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A BILL TO BE ENTITLED
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AN ACT
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relating to medical loss ratios of preferred provider benefit plan |
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issuers. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Subchapter A, Chapter 1301, Insurance Code, is |
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amended by adding Section 1301.010 to read as follows: |
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Sec. 1301.010. MEDICAL LOSS RATIO. (a) In this section, |
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"medical loss ratio" means direct losses incurred and direct losses |
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paid for all preferred provider benefit plans issued by an insurer, |
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divided by direct premiums earned for all preferred provider |
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benefit plans issued by that insurer. This amount may not include |
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home office and overhead costs, advertising costs, network |
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development 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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(b) An insurer shall report the insurer's medical loss ratio |
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annually or more often as required by the commissioner by rule or |
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order. |
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(c) A medical loss ratio reported under this section is |
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public information. |
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(d) The department shall include information on the medical |
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loss ratio on the department's Internet website. |
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(e) An insurer shall report to the master policyholder or |
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sponsor: |
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(1) the total dollar amount for health care claims |
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paid under the preferred provider benefit plan for the nine months |
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following the policy effective date or renewal date; and |
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(2) the total dollar amount of premiums paid by the |
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master policyholder or the sponsor and insureds. |
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(f) The commissioner shall adopt rules as necessary to |
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implement this section, including rules regarding: |
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(1) a specific, uniform definition of "medical loss |
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ratio" for reporting and disclosure purposes; |
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(2) the frequency and form of reporting medical loss |
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ratios; |
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(3) standardizing and regulating the frequency and |
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form of reporting cost-containment expenses separate from the |
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medical loss ratio; and |
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(4) any disclaimers or explanations that an insurer |
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may include in the report required by Subsection (e). |
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SECTION 2. (a) Not later than January 1, 2010, the |
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commissioner of insurance shall adopt all rules necessary to |
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implement Section 1301.010, Insurance Code, as added by this Act. |
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The first reporting period under Subsection (b), Section 1301.010, |
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Insurance Code, as added by this Act, may not cover any period that |
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begins before January 1, 2010. |
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(b) Subsection (e), Section 1301.010, Insurance Code, as |
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added by this Act, applies only to a preferred provider benefit plan |
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policy delivered, issued for delivery, or renewed on or after |
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January 1, 2010. A policy delivered, issued for delivery, or |
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renewed before that date is governed by the law in effect |
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immediately before the effective date of this Act, and that law is |
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continued in effect for that purpose. |
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SECTION 3. This Act takes effect September 1, 2009. |
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* * * * * |