Texas 2009 - 81st Regular

Texas House Bill HB4341 Compare Versions

The same version is selected twice. Please select two different versions to compare.

Version 1 (Old)

Version 2 (New)

Old	New	Differences
1	1	H.B. No. 4341
2	2
3	3
4	4	AN ACT
5	5	relating to the regulation of discount health care programs by the
6	6	Texas Department of Insurance; providing penalties.
7	7	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
8	8	SECTION 1. Subtitle C, Title 5, Insurance Code, is amended
9	9	by adding Chapter 562 to read as follows:
10	10	CHAPTER 562. UNFAIR METHODS OF COMPETITION AND
11	11	UNFAIR OR DECEPTIVE ACTS OR PRACTICES REGARDING
12	12	DISCOUNT HEALTH CARE PROGRAMS
13	13	SUBCHAPTER A. GENERAL PROVISIONS
14	14	Sec. 562.001. PURPOSE. The purpose of this chapter is to
15	15	regulate trade practices in the business of discount health care
16	16	programs by:
17	17	(1) defining or providing for the determination of
18	18	trade practices in this state that are unfair methods of
19	19	competition or unfair or deceptive acts or practices; and
20	20	(2) prohibiting those unfair or deceptive trade
21	21	practices.
22	22	Sec. 562.002. DEFINITIONS. In this chapter:
23	23	(1) "Advertisement, solicitation, or marketing
24	24	material" means material that is made, published, disseminated,
25	25	circulated, or placed before the public:
26	26	(A) in a newspaper, magazine, or other
27	27	publication;
28	28	(B) in a notice, circular, pamphlet, letter, or
29	29	poster;
30	30	(C) over a radio or television station;
31	31	(D) through the Internet;
32	32	(E) in a telephone sales script; or
33	33	(F) in any other manner.
34	34	(2) "Discount health care program" means a business
35	35	arrangement or contract in which an entity, in exchange for fees,
36	36	dues, charges, or other consideration, offers its members access to
37	37	discounts on health care services provided by health care
38	38	providers. The term does not include an insurance policy,
39	39	certificate of coverage, or other product otherwise regulated by
40	40	the department or a self-funded or self-insured employee benefit
41	41	plan.
42	42	(3) "Discount health care program operator" means a
43	43	person who, in exchange for fees, dues, charges, or other
44	44	consideration, operates a discount health care program and
45	45	contracts with providers, provider networks, or other discount
46	46	health care program operators to offer access to health care
47	47	services at a discount and determines the charge to members.
48	48	(4) "Health care services" includes physician care,
49	49	inpatient care, hospital surgical services, emergency services,
50	50	ambulance services, laboratory services, audiology services,
51	51	dental services, vision services, mental health services,
52	52	substance abuse services, chiropractic services, and podiatry
53	53	services, and the provision of medical equipment and supplies,
54	54	including prescription drugs.
55	55	(5) "Marketer" means a person who sells or
56	56	distributes, or offers to sell or distribute, a discount health
57	57	care program, including a private label entity that places its name
58	58	on and markets or distributes a discount health care program, but
59	59	does not operate a discount health care program.
60	60	(6) "Member" means a person who pays fees, dues,
61	61	charges, or other consideration for the right to participate in a
62	62	discount health care program.
63	63	(7) "Person" means an individual, corporation,
64	64	association, partnership, or other legal entity.
65	65	(8) "Program operator" means a discount health plan
66	66	program operator.
67	67	(9) "Provider" means a person who is licensed or
68	68	otherwise authorized to provide health care services in this state.
69	69	Sec. 562.003. VENUE FOR ACTIONS INVOLVING DEPARTMENT OR
70	70	COMMISSIONER. An action under this chapter in which the department
71	71	or commissioner is a party must be brought in a district court in
72	72	Travis County.
73	73	Sec. 562.004. APPLICABILITY. Except as otherwise provided
74	74	by this chapter, a program operator, including the operator of a
75	75	freestanding discount health care program or a discount health care
76	76	program marketed by an insurer or a health maintenance
77	77	organization, shall comply with this chapter.
78	78	Sec. 562.005. LIBERAL CONSTRUCTION. This chapter shall be
79	79	liberally construed and applied to promote the underlying purposes
80	80	as provided by Section 562.001.
81	81	[Sections 562.006-562.050 reserved for expansion]
82	82	SUBCHAPTER B. UNFAIR METHODS OF COMPETITION AND
83	83	UNFAIR OR DECEPTIVE ACTS OR PRACTICES DEFINED
84	84	Sec. 562.051. MISREPRESENTATION REGARDING DISCOUNT HEALTH
85	85	CARE PROGRAM. It is an unfair method of competition or an unfair or
86	86	deceptive act or practice in the business of discount health care
87	87	programs to:
88	88	(1) misrepresent the price range of discounts offered
89	89	by the discount health care program;
90	90	(2) misrepresent the size or location of the program's
91	91	network of providers;
92	92	(3) misrepresent the participation of a provider in
93	93	the program's network;
94	94	(4) suggest that a discount card offered through the
95	95	program is a federally approved Medicare prescription discount
96	96	card;
97	97	(5) use the term "insurance," except as:
98	98	(A) a disclaimer of any relationship between the
99	99	discount health care program and insurance; or
100	100	(B) a description of an insurance product
101	101	connected with a discount health care program; or
102	102	(6) use the term "health plan," "coverage," "copay,"
103	103	"copayments," "deductible," "preexisting conditions," "guaranteed
104	104	issue," "premium," "PPO," or "preferred provider organization," or
105	105	another similar term, in a manner that could reasonably mislead an
106	106	individual into believing that the discount health care program is
107	107	health insurance or provides coverage similar to health insurance.
108	108	Sec. 562.052. FALSE INFORMATION AND ADVERTISING. It is an
109	109	unfair method of competition or an unfair or deceptive act or
110	110	practice in the business of discount health care programs to make,
111	111	publish, disseminate, circulate, or place before the public or
112	112	directly or indirectly cause to be made, published, disseminated,
113	113	circulated, or placed before the public an advertisement,
114	114	solicitation, or marketing material containing an untrue,
115	115	deceptive, or misleading assertion, representation, or statement
116	116	regarding the discount health care program.
117	117	Sec. 562.053. FAILURE TO REGISTER OR RENEW REGISTRATION;
118	118	FALSE REGISTRATION OR RENEWAL STATEMENT. (a) It is an unfair
119	119	method of competition or an unfair or deceptive act or practice in
120	120	the business of discount health care programs to:
121	121	(1) fail to register or renew registration as required
122	122	under Chapter 7001; or
123	123	(2) with intent to deceive:
124	124	(A) file with the department a false statement in
125	125	connection with an application for registration as a program
126	126	operator under Chapter 7001; or
127	127	(B) file with the department a false statement in
128	128	connection with an application for renewal of a registration as a
129	129	program operator under Chapter 7001.
130	130	(b) The commissioner may impose on a person operating a
131	131	discount health care program for the person's failure to register
132	132	or renew registration as required under Chapter 7001 any remedy
133	133	that the commissioner is authorized to impose under Chapter 101 for
134	134	the unauthorized business of insurance.
135	135	Sec. 562.054. MISREPRESENTATION OF DISCOUNT HEALTH CARE
136	136	PROGRAMS. It is an unfair method of competition or an unfair or
137	137	deceptive act or practice in the business of discount health care
138	138	programs to misrepresent a discount health care program by:
139	139	(1) making an untrue statement of material fact;
140	140	(2) failing to state a material fact necessary to make
141	141	other statements made not misleading, considering the
142	142	circumstances under which the statements were made;
143	143	(3) making a statement in a manner that would mislead a
144	144	reasonably prudent person to a false conclusion of a material fact;
145	145	(4) making a material misstatement of law; or
146	146	(5) failing to disclose a matter required by law to be
147	147	disclosed, including failing to make an applicable disclosure
148	148	required by this code.
149	149	[Sections 562.055-562.100 reserved for expansion]
150	150	SUBCHAPTER C. REGULATION OF PRACTICES
151	151	Sec. 562.101. UNFAIR METHODS OF COMPETITION AND UNFAIR OR
152	152	DECEPTIVE ACTS OR PRACTICES PROHIBITED. A person may not engage in
153	153	this state in a trade practice that is defined in this chapter as or
154	154	determined under this chapter to be an unfair method of competition
155	155	or an unfair or deceptive act or practice in the business of
156	156	discount health care programs.
157	157	Sec. 562.102. PROHIBITED CONTENT OF CERTAIN DISCOUNT HEALTH
158	158	CARE PROGRAM ADVERTISING, SOLICITATION, OR MARKETING.
159	159	Notwithstanding any other provision of this code, it is unlawful
160	160	for a program operator or marketer to advertise, solicit, or market
161	161	a discount health care program containing the words "approved by
162	162	the Texas Department of Insurance" or words with a similar meaning.
163	163	Sec. 562.103. PROGRAM OPERATOR DUTIES. (a) A program
164	164	operator shall:
165	165	(1) provide a toll-free telephone number and Internet
166	166	website for members to obtain information about the discount health
167	167	care program and confirm or find providers currently participating
168	168	in the program; and
169	169	(2) remove a provider from the discount health care
170	170	program not later than the 30th day after the date the program
171	171	operator learns that the provider is no longer participating in the
172	172	program or has lost the authority to provide services or products.
173	173	(b) A program operator shall issue at least one membership
174	174	card to serve as proof of membership in the discount health care
175	175	program that must:
176	176	(1) contain a clear and conspicuous statement that the
177	177	discount health care program is not insurance; and
178	178	(2) if the discount health care program includes
179	179	discount prescription drug benefits, include:
180	180	(A) the name or logo of the entity administering
181	181	the prescription drug benefits;
182	182	(B) the international identification number
183	183	assigned by the American National Standards Institute for the
184	184	entity administering the prescription drug benefits;
185	185	(C) the group number applicable to the member;
186	186	and
187	187	(D) a telephone number to be used to contact an
188	188	appropriate person to obtain information relating to the
189	189	prescription drug benefits provided under the program.
190	190	(c) Not later than the 15th day after the date of
191	191	enrollment, a program operator shall issue at least one set of
192	192	disclosure materials describing the terms and conditions of the
193	193	discount health care program to each household in which a person is
194	194	a member, including a statement that:
195	195	(1) the discount health care program is not insurance,
196	196	with the word "not" capitalized;
197	197	(2) the member is required to pay the entire amount of
198	198	the discounted rate;
199	199	(3) the discount health care program does not
200	200	guarantee the quality of the services or products offered by
201	201	individual providers; and
202	202	(4) if the member remains dissatisfied after
203	203	completing the discount health care program's complaint system, the
204	204	member may contact the member's state insurance department.
205	205	(d) A program operator shall ensure that an application form
206	206	or other membership agreement:
207	207	(1) clearly and conspicuously discloses the duration
208	208	of membership and the amount of payments the member is obligated to
209	209	make for the membership; and
210	210	(2) contains a clear and conspicuous statement that
211	211	the discount health care program is not insurance.
212	212	(e) A program operator shall allow any member who cancels a
213	213	membership in the discount health care program not later than the
214	214	30th day after the date the person becomes a member to receive a
215	215	refund, not later than the 30th day after the date the program
216	216	operator receives a valid cancellation notice and returned
217	217	membership card, of all periodic membership charges paid by that
218	218	member to the program operator and the amount of any one-time
219	219	enrollment fee that exceeds $50.
220	220	(f) A program operator shall:
221	221	(1) maintain a surety bond, payable to the department
222	222	for the use and benefit of members in a manner prescribed by the
223	223	department, in the principal amount of $50,000, except that a
224	224	program operator that is an insurer that holds a certificate of
225	225	authority under Title 6 is not required to maintain the surety bond;
226	226	(2) maintain an agent for service of process in this
227	227	state; and
228	228	(3) establish and operate a fair and efficient
229	229	procedure for resolution of complaints regarding the availability
230	230	of contracted discounts or services or other matters relating to
231	231	the contractual obligations of the discount health care program to
232	232	its members.
233	233	Sec. 562.104. MARKETING OF PROGRAM. (a) A program operator
234	234	may market directly or contract with marketers for the distribution
235	235	of the program operator's discount health care programs.
236	236	(b) A program operator shall enter into a written contract
237	237	with a marketer before the marketer begins marketing, promoting,
238	238	selling, or distributing the program operator's discount health
239	239	care program. The contract must prohibit the marketer from using an
240	240	advertisement, solicitation, or other marketing material or a
241	241	discount card that has not been approved in advance and in writing
242	242	by the program operator.
243	243	(c) A program operator must approve in writing before their
244	244	use all advertisements, solicitations, or other marketing
245	245	materials and all discount cards used by marketers to market,
246	246	promote, sell, or distribute the discount health care program.
247	247	(d) Each advertisement, solicitation, or marketing material
248	248	of a discount health care program must clearly and conspicuously
249	249	state that the discount health care program is not insurance.
250	250	Sec. 562.105. CONTRACT REQUIREMENTS. (a) A program
251	251	operator shall contract, directly or indirectly, with a provider
252	252	offering discounted health care services or products under the
253	253	discount health care program. The written contract must contain
254	254	all of the following provisions:
255	255	(1) a description of the discounts to be provided to a
256	256	member;
257	257	(2) a provision prohibiting the provider from charging
258	258	a member more than the discounted rate agreed to in the written
259	259	agreement with the provider; and
260	260	(3) a provision requiring the provider to promptly
261	261	notify the program operator if the provider no longer participates
262	262	in the program or loses the authority to provide services or
263	263	products.
264	264	(b) The program operator may not charge or receive from a
265	265	provider any fee or other compensation for entering into the
266	266	agreement.
267	267	(c) If the program operator contracts with a network of
268	268	providers, the program operator shall obtain written assurance from
269	269	the network that:
270	270	(1) the network has a written agreement with each
271	271	network provider that includes a discounted rate that is applicable
272	272	to a program operator's discount health care program and contains
273	273	all of the terms described in Subsection (a); and
274	274	(2) the network is authorized to obligate the network
275	275	providers to provide services to members of the discount health
276	276	care program.
277	277	(d) The program operator shall require the network to:
278	278	(1) maintain and provide the program operator on a
279	279	monthly basis an up-to-date list of providers in the network; and
280	280	(2) promptly remove a provider from its network if the
281	281	provider no longer participates or loses the authority to provide
282	282	services or products.
283	283	(e) The program operator shall maintain a copy of each
284	284	written agreement the program operator has with a provider or a
285	285	network for at least two years following termination of the
286	286	agreement.
287	287	Sec. 561.106. SUBMISSION OF MATERIALS. If the commissioner
288	288	reasonably believes that a program operator or a marketer may not be
289	289	operating in compliance with this chapter, the commissioner by
290	290	order may require the program operator or the marketer to submit to
291	291	the commissioner any advertisement, solicitation, or marketing
292	292	material, disclosure material, discount card, agreement, or other
293	293	document requested by the commissioner.
294	294	[Sections 562.107-562.150 reserved for expansion]
295	295	SUBCHAPTER D. DETERMINATION OF UNFAIR METHODS OF COMPETITION AND
296	296	UNFAIR OR DECEPTIVE ACTS OR PRACTICES; ENFORCEMENT; SANCTIONS AND
297	297	PENALTIES
298	298	Sec. 562.151. EXAMINATION AND INVESTIGATION. The
299	299	department may examine and investigate the affairs of a person
300	300	engaged in the business of discount health care programs in this
301	301	state to determine whether the person:
302	302	(1) has or is engaged in an unfair method of
303	303	competition or unfair or deceptive act or practice prohibited by
304	304	this chapter; or
305	305	(2) has violated Subchapter B or C.
306	306	Sec. 562.152. STATEMENT OF CHARGES; NOTICE OF HEARING. (a)
307	307	When the department has reason to believe that a person engaged in
308	308	the business of discount health care programs in this state has
309	309	engaged or is engaging in this state in an unfair method of
310	310	competition or unfair or deceptive act or practice defined by
311	311	Subchapter B or has violated Subchapter B or C and that a proceeding
312	312	by the department regarding the charges is in the interest of the
313	313	public, the department shall issue and serve on the person:
314	314	(1) a statement of the charges; and
315	315	(2) a notice of the hearing on the charges, including
316	316	the time and place for the hearing.
317	317	(b) The department may not hold the hearing before the sixth
318	318	day after the date the notice required by Subsection (a)(2) is
319	319	served.
320	320	Sec. 562.153. HEARING. A person against whom charges are
321	321	made under Section 562.152 is entitled at the hearing on the charges
322	322	to have an opportunity to be heard and show cause why the department
323	323	should not issue an order requiring the person to cease and desist
324	324	from:
325	325	(1) performing the unfair method of competition or
326	326	unfair or deceptive act or practice described in the charges; or
327	327	(2) violating Subchapter B or C.
328	328	Sec. 562.154. HEARING PROCEDURES. (a) Nothing in this
329	329	chapter requires the observance of formal rules of pleading or
330	330	evidence at a hearing under this subchapter.
331	331	(b) At a hearing under this subchapter, the department, on a
332	332	showing of good cause, shall permit any person to intervene,
333	333	appear, and be heard by counsel or in person.
334	334	Sec. 562.155. RECORD OF HEARING. (a) At a hearing under
335	335	this subchapter, the department may, and at the request of a party
336	336	to the hearing shall, make a record of the proceedings and the
337	337	evidence presented at the hearing.
338	338	(b) If the department does not make a record and a person
339	339	seeks judicial review of the decision made at the hearing, the
340	340	department shall prepare a statement of the evidence and proceeding
341	341	for use on review.
342	342	Sec. 562.156. COMPLIANCE WITH SUBPOENA. (a) If a person
343	343	refuses to comply with a subpoena issued in connection with a
344	344	hearing under this subchapter or refuses to testify with respect to
345	345	a matter about which the person may be lawfully interrogated, on
346	346	application of the department, a district court in Travis County or
347	347	in the county in which the person resides may order the person to
348	348	comply with the subpoena or testify.
349	349	(b) A court may punish as contempt a person's failure to
350	350	obey an order under this section.
351	351	Sec. 562.157. DETERMINATION OF VIOLATION. After a hearing
352	352	under this subchapter to determine whether a person has engaged in
353	353	an unfair method of competition or unfair or deceptive act or
354	354	practice prohibited by this chapter, the department shall determine
355	355	whether:
356	356	(1) the method of competition or the act or practice
357	357	considered in the hearing is defined as:
358	358	(A) an unfair method of competition or deceptive
359	359	act or practice under Subchapter B; or
360	360	(B) a false, misleading, or deceptive act or
361	361	practice under Section 17.46, Business & Commerce Code; and
362	362	(2) the person against whom the charges were made
363	363	engaged in the method of competition or act or practice in violation
364	364	of:
365	365	(A) this chapter; or
366	366	(B) Subchapter E, Chapter 17, Business & Commerce
367	367	Code, as specified in Section 17.46, Business & Commerce Code.
368	368	Sec. 562.158. CEASE AND DESIST ORDER. On determining that a
369	369	person committed a violation described by Section 562.157 or
370	370	committed a violation of Subchapter B or C, the department shall:
371	371	(1) make written findings; and
372	372	(2) issue and serve on the person an order requiring
373	373	the person to cease and desist from engaging in the method of
374	374	competition or act or practice determined to be a violation or the
375	375	violation of Subchapter B or C, as applicable.
376	376	Sec. 562.159. MODIFICATION OR SETTING ASIDE OF ORDER. On
377	377	the notice and in the manner the department determines proper, the
378	378	department may modify or set aside wholly or partly a cease and
379	379	desist order issued under Section 562.158 at any time before a
380	380	petition appealing the order is filed in accordance with Subchapter
381	381	D, Chapter 36.
382	382	Sec. 562.160. ADMINISTRATIVE PENALTY FOR VIOLATION OF CEASE
383	383	AND DESIST ORDER. (a) A person who violates a cease and desist
384	384	order issued under Section 562.158 is subject to an administrative
385	385	penalty under Chapter 84.
386	386	(b) In determining whether a person has violated a cease and
387	387	desist order, the department shall consider the maintenance of
388	388	procedures reasonably adapted to ensure compliance with the order.
389	389	(c) An administrative penalty imposed under this section
390	390	may not exceed:
391	391	(1) $1,000 for each violation; or
392	392	(2) $5,000 for all violations.
393	393	(d) An order of the department imposing an administrative
394	394	penalty under this section applies only to a violation of the cease
395	395	and desist order committed before the date the order imposing the
396	396	penalty is issued.
397	397	Sec. 562.161. CIVIL PENALTY FOR VIOLATION OF CEASE AND
398	398	DESIST ORDER. (a) A person who is found by a court to have violated
399	399	a cease and desist order issued under Section 562.158 is liable to
400	400	the state for a penalty. The state may recover the penalty in a
401	401	civil action.
402	402	(b) The penalty may not exceed $50 unless the court finds
403	403	the violation to be wilful, in which case the penalty may not exceed
404	404	$500.
405	405	[Sections 562.162-562.200 reserved for expansion]
406	406	SUBCHAPTER E. ENFORCEMENT BY ATTORNEY GENERAL
407	407	Sec. 562.201. INJUNCTIVE RELIEF. (a) The attorney general
408	408	may bring an action under this section if the attorney general has
409	409	reason to believe that:
410	410	(1) a person engaged in the business of discount
411	411	health care programs in this state is engaging in, has engaged in,
412	412	or is about to engage in an act or practice defined as unlawful
413	413	under:
414	414	(A) this chapter; or
415	415	(B) Section 17.46, Business & Commerce Code; and
416	416	(2) the action is in the public interest.
417	417	(b) The attorney general may bring the action in the name of
418	418	the state to restrain by temporary or permanent injunction the
419	419	person's use of the method, act, or practice.
420	420	Sec. 562.202. VENUE FOR INJUNCTIVE ACTION. An action for an
421	421	injunction under this subchapter may be commenced in a district
422	422	court in:
423	423	(1) the county in which the person against whom the
424	424	action is brought:
425	425	(A) resides;
426	426	(B) has the person's principal place of business;
427	427	or
428	428	(C) is engaging in business;
429	429	(2) the county in which the transaction or a
430	430	substantial portion of the transaction occurred; or
431	431	(3) Travis County.
432	432	Sec. 562.203. ISSUANCE OF INJUNCTION. (a) The court may
433	433	issue an appropriate temporary or permanent injunction.
434	434	(b) The court shall issue the injunction without bond.
435	435	Sec. 562.204. CIVIL PENALTY. In addition to requesting a
436	436	temporary or permanent injunction under Section 562.201, the
437	437	attorney general may request a civil penalty of not more than
438	438	$20,000 for each violation on a finding by the court that the
439	439	defendant has engaged in or is engaging in an act or practice
440	440	defined as unlawful under this chapter or Section 17.46, Business &
441	441	Commerce Code.
442	442	Sec. 562.205. COMPENSATION OR RESTORATION. The court may
443	443	make an additional order or judgment as necessary to compensate an
444	444	identifiable person for actual damages or for restoration of money
445	445	or property that may have been acquired by means of an enjoined act
446	446	or practice.
447	447	Sec. 562.206. CIVIL PENALTY FOR VIOLATION OF INJUNCTION.
448	448	(a) A person who violates an injunction issued under this
449	449	subchapter is liable for and shall pay to the state a civil penalty
450	450	of not more than $10,000 for each violation.
451	451	(b) The attorney general may, in the name of the state,
452	452	petition the court for recovery of the civil penalty against the
453	453	person who violates the injunction.
454	454	(c) The court shall consider the maintenance of procedures
455	455	reasonably adapted to ensure compliance with the injunction in
456	456	determining whether a person has violated an injunction.
457	457	(d) The court issuing the injunction retains jurisdiction
458	458	and the cause is continued for the purpose of assessing a civil
459	459	penalty under this section.
460	460	Sec. 562.207. REMEDIES NOT EXCLUSIVE. The remedies
461	461	provided by this subchapter:
462	462	(1) are not exclusive; and
463	463	(2) are in addition to any other remedy or procedure
464	464	provided by another law or at common law.
465	465	[Sections 562.208-562.250 reserved for expansion]
466	466	SUBCHAPTER F. ASSURANCE OF VOLUNTARY COMPLIANCE
467	467	Sec. 562.251. ACCEPTANCE OF ASSURANCE. (a) In
468	468	administering this chapter, the department may accept assurance of
469	469	voluntary compliance from a person who is engaging in, has engaged
470	470	in, or is about to engage in an act or practice in violation of this
471	471	chapter or Section 17.46, Business & Commerce Code.
472	472	(b) The assurance must be in writing and be filed with the
473	473	department.
474	474	(c) The department may condition acceptance of an assurance
475	475	of voluntary compliance on the stipulation that the person offering
476	476	the assurance restore to a person in interest money that may have
477	477	been acquired by the act or practice described in Subsection (a).
478	478	Sec. 562.252. EFFECT OF ASSURANCE. (a) An assurance of
479	479	voluntary compliance is not an admission of a prior violation of
480	480	this chapter or Section 17.46, Business & Commerce Code.
481	481	(b) Unless an assurance of voluntary compliance is
482	482	rescinded by agreement, a subsequent failure to comply with the
483	483	assurance is prima facie evidence of a violation of this chapter or
484	484	Section 17.46, Business & Commerce Code.
485	485	Sec. 562.253. REOPENING. A matter closed by the filing of
486	486	an assurance of voluntary compliance may be reopened at any time.
487	487	[Sections 562.254-562.300 reserved for expansion]
488	488	SUBCHAPTER G. CONSTRUCTION OF CHAPTER WITH OTHER LAWS
489	489	Sec. 562.301. LIABILITY UNDER OTHER LAW. An order of the
490	490	department under this chapter, or an order by a court to enforce
491	491	that order, does not relieve or absolve a person affected by either
492	492	order from liability under another law of this state.
493	493	Sec. 562.302. POWERS IN ADDITION TO OTHER POWERS AUTHORIZED
494	494	BY LAW. The powers vested in the department and the commissioner by
495	495	this chapter are in addition to any other powers to enforce a
496	496	penalty, fine, or forfeiture authorized by law with respect to a
497	497	method of competition or act or practice defined as unfair or
498	498	deceptive.
499	499	Sec. 562.303. DOUBLE RECOVERY PROHIBITED. A person may not
500	500	recover damages and penalties for the same act or practice under
501	501	both this chapter and another law.
502	502	SECTION 2. The Insurance Code is amended by adding Title 21
503	503	to read as follows:
504	504	TITLE 21. DISCOUNT HEALTH CARE PROGRAMS
505	505	CHAPTER 7001. REGISTRATION OF DISCOUNT HEALTH CARE
506	506	PROGRAM OPERATORS
507	507	Sec. 7001.001. DEFINITIONS. In this chapter:
508	508	(1) "Discount health care program" means a business
509	509	arrangement or contract in which an entity, in exchange for fees,
510	510	dues, charges, or other consideration, offers its members access to
511	511	discounts on health care services provided by health care
512	512	providers. The term does not include an insurance policy,
513	513	certificate of coverage, or other product otherwise regulated by
514	514	the department or a self-funded or self-insured employee benefit
515	515	plan.
516	516	(2) "Discount health care program operator" means a
517	517	person who, in exchange for fees, dues, charges, or other
518	518	consideration, operates a discount health care program and
519	519	contracts with providers, provider networks, or other discount
520	520	health care program operators to offer access to health care
521	521	services at a discount and determines the charge to members.
522	522	(3) "Health care services" includes physician care,
523	523	inpatient care, hospital surgical services, emergency services,
524	524	ambulance services, laboratory services, audiology services,
525	525	dental services, vision services, mental health services,
526	526	substance abuse services, chiropractic services, and podiatry
527	527	services, and the provision of medical equipment and supplies,
528	528	including prescription drugs.
529	529	(4) "Marketer" means a person who sells or
530	530	distributes, or offers to sell or distribute, a discount health
531	531	care program, including a private label entity that places its name
532	532	on and markets or distributes a discount health care program, but
533	533	does not operate a discount health care program.
534	534	(5) "Member" means a person who pays fees, dues,
535	535	charges, or other consideration for the right to participate in a
536	536	discount health care program.
537	537	(6) "Program operator" means a discount health plan
538	538	program operator.
539	539	(7) "Provider" means a person who is licensed or
540	540	otherwise authorized to provide health care services in this state.
541	541	Sec. 7001.002. EXEMPTION. This chapter does not apply to a
542	542	program operator who is an insurer and who holds a certificate of
543	543	authority under Title 6.
544	544	Sec. 7001.003. RULES. The commissioner shall adopt rules
545	545	in the manner prescribed by Subchapter A, Chapter 36, as necessary
546	546	to implement this chapter.
547	547	Sec. 7001.004. REGISTRATION REQUIRED. A discount health
548	548	care program operator may not offer a discount health care program
549	549	in this state unless the program operator is registered with the
550	550	department.
551	551	Sec. 7001.005. APPLICATION FOR REGISTRATION AND RENEWAL OF
552	552	REGISTRATION. (a) An applicant for registration under this
553	553	chapter or an applicant for renewal of registration under this
554	554	chapter whose information has changed shall submit:
555	555	(1) a completed registration application on the form
556	556	prescribed by the department indicating the program operator's
557	557	name, physical address, and mailing address and its agent for
558	558	service of process;
559	559	(2) a list of names, addresses, official positions,
560	560	and biographical information of:
561	561	(A) the individuals responsible for conducting
562	562	the program operator's affairs, including:
563	563	(i) each member of the board of directors,
564	564	board of trustees, executive committee, or other governing board or
565	565	committee;
566	566	(ii) the officers of the program operator;
567	567	and
568	568	(iii) any contracted management company
569	569	personnel; and
570	570	(B) any person owning or having the right to
571	571	acquire 10 percent or more of the voting securities of the program
572	572	operator;
573	573	(3) a statement generally describing the applicant,
574	574	its facilities and personnel, and the health care services or
575	575	products for which a discount will be made available under its
576	576	discount health care programs;
577	577	(4) a list of the marketers authorized to sell or
578	578	distribute the program operator's programs under the program
579	579	operator's name, a list of the marketing entities authorized to
580	580	private label the program operator's programs, and other
581	581	information about the marketers and marketing entities considered
582	582	necessary by the commissioner; and
583	583	(5) a copy of the form of all contracts made or to be
584	584	made between the program operator and any providers or provider
585	585	networks regarding the provision of health care services or
586	586	products to members.
587	587	(b) After the initial registration, if the form of a
588	588	contract described by Subsection (a)(5) changes, the program
589	589	operator must file the modified contract form with the department
590	590	before it may be used.
591	591	(c) As part of the registration required under Subsection
592	592	(a), and annually thereafter, the program operator shall certify in
593	593	writing to the department that its programs comply with the
594	594	requirements of this chapter and Chapter 562.
595	595	Sec. 7001.006. FEES. A discount health care program
596	596	operator shall pay the department an initial registration fee of
597	597	$1,000 and an annual renewal fee in the amount set by the
598	598	commissioner not to exceed $500.
599	599	Sec. 7001.007. DEPOSIT IN OPERATING ACCOUNT. All fees
600	600	collected by the department under this chapter shall be deposited
601	601	to the credit of the Texas Department of Insurance operating
602	602	account.
603	603	Sec. 7001.008. CRIMINAL BACKGROUND CHECK. The department
604	604	may conduct a criminal background check on:
605	605	(1) the individuals responsible for conducting the
606	606	program operator's affairs;
607	607	(2) each member of the board of directors, board of
608	608	trustees, executive committee, or other governing board or
609	609	committee;
610	610	(3) the officers of the program operator;
611	611	(4) any contracted management company personnel; and
612	612	(5) any person owning or having the right to acquire 10
613	613	percent or more of the voting securities of the program operator.
614	614	Sec. 7001.009. ENFORCEMENT. (a) The department may deny a
615	615	registration application or take any action authorized under
616	616	Chapters 82, 83, and 84 if the department determines that the
617	617	applicant or registered discount health care program operator,
618	618	individually or through an officer, director, or shareholder:
619	619	(1) has wilfully violated a provision of this code or
620	620	an order or rule of the commissioner;
621	621	(2) has intentionally made a material misstatement in
622	622	the registration application;
623	623	(3) has obtained or attempted to obtain a registration
624	624	by fraud or misrepresentation;
625	625	(4) has misappropriated, converted to the applicant's
626	626	or registration holder's own use, or illegally withheld money
627	627	belonging to a member of a discount health care program;
628	628	(5) has engaged in fraudulent or dishonest acts or
629	629	practices; or
630	630	(6) has been convicted of a felony.
631	631	(b) Chapter 2001, Government Code, applies to an action
632	632	taken under this section.
633	633	SECTION 3. Chapter 76, Health and Safety Code, is repealed.
634	634	SECTION 4. Not later than January 1, 2010, the commissioner
635	635	of insurance shall adopt the rules and procedures necessary to
636	636	implement Chapter 7001, Insurance Code, as added by this Act.
637	637	SECTION 5. (a) Notwithstanding Section 7001.004,
638	638	Insurance Code, as added by this Act, a person is not required to
639	639	register under that section before April 1, 2010, except as
640	640	provided by Subsection (b) of this section.
641	641	(b) A program operator that is registered with the Texas
642	642	Department of Licensing and Regulation on January 1, 2010, as
643	643	required by Chapter 76, Health and Safety Code, shall file an
644	644	application for renewal of registration with the Texas Department
645	645	of Insurance under Chapter 7001, Insurance Code, not later than
646	646	April 1, 2010.
647	647	SECTION 6. (a) Except as provided by Subsections (b) and
648	648	(c) of this section, this Act takes effect September 1, 2009.
649	649	(b) Section 3 of this Act takes effect April 1, 2010.
650	650	(c) Subchapter E, Chapter 562, Insurance Code, as added by
651	651	this Act, takes effect April 1, 2010.
652	652	______________________________ ______________________________
653	653	President of the Senate Speaker of the House
654	654	I certify that H.B. No. 4341 was passed by the House on May 6,
655	655	2009, by the following vote: Yeas 143, Nays 0, 1 present, not
656	656	voting; and that the House concurred in Senate amendments to H.B.
657	657	No. 4341 on May 23, 2009, by the following vote: Yeas 141, Nays 0,
658	658	1 present, not voting.
659	659	______________________________
660	660	Chief Clerk of the House
661	661	I certify that H.B. No. 4341 was passed by the Senate, with
662	662	amendments, on May 19, 2009, by the following vote: Yeas 30, Nays
663	663	0.
664	664	______________________________
665	665	Secretary of the Senate
666	666	APPROVED: __________________
667	667	Date
668	668	__________________
669	669	Governor