By: Averitt S.B. No. 1257
(In the Senate - Filed March 3, 2009; March 17, 2009, read
first time and referred to Committee on State Affairs;
April 29, 2009, reported adversely, with favorable Committee
Substitute by the following vote: Yeas 6, Nays 1; April 29, 2009,
sent to printer.)
COMMITTEE SUBSTITUTE FOR S.B. No. 1257 By: Deuell
A BILL TO BE ENTITLED
AN ACT
relating to the regulation of certain market conduct activities of
certain life, accident, and health insurers and health benefit plan
issuers; providing civil liability and administrative and criminal
penalties.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
ARTICLE 1. RESCISSION OF HEALTH BENEFIT PLAN
SECTION 1.001. Subchapter B, Chapter 541, Insurance Code,
is amended by adding Section 541.062 to read as follows:
Sec. 541.062. BAD FAITH RESCISSION. (a) For purposes of
this section, "rescission" has the meaning assigned by Section
1202.101.
(b) It is an unfair method of competition or an unfair or
deceptive act or practice for a health benefit plan issuer to:
(1) set rescission goals, quotas, or targets;
(2) pay compensation of any kind, including a bonus or
award, that varies according to the number of rescissions;
(3) set, as a condition of employment, a number or
volume of rescissions to be achieved; or
(4) set a performance standard, for employees or by
contract with another entity, based on the number or volume of
rescissions.
SECTION 1.002. Chapter 1202, Insurance Code, is amended by
adding Subchapter C to read as follows:
SUBCHAPTER C. INDEPENDENT REVIEW OF CERTAIN RESCISSION DECISIONS
Sec. 1202.101. DEFINITIONS. In this subchapter:
(1) "Affected individual" means an individual who is
otherwise entitled to benefits under a health benefit plan that is
subject to a decision to rescind.
(2) "Independent review organization" means an
organization certified under Chapter 4202.
(3) "Rescission" means the termination of an insurance
agreement, contract, evidence of coverage, insurance policy, or
other similar coverage document in which the health benefit plan
issuer refunds premium payments or, if applicable, demands the
restitution of any benefit paid under the plan, on the ground that
the issuer is entitled to restoration of the issuer's
precontractual position.
(4) "Screening criteria" means the elements or factors
used in a determination of whether to subject an issued health
benefit plan to additional review for possible rescission,
including any applicable dollar amount or number of claims
submitted.
Sec. 1202.102. APPLICABILITY. (a) This subchapter
applies only to a health benefit plan, including a small or large
employer health benefit plan written under Chapter 1501, that
provides benefits for medical or surgical expenses incurred as a
result of a health condition, accident, or sickness, including an
individual, group, blanket, or franchise insurance policy or
insurance agreement, a group hospital service contract, or an
individual or group evidence of coverage or similar coverage
document that is offered by:
(1) an insurance company;
(2) a group hospital service corporation operating
under Chapter 842;
(3) a fraternal benefit society operating under
Chapter 885;
(4) a stipulated premium company operating under
Chapter 884;
(5) a reciprocal exchange operating under Chapter 942;
(6) a Lloyd's plan operating under Chapter 941;
(7) a health maintenance organization operating under
Chapter 843;
(8) a multiple employer welfare arrangement that holds
a certificate of authority under Chapter 846; or
(9) an approved nonprofit health corporation that
holds a certificate of authority under Chapter 844.
(b) This subchapter does not apply to:
(1) a health benefit plan that provides coverage:
(A) only for a specified disease or for another
limited benefit other than an accident policy;
(B) only for accidental death or dismemberment;
(C) for wages or payments in lieu of wages for a
period during which an employee is absent from work because of
sickness or injury;
(D) as a supplement to a liability insurance
policy;
(E) for credit insurance;
(F) only for dental or vision care;
(G) only for hospital expenses; or
(H) only for indemnity for hospital confinement;
(2) a Medicare supplemental policy as defined by
Section 1882(g)(1), Social Security Act (42 U.S.C. Section 1395ss),
as amended;
(3) a workers' compensation insurance policy;
(4) medical payment insurance coverage provided under
a motor vehicle insurance policy;
(5) a long-term care insurance policy, including a
nursing home fixed indemnity policy, unless the commissioner
determines that the policy provides benefit coverage so
comprehensive that the policy is a health benefit plan described by
Subsection (a);
(6) a Medicaid managed care plan offered under Chapter
533, Government Code;
(7) any policy or contract of insurance with a state
agency, department, or board providing health services to eligible
individuals under Chapter 32, Human Resources Code; or
(8) a child health plan offered under Chapter 62,
Health and Safety Code, or a health benefits plan offered under
Chapter 63, Health and Safety Code.
Sec. 1202.103. RESCISSION FOR MISREPRESENTATION OR
PREEXISTING CONDITION. Notwithstanding any other law, a health
benefit plan issuer may not rescind a health benefit plan on the
basis of a misrepresentation or a preexisting condition except as
provided by this subchapter.
Sec. 1202.104. NOTICE OF INTENT TO RESCIND. (a) A health
benefit plan issuer may not rescind a health benefit plan on the
basis of a misrepresentation or a preexisting condition without
first notifying an affected individual in writing of the issuer's
intent to rescind the health benefit plan and the individual's
entitlement to an independent review.
(b) The notice required under Subsection (a) must include,
as applicable:
(1) the principal reasons for the decision to rescind
the health benefit plan;
(2) the clinical basis for a determination that a
preexisting condition exists;
(3) a description of any general screening criteria
used to evaluate issued health benefit plans and determine
eligibility for a decision to rescind;
(4) a statement that the individual is entitled to
appeal a rescission decision to an independent review organization;
(5) a statement that the individual has at least 45
days in which to appeal the rescission decision to an independent
review organization, and a description of the consequences of
failure to appeal within that time limit;
(6) a statement that there is no cost to the individual
to appeal the rescission decision to an independent review
organization; and
(7) a description of the independent review process
under Chapters 4201 and 4202.
Sec. 1202.105. INDEPENDENT REVIEW PROCESS; PAYMENT OF
CLAIMS. (a) An affected individual may appeal a health benefit
plan issuer's rescission decision to an independent review
organization not later than the 45th day after the date the
individual receives notice under Section 1202.104.
(b) A health benefit plan issuer shall comply with all
requests for information made by the independent review
organization and with the independent review organization's
determination regarding the appropriateness of the issuer's
decision to rescind.
(c) A health benefit plan issuer shall pay all otherwise
valid medical claims under an individual's plan until the later of:
(1) the date on which an independent review
organization determines that the decision to rescind is
appropriate; or
(2) the time to appeal to an independent review
organization has expired without an affected individual initiating
an appeal.
Sec. 1202.106. RESCISSION AUTHORIZED; RECOVERY OF CLAIMS
PAID. (a) A health benefit plan issuer may rescind a health
benefit plan covering an affected individual on the later of:
(1) the date an independent review organization
determines that rescission is appropriate; or
(2) the 45th day after the date an affected individual
receives notice under Section 1202.104, if the individual has not
initiated an appeal.
(b) An issuer that rescinds a health benefit plan under this
section may seek to recover from an affected individual amounts
paid for the individual's medical claims under the rescinded health
benefit plan.
(c) An issuer that rescinds a health benefit plan under this
section may not offset against or recoup or recover from a physician
or health care provider amounts paid for medical claims under a
rescinded health benefit plan. This subsection may not be waived,
voided, or modified by contract.
Sec. 1202.107. RESCISSION RELATED TO PREEXISTING
CONDITION; STANDARDS. (a) For purposes of this subchapter, a
rescission for a preexisting condition is appropriate if, within
the 18-month period immediately preceding the date on which an
application for coverage under a health benefit plan is made, an
affected individual received or was advised by a physician or
health care provider to seek medical advice, diagnosis, care, or
treatment for a physical or mental condition, regardless of the
cause, and the individual's failure to disclose the condition:
(1) affects the risks assumed under the health benefit
plan; and
(2) is undertaken with the intent to deceive the
health benefit plan issuer.
(b) A health benefit plan issuer may not rescind a health
benefit plan based on a preexisting condition of a newborn
delivered after the application for coverage is made or as may
otherwise be prohibited by law.
Sec. 1202.108. RESCISSION FOR MISREPRESENTATION;
STANDARDS. For purposes of this subchapter, a rescission for a
misrepresentation not related to a preexisting condition is
inappropriate unless the misrepresentation:
(1) is of a material fact;
(2) affects the risks assumed under the health benefit
plan; and
(3) is made with the intent to deceive the health
benefit plan issuer.
Sec. 1202.109. REMEDIES NOT EXCLUSIVE. The remedies
provided by this subchapter are not exclusive and are in addition to
any other remedy or procedure provided by law or at common law.
Sec. 1202.110. RULES. The commissioner shall adopt rules
necessary to implement and administer this subchapter.
Sec. 1202.111. SANCTIONS AND PENALTIES. A health benefit
plan issuer that violates this subchapter commits an unfair
practice in violation of Chapter 541 and is subject to sanctions and
penalties under Chapter 82.
Sec. 1202.112. CONFIDENTIALITY. (a) A record, report, or
other information received or maintained by a health benefit plan
issuer, including any material received or developed during a
review of a rescission decision under this subchapter, is
confidential.
(b) A health benefit plan issuer may not disclose the
identity of an individual or a decision to rescind an individual's
health benefit plan unless:
(1) an independent review organization determines the
decision to rescind is appropriate; or
(2) the time to appeal has expired without an affected
individual initiating an appeal.
SECTION 1.003. Section 4202.002, Insurance Code, is amended
to read as follows:
Sec. 4202.002. ADOPTION OF STANDARDS FOR INDEPENDENT REVIEW
ORGANIZATIONS. (a) The commissioner shall adopt standards and
rules for:
(1) the certification, selection, and operation of
independent review organizations to perform independent review
described by Subchapter C, Chapter 1202, or Subchapter I, Chapter
4201; and
(2) the suspension and revocation of the
certification.
(b) The standards adopted under this section must ensure:
(1) the timely response of an independent review
organization selected under this chapter;
(2) the confidentiality of medical records
transmitted to an independent review organization for use in
conducting an independent review;
(3) the qualifications and independence of each
physician or other health care provider making a review
determination for an independent review organization;
(4) the fairness of the procedures used by an
independent review organization in making review determinations;
[and]
(5) the timely notice to an enrollee of the results of
an independent review, including the clinical basis for the review
determination; and
(6) that review of a rescission decision based on a
preexisting condition be conducted under the direction of a
physician.
SECTION 1.004. Sections 4202.003, 4202.004, and 4202.006,
Insurance Code, are amended to read as follows:
Sec. 4202.003. REQUIREMENTS REGARDING TIMELINESS OF
DETERMINATION. The standards adopted under Section 4202.002 must
require each independent review organization to make the
organization's determination:
(1) for a life-threatening condition as defined by
Section 4201.002, not later than the earlier of:
(A) the fifth day after the date the organization
receives the information necessary to make the determination; or
(B) the eighth day after the date the
organization receives the request that the determination be made;
and
(2) for a condition other than a life-threatening
condition or of the appropriateness of a rescission under
Subchapter C, Chapter 1202, not later than the earlier of:
(A) the 15th day after the date the organization
receives the information necessary to make the determination; or
(B) the 20th day after the date the organization
receives the request that the determination be made.
Sec. 4202.004. CERTIFICATION. To be certified as an
independent review organization under this chapter, an
organization must submit to the commissioner an application in the
form required by the commissioner. The application must include:
(1) for an applicant that is publicly held, the name of
each shareholder or owner of more than five percent of any of the
applicant's stock or options;
(2) the name of any holder of the applicant's bonds or
notes that exceed $100,000;
(3) the name and type of business of each corporation
or other organization that the applicant controls or is affiliated
with and the nature and extent of the control or affiliation;
(4) the name and a biographical sketch of each
director, officer, and executive of the applicant and of any entity
listed under Subdivision (3) and a description of any relationship
the named individual has with:
(A) a health benefit plan;
(B) a health maintenance organization;
(C) an insurer;
(D) a utilization review agent;
(E) a nonprofit health corporation;
(F) a payor;
(G) a health care provider; or
(H) a group representing any of the entities
described by Paragraphs (A) through (G);
(5) the percentage of the applicant's revenues that
are anticipated to be derived from independent reviews conducted
under Subchapter I, Chapter 4201;
(6) a description of the areas of expertise of the
physicians or other health care providers making review
determinations for the applicant; and
(7) the procedures to be used by the applicant in
making independent review determinations under Subchapter C,
Chapter 1202, or Subchapter I, Chapter 4201.
Sec. 4202.006. PAYORS FEES. (a) The commissioner shall
charge payors fees in accordance with this chapter as necessary to
fund the operations of independent review organizations.
(b) A health benefit plan issuer shall pay for an
independent review of a rescission decision under Subchapter C,
Chapter 1202.
SECTION 1.005. Section 4202.009, Insurance Code, is amended
to read as follows:
Sec. 4202.009. CONFIDENTIAL INFORMATION. (a) Information
that reveals the identity of a physician or other individual health
care provider who makes a review determination for an independent
review organization is confidential.
(b) A record, report, or other information received or
maintained by an independent review organization, including any
material received or developed during a review of a rescission
decision under Subchapter C, Chapter 1202, is confidential.
(c) An independent review organization may not disclose the
identity of an affected individual or an issuer's decision to
rescind a health benefit plan under Subchapter C, Chapter 1202,
unless:
(1) an independent review organization determines the
decision to rescind is appropriate; or
(2) the time to appeal a rescission under that
subchapter has expired without an affected individual initiating an
appeal.
SECTION 1.006. Subsection (a), Section 4202.010, Insurance
Code, is amended to read as follows:
(a) An independent review organization conducting an
independent review under Subchapter C, Chapter 1202, or Subchapter
I, Chapter 4201, is not liable for damages arising from the review
determination made by the organization.
SECTION 1.007. The change in law made by this article
applies only to an insurance policy that is delivered, issued for
delivery, or renewed on or after the effective date of this Act. An
insurance policy that is delivered, issued for delivery, or renewed
before the effective date of this Act is governed by the law as it
existed before the effective date of this Act, and that law is
continued in effect for that purpose.
ARTICLE 2. MEDICAL LOSS RATIOS
SECTION 2.001. Subchapter A, Chapter 1301, Insurance Code,
is amended by adding Section 1301.010 to read as follows:
Sec. 1301.010. MEDICAL LOSS RATIO. (a) In this section,
"medical loss ratio" means direct losses incurred and direct losses
paid for all preferred provider benefit plans issued by an insurer,
divided by direct premiums earned for all preferred provider
benefit plans issued by that insurer. This amount may not include
home office and overhead costs, advertising costs, network
development costs, commissions and other acquisition costs, taxes,
capital costs, administrative costs, utilization review costs, or
claims processing costs.
(b) An insurer shall report the insurer's medical loss ratio
annually or more often as required by the commissioner by rule or
order.
(c) A medical loss ratio reported under this section is
public information.
(d) The department shall include information on the medical
loss ratio on the department's Internet website.
(e) An insurer shall report to the master policyholder or
sponsor:
(1) the total dollar amount for health care claims
paid under the preferred provider benefit plan for the nine months
following the policy effective date or renewal date; and
(2) the total dollar amount of premiums paid by the
master policyholder or the sponsor and insureds.
(f) The commissioner shall adopt rules as necessary to
implement this section, including rules regarding:
(1) a specific, uniform definition of "medical loss
ratio" for reporting and disclosure purposes;
(2) the frequency and form of reporting medical loss
ratios;
(3) standardizing and regulating the frequency and
form of reporting cost-containment expenses separate from the
medical loss ratio; and
(4) any disclaimers or explanations that an insurer
may include in the report required by Subsection (e).
SECTION 2.002. (a) Not later than January 1, 2010, the
commissioner of insurance shall adopt all rules necessary to
implement Section 1301.010, Insurance Code, as added by this
article. The first reporting period under Subsection (b), Section
1301.010, Insurance Code, may not cover any period that begins
before January 1, 2010.
(b) Subsection (e), Section 1301.010, Insurance Code, as
added by this article, applies only to a preferred provider benefit
plan policy delivered, issued for delivery, or renewed on or after
January 1, 2010. A policy delivered, issued for delivery, or
renewed before that date is governed by the law in effect
immediately before the effective date of this Act, and that law is
continued in effect for that purpose.
ARTICLE 3. PREMIUM RATE INCREASES FOR SMALL EMPLOYER HEALTH
BENEFIT PLANS
SECTION 3.001. Subchapter D, Chapter 501, Insurance Code,
is amended by amending Sections 501.151 and 501.153 and adding
Section 501.160 to read as follows:
Sec. 501.151. POWERS AND DUTIES OF OFFICE. (a) The
office:
(1) may assess the impact of insurance rates, rules,
and forms on insurance consumers in this state; [and]
(2) shall advocate in the office's own name positions
determined by the public counsel to be most advantageous to a
substantial number of insurance consumers; and
(3) shall accept from a small employer, an eligible
employee, or an eligible employee's dependent and, if appropriate,
refer to the commissioner, a complaint described by Section
501.160.
(b) The decision to refer a complaint to the commissioner
under Subsection (a) is at the public counsel's sole discretion.
Sec. 501.153. AUTHORITY TO APPEAR, INTERVENE, OR INITIATE.
The public counsel:
(1) may appear or intervene, as a party or otherwise,
as a matter of right before the commissioner or department on behalf
of insurance consumers, as a class, in matters involving:
(A) rates, rules, and forms affecting:
(i) property and casualty insurance;
(ii) title insurance;
(iii) credit life insurance;
(iv) credit accident and health insurance;
or
(v) any other line of insurance for which
the commissioner or department promulgates, sets, adopts, or
approves rates, rules, or forms;
(B) rules affecting life, health, or accident
insurance; or
(C) withdrawal of approval of policy forms:
(i) in proceedings initiated by the
department under Sections 1701.055 and 1701.057; or
(ii) if the public counsel presents
persuasive evidence to the department that the forms do not comply
with this code, a rule adopted under this code, or any other law;
(2) may initiate or intervene as a matter of right or
otherwise appear in a judicial proceeding involving or arising from
an action taken by an administrative agency in a proceeding in which
the public counsel previously appeared under the authority granted
by this chapter;
(3) may appear or intervene, as a party or otherwise,
as a matter of right on behalf of insurance consumers as a class in
any proceeding in which the public counsel determines that
insurance consumers are in need of representation, except that the
public counsel may not intervene in an enforcement or parens
patriae proceeding brought by the attorney general; [and]
(4) may appear or intervene before the commissioner or
department as a party or otherwise on behalf of small commercial
insurance consumers, as a class, in a matter involving rates,
rules, or forms affecting commercial insurance consumers, as a
class, in any proceeding in which the public counsel determines
that small commercial consumers are in need of representation; and
(5) may appear before the commissioner on behalf of a
small employer, eligible employee, or eligible employee's
dependent in a complaint the office refers to the commissioner
under Section 501.160.
Sec. 501.160. COMPLAINT RESOLUTION FOR CERTAIN PREMIUM RATE
INCREASES. (a) A small employer, an eligible employee, or an
eligible employee's dependent may file a complaint with the office
alleging that a rate is excessive for the risks to which the rate
applies, if the percentage increase in the premium rate charged to a
small employer under Subchapter E, Chapter 1501, for a new rating
period exceeds 15 percent.
(b) The office shall refer a complaint received under
Subsection (a) to the commissioner if the office determines that
the complaint substantially attests to a rate charged that is
excessive for the risks to which the rate applies.
(c) With respect to a complaint filed under Subsection (a),
the office may issue a subpoena applicable throughout the state
that requires the production of records.
(d) On application of the office in the case of disobedience
of a subpoena, a district court may issue an order requiring any
individual or person, including a small employer health benefit
plan issuer described by Section 1501.002, that is subpoenaed to
obey the subpoena and produce records, if the individual or person
has refused to do so. An application under this subsection must be
made in a district court in Travis County.
SECTION 3.002. Section 1501.205, Insurance Code, is amended
by adding Subsection (d) to read as follows:
(d) On the request of a small employer, a small employer
health benefit plan issuer shall disclose the percentage change in
the risk load assessed to a small employer group to the group, along
with the percentage change attributable exclusively to any change
in case characteristics.
SECTION 3.003. Subchapter E, Chapter 1501, Insurance Code,
is amended by adding Section 1501.2131 and amending Section
1501.214 to read as follows:
Sec. 1501.2131. COMPLAINT FACILITATION FOR PREMIUM RATE
ADJUSTMENTS. If the percentage increase in the premium rate
charged to a small employer for a new rating period exceeds 15
percent, the small employer, an eligible employee, or an eligible
employee's dependent may file a complaint with the office of public
insurance counsel as provided by Section 501.160.
Sec. 1501.214. ENFORCEMENT. (a) Subject to Subsection
(b), if [If] the commissioner determines that a small employer
health benefit plan issuer subject to this chapter exceeds the
applicable premium rate established under this subchapter, the
commissioner may order restitution and assess penalties as provided
by Chapter 82.
(b) The commissioner shall enter an order under this section
if the commissioner makes the finding described by Section
1501.653.
SECTION 3.004. Chapter 1501, Insurance Code, is amended by
adding Subchapter N to read as follows:
SUBCHAPTER N. RESOLUTION OF CERTAIN COMPLAINTS AGAINST SMALL
EMPLOYER HEALTH BENEFIT PLAN ISSUERS
Sec. 1501.651. DEFINITIONS. In this subchapter:
(1) "Honesty-in-premium account" means the account
established under Section 1501.656.
(2) "Office" means the office of public insurance
counsel.
Sec. 1501.652. COMPLAINT RESOLUTION PROCEDURE. (a) On the
receipt of a referral of a complaint from the office of public
insurance counsel under Section 501.160, the commissioner shall
request written memoranda from the office and the small employer
health benefit plan issuer that is the subject of the complaint.
(b) After receiving the initial memoranda described by
Subsection (a), the commissioner may request one rebuttal
memorandum from the office.
(c) The commissioner may by rule limit the number of
exhibits submitted with or the time frame allowed for the submittal
of the memoranda described by Subsection (a) or (b).
Sec. 1501.653. ORDER; FINDINGS. The commissioner shall
issue an order under Section 1501.214(b) if the commissioner
determines that the rate complained of is excessive for the risks to
which the rate applies.
Sec. 1501.654. COSTS. The office may request, and the
commissioner may award to the office, reasonable costs and fees
associated with the investigation and resolution of a complaint
filed under Section 501.160 and disposed of in accordance with this
subchapter.
Sec. 1501.655. ASSESSMENT. (a) The commissioner may make
an assessment against each small employer health benefit plan
issuer in an amount that is sufficient to cover the costs of
investigating and resolving a complaint filed under Section 501.160
and disposed of in accordance with this subchapter.
(b) The commissioner shall deposit assessments collected
under this section to the credit of the honesty-in-premium account.
Sec. 1501.656. HONESTY-IN-PREMIUM ACCOUNT. (a) The
honesty-in-premium account is an account in the general revenue
fund that may be appropriated only to cover the cost associated with
the investigation and resolution of a complaint filed under Section
501.160 and disposed of in accordance with this subchapter.
(b) Interest earned on the honesty-in-premium account shall
be credited to the account. The account is exempt from the
application of Section 403.095, Government Code.
Sec. 1501.657. RATE CHANGE NOT PROHIBITED. Nothing in this
subchapter prohibits a small employer health benefit plan issuer
from, at any time, offering a different rate to the group whose rate
is the subject of a complaint.
SECTION 3.005. The change in law made by Chapter 1501,
Insurance Code, as amended by this article, applies only to a small
employer health benefit plan that is delivered, issued for
delivery, or renewed on or after January 1, 2010. A small employer
health benefit plan that is delivered, issued for delivery, or
renewed before January 1, 2010, is covered by the law in effect at
the time the health benefit plan was delivered, issued for
delivery, or renewed, and that law is continued in effect for that
purpose.
ARTICLE 4. PHYSICIAN RANKING BY HEALTH BENEFIT PLAN ISSUERS
SECTION 4.001. Subtitle F, Title 8, Insurance Code, is
amended by adding Chapter 1460 to read as follows:
CHAPTER 1460. STANDARDS REQUIRED REGARDING CERTAIN PHYSICIAN
RANKINGS BY HEALTH BENEFIT PLANS
Sec. 1460.001. DEFINITIONS. In this chapter:
(1) "Health benefit plan issuer" means an entity
authorized under this code or another insurance law of this state
that provides health insurance or health benefits in this state,
including:
(A) an insurance company;
(B) a group hospital service corporation
operating under Chapter 842;
(C) a health maintenance organization operating
under Chapter 843; and
(D) a stipulated premium company operating under
Chapter 884.
(2) "Physician" means an individual licensed to
practice medicine in this state or another state of the United
States.
Sec. 1460.002. EXEMPTION. This chapter does not apply to:
(1) a Medicaid managed care program operated under
Chapter 533, Government Code;
(2) a Medicaid program operated under Chapter 32,
Human Resources Code;
(3) the child health plan program under Chapter 62,
Health and Safety Code, or the health benefits plan for children
under Chapter 63, Health and Safety Code; or
(4) a Medicare supplement benefit plan, as defined by
Chapter 1652.
Sec. 1460.003. PHYSICIAN RANKING REQUIREMENTS. (a) A
health benefit plan issuer, including a subsidiary or affiliate,
may not rank physicians, classify physicians into tiers based on
performance, or publish physician-specific information that
includes rankings, tiers, ratings, or other comparisons of a
physician's performance against standards, measures, or other
physicians, unless:
(1) the standards used by the health benefit plan
issuer conform to nationally recognized standards and guidelines as
required by rules adopted under Section 1460.005;
(2) the standards and measurements to be used by the
health benefit plan issuer are disclosed to each affected physician
before any evaluation period used by the health benefit plan
issuer; and
(3) each affected physician is afforded, before any
publication or other public dissemination, an opportunity to
dispute the ranking or classification through a process that
includes due process protections that conform to protections
described by 42 U.S.C. Section 11112.
(b) This section does not apply to the publication of a list
of network physicians and providers if ratings or comparisons are
not made.
Sec. 1460.004. DUTIES OF PHYSICIANS. A physician may not
require or request that a patient of the physician enter into an
agreement under which the patient agrees not to:
(1) rank or otherwise evaluate the physician;
(2) participate in surveys regarding the physician; or
(3) in any way comment on the patient's opinion of the
physician.
Sec. 1460.005. RULES; STANDARDS. (a) The commissioner
shall adopt rules in the manner prescribed by Subchapter A, Chapter
36, as necessary to implement this chapter.
(b) The commissioner shall adopt rules as necessary to
ensure that a health benefit plan issuer that uses a physician
ranking system complies with the standards and guidelines described
by Subsection (c).
(c) In adopting rules under this section, the commissioner
shall consider the standards and guidelines prescribed by
nationally recognized organizations that establish or promote
guidelines and performance measures emphasizing quality of health
care, including the National Quality Forum and the AQA Alliance. If
neither the National Quality Forum nor the AQA Alliance has
established standards or guidelines regarding an issue, the
commissioner shall consider the standards and guidelines
prescribed by the National Committee for Quality Assurance and
other similar national organizations.
Sec. 1460.006. DUTIES OF HEALTH BENEFIT PLAN ISSUER. A
health benefit plan issuer shall ensure that:
(1) physicians being measured are actively involved in
the development of the standards used under this chapter; and
(2) the measures and methodology used in the
comparison programs described by Section 1460.003 are transparent
and valid.
Sec. 1460.007. SANCTIONS; DISCIPLINARY ACTIONS. (a) A
health benefit plan issuer that violates this chapter or a rule
adopted under this chapter is subject to sanctions and disciplinary
actions under Chapters 82 and 84.
(b) A violation of this chapter by a physician constitutes
grounds for disciplinary action by the Texas Medical Board,
including imposition of an administrative penalty.
SECTION 4.002. (a) A health benefit plan issuer shall
comply with Chapter 1460, Insurance Code, as added by this article,
not later than December 31, 2009.
(b) A health benefit plan issuer is not subject to sanctions
or disciplinary actions under Section 1460.007, Insurance Code, as
added by this article, before January 1, 2010.
ARTICLE 5. EFFECTIVE DATE
SECTION 5.001. Except as otherwise provided by this Act,
this Act takes effect immediately if it receives a vote of
two-thirds of all the members elected to each house, as provided by
Section 39, Article III, Texas Constitution. If this Act does not
receive the vote necessary for immediate effect, this Act takes
effect September 1, 2009.
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