By: Deuell, Davis S.B. No. 485
(In the Senate - Filed January 15, 2009; February 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 5, Nays 1; April 29, 2009,
sent to printer.)
COMMITTEE SUBSTITUTE FOR S.B. No. 485 By: Deuell
A BILL TO BE ENTITLED
AN ACT
relating to medical loss ratios of preferred provider benefit plan
issuers.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. 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. (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 Act.
The first reporting period under Subsection (b), Section 1301.010,
Insurance Code, as added by this Act, may not cover any period that
begins before January 1, 2010.
(b) Subsection (e), Section 1301.010, Insurance Code, as
added by this Act, 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.
SECTION 3. This Act takes effect September 1, 2009.
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