serve on the person an order requiring |
|
|
the person to cease and desist from engaging in the method of |
|
|
competition or act or practice determined to be a violation or the |
|
|
violation of Subchapter B or C, as applicable. |
|
|
Sec. 562.159. MODIFICATION OR SETTING ASIDE OF ORDER. On |
|
|
the notice and in the manner the department determines proper, the |
|
|
department may modify or set aside wholly or partly a cease and |
|
|
desist order issued under Section 562.158 at any time before a |
|
|
petition appealing the order is filed in accordance with Subchapter |
|
|
D, Chapter 36. |
|
|
Sec. 562.160. IMMUNITY FROM PROSECUTION. (a) This section |
|
|
applies to a person who requests to be excused from attending and |
|
|
testifying at a hearing under this chapter or from producing books, |
|
|
papers, records, correspondence, or other documents at the hearing |
|
|
on the ground that the testimony or evidence may: |
|
|
(1) tend to incriminate the person; or |
|
|
(2) subject the person to a penalty or forfeiture. |
|
|
(b) A person who, notwithstanding a request described by |
|
|
Subsection (a), is directed to provide the testimony or produce the |
|
|
documents shall comply with that direction. Except as provided by |
|
|
Subsection (c), the person may not be prosecuted or subjected to a |
|
|
penalty or forfeiture for or on account of a transaction, matter, or |
|
|
thing about which the person testifies or produces documents, and |
|
|
the testimony or documents produced may not be received against the |
|
|
person in a criminal action, investigation, or proceeding. |
|
|
(c) A person who complies with a direction to testify or |
|
|
produce documents is not exempt from: |
|
|
(1) prosecution or punishment for perjury committed |
|
|
while testifying, and the testimony or evidence given or produced |
|
|
is admissible against the person in a criminal action, |
|
|
investigation, or proceeding concerning the perjury; or |
|
|
(2) the denial, revocation, or suspension of any |
|
|
license, permission, or authority conferred or to be conferred |
|
|
under this code. |
|
|
(d) A person may waive the immunity or privilege granted by |
|
|
this section by executing, acknowledging, and filing with the |
|
|
department a statement expressly waiving the immunity or privilege |
|
|
for a specified transaction, matter, or thing. On filing the |
|
|
statement: |
|
|
(1) the testimony or documents produced by the person |
|
|
in relation to the transaction, matter, or thing may be received by |
|
|
or produced before a judge or justice or a court, grand jury, or |
|
|
other tribunal; and |
|
|
(2) the person is not entitled to immunity or |
|
|
privilege for the testimony or documents received or produced under |
|
|
Subdivision (1). |
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Sec. 562.161. ADMINISTRATIVE PENALTY FOR VIOLATION OF CEASE |
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AND DESIST ORDER. (a) A person who violates a cease and desist |
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order issued under Section 562.158 is subject to an administrative |
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penalty under Chapter 84. |
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(b) In determining whether a person has violated a cease and |
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desist order, the department shall consider the maintenance of |
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procedures reasonably adapted to ensure compliance with the order. |
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(c) An administrative penalty imposed under this section |
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may not exceed: |
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(1) $1,000 for each violation; or |
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(2) $5,000 for all violations. |
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(d) An order of the department imposing an administrative |
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penalty under this section applies only to a violation of the cease |
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and desist order committed before the date the order imposing the |
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penalty is issued. |
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Sec. 562.162. CIVIL PENALTY FOR VIOLATION OF CEASE AND |
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DESIST ORDER. (a) A person who is found by a court to have violated |
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a cease and desist order issued under Section 562.158 is liable to |
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the state for a penalty. The state may recover the penalty in a |
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civil action. |
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(b) The penalty may not exceed $50 unless the court finds |
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the violation to be wilful, in which case the penalty may not exceed |
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$500. |
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[Sections 562.163-562.200 reserved for expansion] |
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SUBCHAPTER E. ENFORCEMENT BY ATTORNEY GENERAL |
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Sec. 562.201. INJUNCTIVE RELIEF. (a) The attorney general |
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may bring an action under this section if the attorney general has |
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reason to believe that: |
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(1) a person engaged in the business of discount |
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health care programs in this state is engaging in, has engaged in, |
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or is about to engage in an act or practice defined as unlawful |
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under: |
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(A) this chapter; or |
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(B) Section 17.46, Business & Commerce Code; and |
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(2) the action is in the public interest. |
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(b) The attorney general may bring the action in the name of |
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the state to restrain by temporary or permanent injunction the |
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person's use of the method, act, or practice. |
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Sec. 562.202. VENUE FOR INJUNCTIVE ACTION. An action for an |
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injunction under this subchapter may be commenced in a district |
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court in: |
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(1) the county in which the person against whom the |
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action is brought: |
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(A) resides; |
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(B) has the person's principal place of business; |
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or |
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(C) is engaging in business; |
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(2) the county in which the transaction or a |
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substantial portion of the transaction occurred; or |
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(3) Travis County. |
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Sec. 562.203. ISSUANCE OF INJUNCTION. (a) The court may |
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issue an appropriate temporary or permanent injunction. |
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(b) The court shall issue the injunction without bond. |
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Sec. 562.204. CIVIL PENALTY. In addition to requesting a |
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temporary or permanent injunction under Section 562.201, the |
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attorney general may request a civil penalty of not more than |
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$10,000 for each violation on a finding by the court that the |
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defendant has engaged in or is engaging in an act or practice |
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defined as unlawful under this chapter or Section 17.46, Business & |
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Commerce Code. |
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Sec. 562.205. COMPENSATION OR RESTORATION. The court may |
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make an additional order or judgment as necessary to compensate an |
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identifiable person for actual damages or for restoration of money |
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or property that may have been acquired by means of an enjoined act |
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or practice. |
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Sec. 562.206. CIVIL PENALTY FOR VIOLATION OF INJUNCTION. |
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(a) A person who violates an injunction issued under this |
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subchapter is liable for and shall pay to the state a civil penalty |
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of not more than $10,000 for each violation. |
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(b) The attorney general may, in the name of the state, |
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petition the court for recovery of the civil penalty against the |
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person who violates the injunction. |
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(c) The court shall consider the maintenance of procedures |
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reasonably adapted to ensure compliance with the injunction in |
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determining whether a person has violated an injunction. |
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(d) The court issuing the injunction retains jurisdiction |
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and the cause is continued for the purpose of assessing a civil |
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penalty under this section. |
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Sec. 562.207. REMEDIES NOT EXCLUSIVE. The remedies |
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provided by this subchapter: |
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(1) are not exclusive; and |
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(2) are in addition to any other remedy or procedure |
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provided by another law or at common law. |
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[Sections 562.208-562.250 reserved for expansion] |
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SUBCHAPTER F. ASSURANCE OF VOLUNTARY COMPLIANCE |
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Sec. 562.251. ACCEPTANCE OF ASSURANCE. (a) In |
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administering this chapter, the department may accept assurance of |
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voluntary compliance from a person who is engaging in, has engaged |
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in, or is about to engage in an act or practice in violation of this |
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chapter or Section 17.46, Business & Commerce Code. |
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(b) The assurance must be in writing and be filed with the |
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department. |
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(c) The department may condition acceptance of an assurance |
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of voluntary compliance on the stipulation that the person offering |
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the assurance restore to a person in interest money that may have |
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been acquired by the act or practice described in Subsection (a). |
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Sec. 562.252. EFFECT OF ASSURANCE. (a) An assurance of |
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voluntary compliance is not an admission of a prior violation of |
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this chapter or Section 17.46, Business & Commerce Code. |
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(b) Unless an assurance of voluntary compliance is |
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rescinded by agreement, a subsequent failure to comply with the |
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assurance is prima facie evidence of a violation of this chapter or |
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Section 17.46, Business & Commerce Code. |
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Sec. 562.253. REOPENING. A matter closed by the filing of |
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an assurance of voluntary compliance may be reopened at any time. |
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[Sections 562.254-562.300 reserved for expansion] |
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SUBCHAPTER G. CONSTRUCTION OF CHAPTER WITH OTHER LAWS |
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Sec. 562.301. LIABILITY UNDER OTHER LAW. An order of the |
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department under this chapter, or an order by a court to enforce |
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that order, does not relieve or absolve a person affected by either |
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order from liability under another law of this state. |
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Sec. 562.302. POWERS IN ADDITION TO OTHER POWERS AUTHORIZED |
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BY LAW. The powers vested in the department and the commissioner by |
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|
this chapter are in addition to any other powers to enforce a |
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penalty, fine, or forfeiture authorized by law with respect to a |
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method of competition or act or practice defined as unfair or |
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deceptive. |
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Sec. 562.303. DOUBLE RECOVERY PROHIBITED. A person may not |
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recover damages and penalties for the same act or practice under |
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both this chapter and another law. |
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SECTION 2. The Insurance Code is amended by adding Title 21 |
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to read as follows: |
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TITLE 21. DISCOUNT HEALTH CARE PROGRAMS |
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CHAPTER 7001. REGISTRATION OF DISCOUNT HEALTH CARE |
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PROGRAM OPERATORS |
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Sec. 7001.001. DEFINITIONS. In this chapter: |
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(1) "Discount health care program" means a business |
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arrangement or contract in which an entity, in exchange for fees, |
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dues, charges, or other consideration, offers its members access to |
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|
discounts on health care services provided by health care |
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|
providers. The term does not include an insurance policy, a |
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|
certificate of coverage, or a self-funded or self-insured employee |
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benefit plan. |
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(2) "Discount health care program operator" means a |
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person who, in exchange for fees, dues, charges, or other |
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consideration, operates a discount health care program and |
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contracts with providers, provider networks, or other discount |
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|
health care program operators to offer access to health care |
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services at a discount and determines the charge to members. |
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(3) "Health care services" includes physician care, |
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inpatient care, hospital surgical services, emergency services, |
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ambulance services, laboratory services, audiology services, |
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dental services, vision services, mental health services, |
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|
substance abuse services, chiropractic services, and podiatry |
|
|
services, and the provision of medical equipment and supplies, |
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|
including prescription drugs. |
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(4) "Marketer" means a person who sells or |
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|
distributes, or offers to sell or distribute, a discount health |
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care program, including a private label entity that places its name |
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on and markets or distributes a discount health care program, but |
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does not operate a discount health care program. |
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|
(5) "Member" means a person who pays fees, dues, |
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|
charges, or other consideration for the right to participate in a |
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discount health care program. |
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|
(6) "Program operator" means a discount health plan |
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|
program operator. |
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(7) "Provider" means a person who is licensed or |
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|
otherwise authorized to provide health care services in this state. |
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Sec. 7001.002. EXEMPTION. This chapter does not apply to a |
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program operator who is an insurer and who holds a certificate of |
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|
authority under Title 6. |
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Sec. 7001.003. RULES. The commissioner shall adopt rules |
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|
in the manner prescribed by Subchapter A, Chapter 36, as necessary |
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|
to implement this chapter. |
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Sec. 7001.004. REGISTRATION REQUIRED. A discount health |
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|
care program operator may not offer a discount health care program |
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|
in this state unless the program operator is registered with the |
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|
department. |
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Sec. 7001.005. APPLICATION FOR REGISTRATION AND RENEWAL OF |
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REGISTRATION. (a) An applicant for registration under this |
|
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chapter or an applicant for renewal of registration under this |
|
|
chapter whose information has changed shall submit: |
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|
(1) a completed registration application on the form |
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|
prescribed by the department indicating the program operator's |
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name, physical address, and mailing address and its agent for |
|
|
service of process; |
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|
(2) a list of names, addresses, official positions, |
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|
and biographical information of: |
|
|
(A) the individuals responsible for conducting |
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the program operator's affairs, including: |
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(i) each member of the board of directors, |
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|
board of trustees, executive committee, or other governing board or |
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|
committee; |
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|
(ii) the officers of the program operator; |
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and |
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|
(iii) any contracted management company |
|
|
personnel; and |
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(B) any person owning or having the right to |
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|
acquire 10 percent or more of the voting securities of the program |
|
|
operator; |
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|
(3) a statement generally describing the applicant, |
|
|
its facilities and personnel, and the health care services or |
|
|
products for which a discount will be made available under its |
|
|
discount health care programs; |
|
|
(4) a list of the marketers authorized to sell or |
|
|
distribute the program operator's programs under the program |
|
|
operator's name and a list of the marketing entities authorized to |
|
|
private label the program operator's programs; and |
|
|
(5) a copy of the form of all contracts made or to be |
|
|
made between the program operator and any providers or provider |
|
|
networks regarding the provision of health care services or |
|
|
products to members. |
|
|
(b) After the initial registration, if the form of a |
|
|
contract described by Subsection (a)(5) changes, the program |
|
|
operator must file the modified contract form with the department |
|
|
before it may be used. |
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|
(c) As part of the registration required under Subsection |
|
|
(a), and annually thereafter, the program operator shall certify in |
|
|
writing to the department that its programs comply with the |
|
|
requirements of this chapter and Chapter 561. |
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|
Sec. 7001.006. FEES. A discount health care program |
|
|
operator shall pay the department an initial registration fee of |
|
|
$1,000 and an annual renewal fee in the amount set by the |
|
|
commissioner not to exceed $500. |
|
|
Sec. 7001.007. CRIMINAL BACKGROUND CHECK. The department |
|
|
may conduct a criminal background check on: |
|
|
(1) the individuals responsible for conducting the |
|
|
program operator's affairs; |
|
|
(2) each member of the board of directors, board of |
|
|
trustees, executive committee, or other governing board or |
|
|
committee; |
|
|
(3) the officers of the program operator; |
|
|
(4) any contracted management company personnel; and |
|
|
(5) any person owning or having the right to acquire 10 |
|
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percent or more of the voting securities of the program operator. |
|
|
SECTION 3. Chapter 76, Health and Safety Code, is repealed. |
|
|
SECTION 4. Not later than January 1, 2010, the commissioner |
|
|
of insurance shall adopt the rules and procedures necessary to |
|
|
implement Chapter 7001, Insurance Code, as added by this Act. |
|
|
SECTION 5. (a) Notwithstanding Section 7001.004, |
|
|
Insurance Code, as added by this Act, a person is not required to |
|
|
register under that section before April 1, 2010, except as |
|
|
provided by Subsection (b) of this section. |
|
|
(b) A program operator that is registered with the |
|
|
Department of Licensing and Regulation on January 1, 2010, as |
|
|
required by Chapter 76, Health and Safety Code, shall file an |
|
|
application for renewal of registration with the Texas Department |
|
|
of Insurance under Chapter 7001, Insurance Code, not later than |
|
|
April 1, 2010. |
|
|
SECTION 6. (a) Except as provided by Subsections (b) and |
|
|
(c) of this section, this Act takes effect September 1, 2009. |
|
|
(b) Section 3 of this Act takes effect April 1, 2010. |
|
|
(c) Subchapter E, Chapter 562, Insurance Code, as added by |
|
|
this Act, takes effect April 1, 2010. |