H.B. No. 4290
AN ACT
relating to retrospective utilization review and utilization
review to determine the experimental or investigational nature of a
health care service.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Sections 1305.004(a)(1), (10), and (23),
Insurance Code, are amended to read as follows:
(1) "Adverse determination" has the meaning assigned
by Chapter 4201 [means a determination, made through utilization
review or retrospective review, that the health care services
furnished or proposed to be furnished to an employee are not
medically necessary or appropriate].
(10) "Independent review" means a system for final
administrative review by an independent review organization of the
medical necessity and appropriateness, or the experimental or
investigational nature, of health care services being provided,
proposed to be provided, or that have been provided to an employee.
(23) "Screening criteria" means the written policies,
medical protocols, and treatment guidelines used by an insurance
carrier or a network as part of utilization review [or
retrospective review].
SECTION 2. Section 1305.053, Insurance Code, is amended to
read as follows:
Sec. 1305.053. CONTENTS OF APPLICATION. Each certificate
application must include:
(1) a description or a copy of the applicant's basic
organizational structure documents and other related documents,
including organizational charts or lists that show:
(A) the relationships and contracts between the
applicant and any affiliates of the applicant; and
(B) the internal organizational structure of the
applicant's management and administrative staff;
(2) biographical information regarding each person
who governs or manages the affairs of the applicant, accompanied by
information sufficient to allow the commissioner to determine the
competence, fitness, and reputation of each officer or director of
the applicant or other person having control of the applicant;
(3) a copy of the form of any contract between the
applicant and any provider or group of providers, and with any third
party performing services on behalf of the applicant under
Subchapter D;
(4) a copy of the form of each contract with an
insurance carrier, as described by Section 1305.154;
(5) a financial statement, current as of the date of
the application, that is prepared using generally accepted
accounting practices and includes:
(A) a balance sheet that reflects a solvent
financial position;
(B) an income statement;
(C) a cash flow statement; and
(D) the sources and uses of all funds;
(6) a statement acknowledging that lawful process in a
legal action or proceeding against the network on a cause of action
arising in this state is valid if served in the manner provided by
Chapter 804 for a domestic company;
(7) a description and a map of the applicant's service
area or areas, with key and scale, that identifies each county or
part of a county to be served;
(8) a description of programs and procedures to be
utilized, including:
(A) a complaint system, as required under
Subchapter I;
(B) a quality improvement program, as required
under Subchapter G; and
(C) the utilization review program [and
retrospective review programs] described in Subchapter H;
(9) a list of all contracted network providers that
demonstrates the adequacy of the network to provide comprehensive
health care services sufficient to serve the population of injured
employees within the service area and maps that demonstrate that
the access and availability standards under Subchapter G are met;
and
(10) any other information that the commissioner
requires by rule to implement this chapter.
SECTION 3. Section 1305.154(c), Insurance Code, is amended
to read as follows:
(c) A network's contract with a carrier must include:
(1) a description of the functions that the carrier
delegates to the network, consistent with the requirements of
Subsection (b), and the reporting requirements for each function;
(2) a statement that the network and any management
contractor or third party to which the network delegates a function
will perform all delegated functions in full compliance with all
requirements of this chapter, the Texas Workers' Compensation Act,
and rules of the commissioner or the commissioner of workers'
compensation;
(3) a provision that the contract:
(A) may not be terminated without cause by either
party without 90 days' prior written notice; and
(B) must be terminated immediately if cause
exists;
(4) a hold-harmless provision stating that the
network, a management contractor, a third party to which the
network delegates a function, and the network's contracted
providers are prohibited from billing or attempting to collect any
amounts from employees for health care services under any
circumstances, including the insolvency of the carrier or the
network, except as provided by Section 1305.451(b)(6);
(5) a statement that the carrier retains ultimate
responsibility for ensuring that all delegated functions and all
management contractor functions are performed in accordance with
applicable statutes and rules and that the contract may not be
construed to limit in any way the carrier's responsibility,
including financial responsibility, to comply with all statutory
and regulatory requirements;
(6) a statement that the network's role is to provide
the services described under Subsection (b) as well as any other
services or functions delegated by the carrier, including functions
delegated to a management contractor, subject to the carrier's
oversight and monitoring of the network's performance;
(7) a requirement that the network provide the
carrier, at least monthly and in a form usable for audit purposes,
the data necessary for the carrier to comply with reporting
requirements of the department and the division of workers'
compensation with respect to any services provided under the
contract, as determined by commissioner rules;
(8) a requirement that the carrier, the network, any
management contractor, and any third party to which the network
delegates a function comply with the data reporting requirements of
the Texas Workers' Compensation Act and rules of the commissioner
of workers' compensation;
(9) a contingency plan under which the carrier would,
in the event of termination of the contract or a failure to perform,
reassume one or more functions of the network under the contract,
including functions related to:
(A) payments to providers and notification to
employees;
(B) quality of care;
(C) utilization review;
[(D) retrospective review;] and
(D) [(E)] continuity of care, including a plan
for identifying and transitioning employees to new providers;
(10) a provision that requires that any agreement by
which the network delegates any function to a management contractor
or any third party be in writing, and that such an agreement require
the delegated third party or management contractor to be subject to
all the requirements of this subchapter;
(11) a provision that requires the network to provide
to the department the license number of a management contractor or
any delegated third party who performs a function that requires a
license as a utilization review agent under Chapter 4201 or any
other license under this code or another insurance law of this
state;
(12) an acknowledgment that:
(A) any management contractor or third party to
whom the network delegates a function must perform in compliance
with this chapter and other applicable statutes and rules, and that
the management contractor or third party is subject to the
carrier's and the network's oversight and monitoring of its
performance; and
(B) if the management contractor or the third
party fails to meet monitoring standards established to ensure that
functions delegated to the management contractor or the third party
under the delegation contract are in full compliance with all
statutory and regulatory requirements, the carrier or the network
may cancel the delegation of one or more delegated functions;
(13) a requirement that the network and any management
contractor or third party to which the network delegates a function
provide all necessary information to allow the carrier to provide
information to employees as required by Section 1305.451; and
(14) a provision that requires the network, in
contracting with a third party directly or through another third
party, to require the third party to permit the commissioner to
examine at any time any information the commissioner believes is
relevant to the third party's financial condition or the ability of
the network to meet the network's responsibilities in connection
with any function the third party performs or has been delegated.
SECTION 4. The heading to Subchapter H, Chapter 1305,
Insurance Code, is amended to read as follows:
SUBCHAPTER H. UTILIZATION REVIEW[; RETROSPECTIVE REVIEW]
SECTION 5. Section 1305.351, Insurance Code, is amended to
read as follows:
Sec. 1305.351. UTILIZATION REVIEW [AND RETROSPECTIVE
REVIEW] IN NETWORK. (a) The requirements of Chapter 4201 apply to
utilization review conducted in relation to claims in a workers'
compensation health care network. In the event of a conflict
between Chapter 4201 and this chapter, this chapter controls.
(b) Any screening criteria used for utilization review [or
retrospective review] related to a workers' compensation health
care network must be consistent with the network's treatment
guidelines.
(c) The preauthorization requirements of Section 413.014,
Labor Code, and commissioner of workers' compensation rules adopted
under that section, do not apply to health care provided through a
workers' compensation network. If a network or carrier uses a
preauthorization process within a network, the requirements of this
subchapter and commissioner rules apply. A network or an insurance
carrier may not require preauthorization of treatments and services
for a medical emergency.
(d) Notwithstanding Section 4201.152, a utilization review
agent or an insurance carrier that uses doctors to perform reviews
of health care services provided under this chapter, including
utilization review [and retrospective review], or peer reviews
under Section 408.0231(g), Labor Code, may only use doctors
licensed to practice in this state.
SECTION 6. Section 1305.353(a), Insurance Code, is amended
to read as follows:
(a) The entity performing utilization review [or
retrospective review] shall notify the employee or the employee's
representative, if any, and the requesting provider of a
determination made in a utilization review [or retrospective
review].
SECTION 7. Sections 4201.002(1) and (13), Insurance Code,
are amended to read as follows:
(1) "Adverse determination" means a determination by a
utilization review agent that health care services provided or
proposed to be provided to a patient are not medically necessary or
are experimental or investigational.
(13) "Utilization review" includes [means] a system
for prospective, [or] concurrent, or retrospective review of the
medical necessity and appropriateness of health care services and a
system for prospective, concurrent, or retrospective review to
determine the experimental or investigational nature of health care
services [being provided or proposed to be provided to an
individual in this state]. The term does not include a review in
response to an elective request for clarification of coverage.
SECTION 8. Section 4201.051, Insurance Code, is amended to
read as follows:
Sec. 4201.051. PERSONS PROVIDING INFORMATION ABOUT SCOPE OF
COVERAGE OR BENEFITS. This chapter does not apply to a person who:
(1) provides information to an enrollee about scope of
coverage or benefits provided under a health insurance policy or
health benefit plan; and
(2) does not determine whether a particular health
care service provided or to be provided to an enrollee is:
(A) medically necessary or appropriate; or
(B) experimental or investigational.
SECTION 9. Section 4201.206, Insurance Code, is amended to
read as follows:
Sec. 4201.206. OPPORTUNITY TO DISCUSS TREATMENT BEFORE
ADVERSE DETERMINATION. Subject to the notice requirements of
Subchapter G, before an adverse determination is issued by a
utilization review agent who questions the medical necessity or
appropriateness, or the experimental or investigational nature, of
a health care service [issues an adverse determination], the agent
shall provide the health care provider who ordered the service a
reasonable opportunity to discuss with a physician the patient's
treatment plan and the clinical basis for the agent's
determination.
SECTION 10. Subchapter G, Chapter 4201, Insurance Code, is
amended by adding Section 4201.305 to read as follows:
Sec. 4201.305. NOTICE OF ADVERSE DETERMINATION FOR
RETROSPECTIVE UTILIZATION REVIEW. (a) Notwithstanding Sections
4201.302 and 4201.304, if a retrospective utilization review is
conducted, the utilization review agent shall provide notice of an
adverse determination under the retrospective utilization review
in writing to the provider of record and the patient within a
reasonable period, but not later than 30 days after the date on
which the claim is received.
(b) The period under Subsection (a) may be extended once by
the utilization review agent for a period not to exceed 15 days, if
the utilization review agent:
(1) determines that an extension is necessary due to
matters beyond the utilization review agent's control; and
(2) notifies the provider of record and the patient
before the expiration of the initial 30-day period of the
circumstances requiring the extension and the date by which the
utilization review agent expects to make a determination.
(c) If the extension under Subsection (b) is required
because of the failure of the provider of record or the patient to
submit information necessary to reach a determination on the
request, the notice of extension must:
(1) specifically describe the required information
necessary to complete the request; and
(2) give the provider of record and the patient at
least 45 days from the date of receipt of the notice of extension to
provide the specified information.
(d) If the period for making the determination under this
section is extended because of the failure of the provider of record
or the patient to submit the information necessary to make the
determination, the period for making the determination is tolled
from the date on which the utilization review agent sends the
notification of the extension to the provider of record or the
patient until the earlier of:
(1) the date on which the provider of record or the
patient responds to the request for additional information; or
(2) the date by which the specified information was to
have been submitted.
(e) If the periods for retrospective utilization review
provided by this section conflict with the time limits concerning
or related to payment of claims established under Subchapter J,
Chapter 843, the time limits established under Subchapter J,
Chapter 843, control.
(f) If the periods for retrospective utilization review
provided by this section conflict with the time limits concerning
or related to payment of claims established under Subchapters C and
C-1, Chapter 1301, the time limits established under Subchapters C
and C-1, Chapter 1301, control.
(g) If the periods for retrospective utilization review
provided by this section conflict with the time limits concerning
or related to payment of claims established under Section 408.027,
Labor Code, the time limits established under Section 408.027,
Labor Code, control.
SECTION 11. Section 4201.401, Insurance Code, is amended by
adding Subsection (c) to read as follows:
(c) The utilization review agent shall comply with the
independent review organization's determination regarding the
experimental or investigational nature of health care items and
services for an enrollee.
SECTION 12. Section 4201.456, Insurance Code, is amended to
read as follows:
Sec. 4201.456. OPPORTUNITY TO DISCUSS TREATMENT BEFORE
ADVERSE DETERMINATION. Subject to the notice requirements of
Subchapter G, before an adverse determination is issued by a
specialty utilization review agent who questions the medical
necessity or appropriateness, or the experimental or
investigational nature, of a health care service [issues an adverse
determination], the agent shall provide the health care provider
who ordered the service a reasonable opportunity to discuss the
patient's treatment plan and the clinical basis for the agent's
determination with a health care provider who is of the same
specialty as the agent.
SECTION 13. Section 401.011(38-a), Labor Code, is amended
to read as follows:
(38-a) "Retrospective review" means the utilization
review process of reviewing the medical necessity and
reasonableness of health care that has been provided to an injured
employee [has the meaning assigned by Chapter 1305, Insurance
Code].
SECTION 14. Section 408.0043(a), Labor Code, is amended to
read as follows:
(a) This section applies to a person, other than a
chiropractor or a dentist, who performs health care services under
this title as:
(1) a doctor performing peer review;
(2) a doctor performing a utilization review of a
health care service provided to an injured employee[, including a
retrospective review];
(3) a doctor performing an independent review of a
health care service provided to an injured employee[, including a
retrospective review];
(4) a designated doctor;
(5) a doctor performing a required medical
examination; or
(6) a doctor serving as a member of the medical quality
review panel.
SECTION 15. Section 408.0044(a), Labor Code, is amended to
read as follows:
(a) This section applies to a dentist who performs dental
services under this title as:
(1) a doctor performing peer review of dental
services;
(2) a doctor performing a utilization review of a
dental service provided to an injured employee[, including a
retrospective review];
(3) a doctor performing an independent review of a
dental service provided to an injured employee[, including a
retrospective review]; or
(4) a doctor performing a required dental examination.
SECTION 16. Section 408.0045(a), Labor Code, is amended to
read as follows:
(a) This section applies to a chiropractor who performs
chiropractic services under this title as:
(1) a doctor performing peer review of chiropractic
services;
(2) a doctor performing a utilization review of a
chiropractic service provided to an injured employee[, including a
retrospective review];
(3) a doctor performing an independent review of a
chiropractic service provided to an injured employee[, including a
retrospective review];
(4) a designated doctor providing chiropractic
services;
(5) a doctor performing a required medical
examination; or
(6) a chiropractor serving as a member of the medical
quality review panel.
SECTION 17. Section 408.023(h), Labor Code, is amended to
read as follows:
(h) Notwithstanding Section 4201.152, Insurance Code, a
utilization review agent or an insurance carrier that uses doctors
to perform reviews of health care services provided under this
subtitle, including utilization review [and retrospective review],
may only use doctors licensed to practice in this state.
SECTION 18. Section 413.031(e-3), Labor Code, is amended to
read as follows:
(e-3) Notwithstanding Subsections (d) and (e) of this
section or Chapters 4201 and 4202, Insurance Code, a doctor, other
than a dentist or a chiropractor, who performs a utilization review
or an independent review[, including a retrospective review,] of a
health care service provided to an injured employee is subject to
Section 408.0043. A dentist who performs a utilization review or an
independent review[, including a retrospective review,] of a dental
service provided to an injured employee is subject to Section
408.0044. A chiropractor who performs a utilization review or an
independent review[, including a retrospective review,] of a
chiropractic service provided to an injured employee is subject to
Section 408.0045.
SECTION 19. The following laws are repealed:
(1) Section 1305.004(a)(21), Insurance Code;
(2) Section 1305.352, Insurance Code; and
(3) Subchapter K, Chapter 4201, Insurance Code.
SECTION 20. This Act applies only to a health benefit plan
delivered, issued for delivery, or renewed on or after January 1,
2010. A health benefit plan delivered, issued for delivery, or
renewed before January 1, 2010, 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.
SECTION 21. This Act takes effect September 1, 2009.
______________________________ ______________________________
President of the Senate Speaker of the House
I certify that H.B. No. 4290 was passed by the House on April
30, 2009, by the following vote: Yeas 144, Nays 0, 1 present, not
voting; and that the House concurred in Senate amendments to H.B.
No. 4290 on May 29, 2009, by the following vote: Yeas 144, Nays 0,
1 present, not voting.
______________________________
Chief Clerk of the House
I certify that H.B. No. 4290 was passed by the Senate, with
amendments, on May 26, 2009, by the following vote: Yeas 31, Nays
0.
______________________________
Secretary of the Senate
APPROVED: __________________
Date
__________________
Governor