Texas 2009 - 81st Regular

Texas Senate Bill SB2299 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	81R10259 YDB-F
2	2	By: Williams S.B. No. 2299
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to registration and regulation of certain discount health
8	8	care programs.
9	9	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
10	10	SECTION 1. Section 76.001, Health and Safety Code, is
11	11	amended by adding Subdivision (1-a) and amending Subdivision (3) to
12	12	read as follows:
13	13	(1-a) "Controlling person" means an individual who:
14	14	(A) possesses the authority to set policy, direct
15	15	management, and conduct the affairs of a program operator or
16	16	marketer;
17	17	(B) is an officer, director, general partner, or
18	18	a member of a governing board of a business entity that is a program
19	19	operator or marketer;
20	20	(C) is employed, appointed, or authorized by a
21	21	program operator or marketer to enter into a contract with a program
22	22	operator, marketer, provider, or provider network on behalf of the
23	23	program operator or marketer; or
24	24	(D) possesses direct or indirect control of 25
25	25	percent or more of the voting securities of the program operator or
26	26	marketer.
27	27	(3) "Discount health care program" means a business
28	28	arrangement or contract in which an entity, in exchange for fees,
29	29	dues, charges, or other consideration, offers its members access to
30	30	discounts on health care services provided by health care
31	31	providers. The term does not include:
32	32	(A) an insurance policy, certificate of
33	33	coverage, or other product regulated by the Texas Department of
34	34	Insurance;
35	35	(B) [or] a self-funded or self-insured employee
36	36	benefit plan; or
37	37	(C) a benefit program regulated by the federal
38	38	government, including Medicare and Medicaid.
39	39	SECTION 2. Section 76.051, Health and Safety Code, is
40	40	amended to read as follows:
41	41	Sec. 76.051. PROGRAM OPERATOR AND MARKETER COMPLIANCE. (a)
42	42	Except as otherwise provided by this chapter, a program operator,
43	43	including the operator of a freestanding discount health care
44	44	program or a discount health care program marketed by an insurer or
45	45	a health maintenance organization, shall comply with this chapter.
46	46	(b) Except as otherwise provided by this chapter, a
47	47	marketer, including a marketer who has a contract with another
48	48	marketer to sell a discount health care program, shall comply with
49	49	this chapter.
50	50	SECTION 3. The heading to Section 76.056, Health and Safety
51	51	Code, is amended to read as follows:
52	52	Sec. 76.056. PROVIDER CONTRACT REQUIREMENTS.
53	53	SECTION 4. The heading to Section 76.101, Health and Safety
54	54	Code, is amended to read as follows:
55	55	Sec. 76.101. PROGRAM OPERATOR REGISTRATION REQUIRED; FEES.
56	56	SECTION 5. Section 76.101, Health and Safety Code, is
57	57	amended by amending Subsections (a), (b), (e), (f), and (g), and
58	58	adding Subsections (h) and (i) to read as follows:
59	59	(a) A program operator may not offer a discount health care
60	60	program in this state unless the operator is registered with the
61	61	department. A registration is valid for one year.
62	62	(b) An applicant for registration as a program operator
63	63	under this chapter or an applicant for renewal of registration as a
64	64	program operator under this chapter whose information has changed
65	65	must submit:
66	66	(1) a registration form indicating the program
67	67	operator's name and address and its agent for service of process;
68	68	(2) a list of names, addresses, official positions,
69	69	and biographical information of the program operator's controlling
70	70	persons[:
71	71	[(A) the individuals responsible for conducting
72	72	the program operator's affairs, including:
73	73	[(i) each member of the board of directors,
74	74	board of trustees, executive committee, or other governing board or
75	75	committee;
76	76	[(ii) the officers of the program operator;
77	77	and
78	78	[(iii) any contracted management company
79	79	personnel; and
80	80	[(B) any person owning or having the right to
81	81	acquire 10 percent or more of the voting securities of the program
82	82	operator];
83	83	(3) a statement generally describing the applicant,
84	84	its facilities and personnel, and the health care services or
85	85	products for which a discount will be made available under the
86	86	discount health care program;
87	87	(4) a list of the marketers authorized to sell or
88	88	distribute the program operator's program under the program
89	89	operator's name and a list of the marketing entities authorized to
90	90	private label the program operator's program; and
91	91	(5) a copy of the form of all contracts made or to be
92	92	made between the program operator and any providers or provider
93	93	networks regarding the provision of health care services or
94	94	products to members.
95	95	(e) To register or renew a registration, a program operator
96	96	must pay the appropriate fees. The commission shall set by rule the
97	97	amount of the fees required by this section to cover the costs of
98	98	administering this chapter. These fees must include:
99	99	(1) a registration or renewal application fee; and
100	100	(2) a fee based on the number of [A] discount health
101	101	care program memberships sold or issued by the program operator and
102	102	in force in this state during the preceding 12-month period [shall
103	103	pay the department an initial registration fee of $1,000 and an
104	104	annual renewal fee not to exceed $500].
105	105	(f) The department may conduct a criminal background check
106	106	on the [individuals responsible for conducting the] program
107	107	operator's controlling persons [affairs, each member of the board
108	108	of directors, board of trustees, executive committee, or other
109	109	governing board or committee, the officers of the program operator,
110	110	any contracted management company personnel, and any person owning
111	111	or having the right to acquire 10 percent or more of the voting
112	112	securities of the program operator].
113	113	(g) The department may deny or revoke a program operator's
114	114	registration or renewal based on the findings of the criminal
115	115	background check of the program operator's controlling persons,
116	116	including a conviction or deferred adjudication of a controlling
117	117	person. The commission shall establish the criteria and standards
118	118	for denying or revoking a program operator's registration or
119	119	renewal under this subsection.
120	120	(h) The department may deny or revoke a program operator's
121	121	registration or renewal based on the information contained in the
122	122	materials required to be filed with or reported to the department.
123	123	The commission shall establish the criteria and standards for
124	124	denying or revoking a program operator's registration or renewal
125	125	under this subsection.
126	126	(i) A person or entity who is [This section does not apply to
127	127	a program operator] licensed under Title 6, Insurance Code, and who
128	128	operates a discount health care program in this state is not
129	129	required to meet the registration requirements in Subsections (a)
130	130	through (h). The person or entity must notify the department that it
131	131	is operating a discount health care program in this state and
132	132	provide the department with the person's or entity's name, the name
133	133	of a designated contact person, and the license number issued by the
134	134	Texas Department of Insurance.
135	135	SECTION 6. Subchapter C, Chapter 76, Health and Safety
136	136	Code, is amended by adding Section 76.102 to read as follows:
137	137	Sec. 76.102. MARKETER REGISTRATION REQUIRED; FEES. (a) A
138	138	marketer may not sell or distribute a discount health care program
139	139	in this state unless the marketer is registered with the
140	140	department. A registration is valid for one year.
141	141	(b) An applicant for registration as a marketer under this
142	142	chapter or renewal of registration as a marketer under this chapter
143	143	must submit:
144	144	(1) a registration form indicating the marketer's name
145	145	and address and its agent for service of process; and
146	146	(2) a list of names, addresses, official positions,
147	147	and biographical information of the marketer's controlling
148	148	persons, if applicable.
149	149	(c) To register or renew a registration, a marketer must pay
150	150	the appropriate fees. The commission by rule shall set the amount
151	151	of the fees required by this section to cover the costs of
152	152	administering this chapter.
153	153	(d) If the marketer is an individual, the department may
154	154	conduct a criminal background check on the individual. If the
155	155	marketer is a business entity, the department may conduct a
156	156	criminal background check on the marketer's controlling persons.
157	157	(e) The department may deny or revoke a marketer's
158	158	registration or renewal based on the findings of the criminal
159	159	background check of the persons in Subsection (d), including a
160	160	conviction or deferred adjudication of a person in Subsection (d).
161	161	The commission shall establish the criteria and standards for
162	162	denying or revoking a marketer's registration or renewal under this
163	163	subsection.
164	164	(f) The department may deny or revoke a marketer's
165	165	registration or renewal based on the information contained in the
166	166	materials required to be filed with or reported to the department.
167	167	The commission shall establish the criteria and standards for
168	168	denying or revoking a marketer's registration or renewal under this
169	169	subsection.
170	170	SECTION 7. Section 76.151, Health and Safety Code, is
171	171	amended to read as follows:
172	172	Sec. 76.151. DISCIPLINARY ACTION. A program operator or
173	173	marketer is subject to the denial of an application, imposition of
174	174	[On a finding that a ground for disciplinary action exists under
175	175	this chapter, the executive director of the department may impose]
176	176	an administrative [sanction, including any administrative] penalty
177	177	under Subchapter F, [as provided by] Chapter 51, Occupations Code,
178	178	or imposition of an administrative sanction under Section 51.353,
179	179	Occupations Code, if the program operator or marketer violates this
180	180	chapter or a rule or an order of the executive director of the
181	181	commission.
182	182	SECTION 8. Sections 76.152(a), (b), (c), and (d), Health
183	183	and Safety Code, are amended to read as follows:
184	184	(a) The attorney general or executive director of the
185	185	department may institute an action against a program operator or
186	186	marketer for injunctive relief under Section 51.352, Occupations
187	187	Code, to restrain a violation or a threatened violation of this
188	188	chapter or an order issued or rule adopted under this chapter.
189	189	(b) In addition to the injunctive relief provided by
190	190	Subsection (a), the attorney general or executive director of the
191	191	department may institute an action for a civil penalty as provided
192	192	by Section 51.352, Occupations Code.
193	193	(c) The amount of any civil penalty assessed under this
194	194	section may not exceed $5,000 [$2,500] for each violation. Each day
195	195	a violation continues is a separate violation.
196	196	(d) Advertising, selling, or distributing a discount health
197	197	care program that violates this chapter is a false, misleading, or
198	198	deceptive act or practice for purposes of Section 17.46, Business &
199	199	Commerce Code. A public or private right or [The exclusive] remedy
200	200	authorized by Chapter 17, Business & Commerce Code, may be used to
201	201	bring an action for a [the] violation of Section 17.46, Business &
202	202	Commerce Code[, is an action by the office of the attorney general
203	203	as provided by Section 17.46(a), Business & Commerce Code].
204	204	SECTION 9. Section 76.154, Health and Safety Code, is
205	205	amended to read as follows:
206	206	Sec. 76.154. APPEAL. A person affected by a ruling, order,
207	207	decision, or other action of the executive director of the
208	208	department or the commission [department] may appeal by filing a
209	209	petition in a district court in Travis County.
210	210	SECTION 10. Not later than January 1, 2010, the Texas
211	211	Commission of Licensing and Regulation shall adopt the rules and
212	212	procedures necessary to implement the changes in law made by this
213	213	Act.
214	214	SECTION 11. (a) Except as provided by Subsection (b) of
215	215	this section, this Act takes effect September 1, 2009.
216	216	(b) Section 76.101(e), Health and Safety Code, as amended by
217	217	this Act, and Section 76.102, Health and Safety Code, as added by
218	218	this Act, take effect April 30, 2010.