S.B. No. 822
 
 
 
 
AN ACT
  relating to the regulation of certain health care provider network
  contract arrangements; providing an administrative penalty;
  authorizing a fee.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Subtitle F, Title 8, Insurance Code, is amended
  by adding Chapter 1458 to read as follows:
  CHAPTER 1458.  PROVIDER NETWORK CONTRACT ARRANGEMENTS
  SUBCHAPTER A.  GENERAL PROVISIONS
         Sec. 1458.001.  GENERAL DEFINITIONS.  In this chapter:
               (1)  "Affiliate" means a person who, directly or
  indirectly through one or more intermediaries, controls, is
  controlled by, or is under common control with another person.
               (2)  "Contracting entity" means a person who:
                     (A)  enters into a direct contract with a provider
  for the delivery of health care services to covered individuals;
  and
                     (B)  in the ordinary course of business
  establishes a provider network or networks for access by another
  party.
               (3)  "Covered individual" means an individual who is
  covered under a health benefit plan.
               (4)  "Express authority" means a provider's consent
  that is obtained through separate signature lines for each line of
  business.
               (5)  "Health care services" means services provided for
  the diagnosis, prevention, treatment, or cure of a health
  condition, illness, injury, or disease.
               (6)  "Person" has the meaning assigned by Section
  823.002.
               (7)(A)  "Provider" means:
                           (i)  an advanced practice nurse;
                           (ii)  an optometrist;
                           (iii)  a therapeutic optometrist;
                           (iv)  a physician;
                           (v)  a physician assistant;
                           (vi)  a professional association composed
  solely of physicians, optometrists, or therapeutic optometrists;
                           (vii)  a single legal entity authorized to
  practice medicine owned by two or more physicians;
                           (viii)  a nonprofit health corporation
  certified by the Texas Medical Board under Chapter 162, Occupations
  Code;
                           (ix)  a partnership composed solely of
  physicians, optometrists, or therapeutic optometrists;
                           (x)  a physician-hospital organization that
  acts exclusively as an administrator for a provider to facilitate
  the provider's participation in health care contracts; or
                           (xi)  an institution that is licensed under
  Chapter 241, Health and Safety Code.
                     (B)  "Provider" does not include a
  physician-hospital organization that leases or rents the
  physician-hospital organization's network to another party.
               (8)  "Provider network contract" means a contract
  between a contracting entity and a provider for the delivery of, and
  payment for, health care services to a covered individual.
         Sec. 1458.002.  DEFINITION OF HEALTH BENEFIT PLAN.  (a)  In
  this chapter, "health benefit plan" means:
               (1)  a hospital and medical expense incurred policy;
               (2)  a nonprofit health care service plan contract;
               (3)  a health maintenance organization subscriber
  contract; or
               (4)  any other health care plan or arrangement that
  pays for or furnishes medical or health care services.
         (b)  "Health benefit plan" does not include one or more or
  any combination of the following:
               (1)  coverage only for accident or disability income
  insurance or any combination of those coverages;
               (2)  credit-only insurance;
               (3)  coverage issued as a supplement to liability
  insurance;
               (4)  liability insurance, including general liability
  insurance and automobile liability insurance;
               (5)  workers' compensation or similar insurance;
               (6)  a discount health care program, as defined by
  Section 7001.001;
               (7)  coverage for on-site medical clinics;
               (8)  automobile medical payment insurance;
               (9)  a multiple employer welfare arrangement that holds
  a certificate of authority under Chapter 846; or
               (10)  other similar insurance coverage, as specified by
  federal regulations issued under the Health Insurance Portability
  and Accountability Act of 1996 (Pub. L. No. 104-191), under which
  benefits for medical care are secondary or incidental to other
  insurance benefits.
         (c)  "Health benefit plan" does not include the following
  benefits if they are provided under a separate policy, certificate,
  or contract of insurance, or are otherwise not an integral part of
  the coverage:
               (1)  dental or vision benefits;
               (2)  benefits for long-term care, nursing home care,
  home health care, community-based care, or any combination of these
  benefits;
               (3)  other similar, limited benefits, including
  benefits specified by federal regulations issued under the Health
  Insurance Portability and Accountability Act of 1996 (Pub. L. No.
  104-191); or
               (4)  a Medicare supplement benefit plan described by
  Section 1652.002.
         (d)  "Health benefit plan" does not include coverage limited
  to a specified disease or illness or hospital indemnity coverage or
  other fixed indemnity insurance coverage if:
               (1)  the coverage is provided under a separate policy,
  certificate, or contract of insurance;
               (2)  there is no coordination between the provision of
  the coverage and any exclusion of benefits under any group health
  benefit plan maintained by the same plan sponsor; and
               (3)  the coverage is paid with respect to an event
  without regard to whether benefits are provided with respect to
  such an event under any group health benefit plan maintained by the
  same plan sponsor.
         Sec. 1458.003.  EXEMPTIONS.  This chapter does not apply:
               (1)  under circumstances in which access to the
  provider network is granted to an entity that operates under the
  same brand licensee program as the contracting entity; or
               (2)  to a contract between a contracting entity and a
  discount health care program operator, as defined by Section
  7001.001.
         Sec. 1458.004.  RULEMAKING AUTHORITY.  The commissioner may
  adopt rules to implement this chapter.
  SUBCHAPTER B. REGISTRATION REQUIREMENTS
         Sec. 1458.051.  REGISTRATION REQUIRED.  (a)  Unless the
  person holds a certificate of authority issued by the department to
  engage in the business of insurance in this state or operates a
  health maintenance organization under Chapter 843, a person must
  register with the department not later than the 30th day after the
  date on which the person begins acting as a contracting entity in
  this state.
         (b)  Notwithstanding Subsection (a), under Section 1458.055
  a contracting entity that holds a certificate of authority issued
  by the department to engage in the business of insurance in this
  state or is a health maintenance organization shall file with the
  commissioner an application for exemption from registration under
  which the affiliates may access the contracting entity's network.
         (c)  An application for an exemption filed under Subsection
  (b) must be accompanied by a list of the contracting entity's
  affiliates.  The contracting entity shall update the list with the
  commissioner on an annual basis.
         (d)  A list of affiliates filed with the commissioner under
  Subsection (c) is public information and is not exempt from
  disclosure under Chapter 552, Government Code.
         Sec. 1458.052.  DISCLOSURE OF INFORMATION.  (a)  A person
  required to register under Section 1458.051 must disclose:
               (1)  all names used by the contracting entity,
  including any name under which the contracting entity intends to
  engage or has engaged in business in this state;
               (2)  the mailing address and main telephone number of
  the contracting entity's headquarters;
               (3)  the name and telephone number of the contracting
  entity's primary contact for the department; and
               (4)  any other information required by the commissioner
  by rule.
         (b)  The disclosure made under Subsection (a) must include a
  description or a copy of the applicant's basic organizational
  structure documents and a copy of organizational charts and lists
  that show:
               (1)  the relationships between the contracting entity
  and any affiliates of the contracting entity, including subsidiary
  networks or other networks; and
               (2)  the internal organizational structure of the
  contracting entity's management.
         Sec. 1458.053.  SUBMISSION OF INFORMATION.  Information
  required under this subchapter must be submitted in a written or
  electronic format adopted by the commissioner by rule.
         Sec. 1458.054.  FEES.  The department may collect a
  reasonable fee set by the commissioner as necessary to administer
  the registration process.  Fees collected under this chapter shall
  be deposited in the Texas Department of Insurance operating fund.
         Sec. 1458.055.  EXEMPTION FOR AFFILIATES.  (a)  The
  commissioner shall grant an exemption for affiliates of a
  contracting entity if the contracting entity holds a certificate of
  authority issued by the department to engage in the business of
  insurance in this state or is a health maintenance organization if
  the commissioner determines that:
               (1)  the affiliate is not subject to a disclaimer of
  affiliation under Chapter 823; and
               (2)  the relationships between the person who holds a
  certificate of authority and all affiliates of the person,
  including subsidiary networks or other networks, are disclosed and
  clearly defined.
         (b)  An exemption granted under this section applies only to
  registration. An entity granted an exemption is otherwise subject
  to this chapter.
  SUBCHAPTER C.  RIGHTS AND RESPONSIBILITIES OF A CONTRACTING ENTITY
         Sec. 1458.101.  CONTRACT REQUIREMENTS.  (a)  In this
  section, the following are each considered a single separate line
  of business:
               (1)  preferred provider benefit plans covering
  individuals and groups;
               (2)  exclusive provider benefit plans covering
  individuals and groups;
               (3)  health maintenance organization plans covering
  individuals and groups;
               (4)  Medicare Advantage or similar plans issued in
  connection with a contract with the Centers for Medicare and
  Medicaid Services;
               (5)  Medicaid managed care; and
               (6)  the state child health plan established under
  Chapter 62, Health and Safety Code, or the comparable plan under
  Chapter 63, Health and Safety Code.
         (b)  A contracting entity may not sell, lease, or otherwise
  transfer information regarding the payment or reimbursement terms
  of the provider network contract without the express authority of
  and prior adequate notification to the provider.  The prior
  adequate notification may be provided in the written format
  specified by a provider network contract subject to this chapter.
         (c)  A contracting entity may not provide a person access to
  health care services or contractual discounts under a provider
  network contract unless the provider network contract specifically
  states that the contracting entity may contract with a person to
  provide access to the contracting entity's rights and
  responsibilities under the provider network contract.
         (d)  The provider network contract must require that on the
  request of the provider, the contracting entity will provide
  information necessary to determine whether a particular person has
  been authorized to access the provider's health care services and
  contractual discounts.
         (e)  To be enforceable against a provider, a provider network
  contract, including the lines of business described by Subsections
  (a) and (f), must also specify or reference a separate fee schedule
  for each such line of business. The separate fee schedule may
  describe specific services or procedures that the provider will
  deliver along with a corresponding payment, may describe a
  methodology for calculating payment based on a published fee
  schedule, or may describe payment in any other reasonable manner
  that specifies a definite payment for services. The fee
  information may be provided by any reasonable method, including
  electronically.
         (f)  The commissioner may, by rule, add additional lines of
  business for which express authority is required.
         Sec. 1458.102.  CONTRACT ACCESS. (a)  A contracting entity
  may not provide a person access to health care services or
  contractual discounts under a provider network contract unless the
  provider network contract specifically states that the person must
  comply with all applicable terms, limitations, and conditions of
  the provider network contract.
         (b)  For the purposes of this section, a contracting entity
  shall permit reasonable access, including electronic access,
  during business hours for the review of the provider network
  contract. The information may be used or disclosed only for the
  purposes of complying with the terms of the contract or state law.
         Sec. 1458.103.  ENFORCEMENT. The commissioner may impose a
  sanction under Chapter 82 or assess an administrative penalty under
  Chapter 84 on a contracting entity that violates this chapter or a
  rule adopted to implement this chapter.
         SECTION 2.  (a)  The change in law made by this Act applies
  only to a provider network contract entered into or renewed on or
  after September 1, 2013. A provider network contract entered into
  or renewed before September 1, 2013, is governed by the law as it
  existed immediately before the effective date of this Act, and that
  law is continued in effect for that purpose.
         (b)  For the purposes of compliance with Section 1458.101,
  Insurance Code, as added by this Act, a provider's express
  authority is presumed if:
               (1)  the provider network contract is in existence
  before September 1, 2013;
               (2)  on the first renewal after September 1, 2013, the
  contracting entity sends a written renewal notice by United States
  mail to the provider;
               (3)  the notice described by Subdivision (2) of this
  subsection:
                     (A)  contains a statement that failure to timely
  respond serves as assent to the renewal;
                     (B)  contains separate signature lines for each
  line of business applicable to the contract; and
                     (C)  specifies the separate fee schedule for each
  line of business applicable to the contract, described in any
  reasonable manner and which may be provided electronically; and
               (4)  the provider fails to respond within 60 days of
  receipt of the notice and has not objected to the renewal.
         SECTION 3.  This Act takes effect September 1, 2013.
 
 
 
 
 
  ______________________________ ______________________________
     President of the Senate Speaker of the House     
 
         I hereby certify that S.B. No. 822 passed the Senate on
  April 17, 2013, by the following vote: Yeas 31, Nays 0; and that
  the Senate concurred in House amendment on May 13, 2013, by the
  following vote: Yeas 31, Nays 0.
 
 
  ______________________________
  Secretary of the Senate    
 
         I hereby certify that S.B. No. 822 passed the House, with
  amendment, on May 8, 2013, by the following vote: Yeas 113,
  Nays 29, one present not voting.
 
 
  ______________________________
  Chief Clerk of the House   
 
 
 
  Approved:
 
  ______________________________ 
              Date
 
 
  ______________________________ 
            Governor