Texas 2009 - 81st Regular

Texas Senate Bill SB485 Compare Versions

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1	1	By: Deuell, Davis, Lucio S.B. No. 485
2	2
3	3
4	4	A BILL TO BE ENTITLED
5	5	AN ACT
6	6	relating to medical loss ratios of preferred provider benefit plan
7	7	issuers.
8	8	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
9	9	SECTION 1. Subtitle A, Title 8, Insurance Code, is amended
10	10	by adding Chapter 1223 to read as follows:
11	11	CHAPTER 1223. MEDICAL LOSS RATIO
12	12	Sec. 1223.001. DEFINITIONS. In this chapter:
13	13	(1) "Enrollee" has the meaning assigned by Section
14	14	1457.001.
15	15	(2) "Evidence of coverage" has the meaning assigned by
16	16	Section 843.002.
17	17	(3) "Market segment" means, as applicable, one of the
18	18	following categories of health benefit plans issued by a health
19	19	benefit plan issuer:
20	20	(A) individual evidences of coverage issued by a
21	21	health maintenance organization;
22	22	(B) individual preferred provider benefit plans;
23	23	(C) evidences of coverage issued by a health
24	24	maintenance organization to small employers as defined by Section
25	25	1501.002;
26	26	(D) preferred provider benefit plans issued to
27	27	small employers as defined by Section 1501.002;
28	28	(E) evidences of coverage issued by a health
29	29	maintenance organization to large employers as defined by Section
30	30	1501.002; and
31	31	(F) preferred provider benefit plans issued to
32	32	large employers as defined by Section 1501.002.
33	33	(4) "Medical loss ratio" means direct losses incurred
34	34	and direct losses paid for all preferred provider benefit plans
35	35	issued by an insurer, divided by direct premiums earned for all
36	36	preferred provider benefit plans issued by that insurer. This
37	37	amount may not include home office and overhead costs, advertising
38	38	costs, network development costs, commissions and other
39	39	acquisition costs, taxes, capital costs, administrative costs,
40	40	utilization review costs, or claims processing costs.
41	41	Sec. 1223.002. APPLICABILITY OF CHAPTER. (a) This chapter
42	42	applies to a health benefit plan issuer that provides benefits for
43	43	medical or surgical expenses incurred as a result of a health
44	44	condition, accident, or sickness, including an individual, group,
45	45	blanket, or franchise insurance policy or insurance agreement, a
46	46	group hospital service contract, or an individual or group evidence
47	47	of coverage or similar coverage document that is offered by:
48	48	(1) an insurance company;
49	49	(2) a group hospital service corporation operating
50	50	under Chapter 842;
51	51	(3) a fraternal benefit society operating under
52	52	Chapter 885;
53	53	(4) a stipulated premium company operating under
54	54	Chapter 884;
55	55	(5) an exchange operating under Chapter 942;
56	56	(6) a health maintenance organization operating under
57	57	Chapter 843; or
58	58	(7) an approved nonprofit health corporation that
59	59	holds a certificate of authority under Chapter 844.
60	60	(b) Notwithstanding any other law, this chapter applies to a
61	61	health benefit plan issuer with respect to a standard health
62	62	benefit plan provided under Chapter 1507.
63	63	(c) Notwithstanding Section 1501.251 or any other law, this
64	64	chapter applies to a health benefit plan issuer with respect to
65	65	coverage under a small employer health benefit plan subject to
66	66	Chapter 1501.
67	67	Sec. 1223.003. EXCEPTIONS. This chapter does not apply
68	68	with respect to:
69	69	(1) a plan that provides coverage:
70	70	(A) for wages or payments in lieu of wages for a
71	71	period during which an employee is absent from work because of
72	72	sickness or injury;
73	73	(B) as a supplement to a liability insurance
74	74	policy;
75	75	(C) for credit insurance;
76	76	(D) only for dental or vision care;
77	77	(E) only for hospital expenses; or
78	78	(F) only for indemnity for hospital confinement;
79	79	(2) a Medicare supplemental policy as defined by
80	80	Section 1882(g)(1), Social Security Act (42 U.S.C. Section 1395ss);
81	81	(3) a Medicaid managed care program operated under
82	82	Chapter 533, Government Code;
83	83	(4) Medicaid programs operated under Chapter 32, Human
84	84	Resources Code;
85	85	(5) the state child health plan operated under Chapter
86	86	62 or 63, Health and Safety Code;
87	87	(6) a workers' compensation insurance policy; or
88	88	(7) medical payment insurance coverage provided under
89	89	a motor vehicle insurance policy.
90	90	Sec. 1223.004. NOTIFICATION OF MEDICAL LOSS RATIO, MEDICAL
91	91	COST MANAGEMENT, AND HEALTH EDUCATION COST. (a) A health benefit
92	92	plan issuer shall report its medical loss ratio for each market
93	93	segment, as applicable, with the annual report required under
94	94	Section 843.155 or 1301.009. Beginning in the fourth year during
95	95	which a health benefit plan issuer is required to make a report
96	96	under this section, the issuer may report the medical loss ratio as
97	97	a three-year rolling average.
98	98	(b) Each health benefit plan issuer shall include in the
99	99	report described by Subsection (a), for each market segment, a
100	100	separate report of costs attributed to medical cost management and
101	101	health education. The commissioner by rule shall prescribe the
102	102	reporting requirements for the costs, which may include:
103	103	(1) case management activities;
104	104	(2) utilization review;
105	105	(3) detection and prevention of payment of fraudulent
106	106	requests for reimbursement;
107	107	(4) network access fees to preferred provider
108	108	organizations and other network-based health benefit plans,
109	109	including prescription drug networks, and allocated internal
110	110	salaries and related costs associated with network development or
111	111	provider contracting;
112	112	(5) consumer education solely relating to health
113	113	improvement and relying on the direct involvement of health
114	114	personnel, including smoking cessation and disease management
115	115	programs and other programs that involve medical education;
116	116	(6) telephone hotlines, including nurse hotlines,
117	117	that provide enrollees health information and advice regarding
118	118	medical care; and
119	119	(7) expenses for internal and external appeals
120	120	processes.
121	121	(c) The department shall post on the department's Internet
122	122	website or another website maintained by the department for the
123	123	benefit of consumers or enrollees:
124	124	(1) the information received under Subsections (a) and
125	125	(b);
126	126	(2) an explanation of the meaning of the term "medical
127	127	loss ratio," how the medical loss ratio is calculated, and how the
128	128	ratio may affect consumers or enrollees; and
129	129	(3) an explanation of the types of activities and
130	130	services classified as medical cost management and health
131	131	education, how the costs for these activities and services are
132	132	calculated, what those costs, when aggregated with a medical loss
133	133	ratio, mean, and how the costs might affect consumers or enrollees.
134	134	(d) A health benefit plan issuer shall provide each enrollee
135	135	or the plan sponsor, as applicable, with the Internet website
136	136	address at which the enrollee or plan sponsor may access the
137	137	information described by Subsection (c). A health benefit plan
138	138	issuer must provide the information required under this subsection:
139	139	(1) to an enrollee, at the time of the initial
140	140	enrollment of the enrollee in a health benefit plan issued by the
141	141	health benefit plan issuer; and
142	142	(2) at the time of renewal of a health benefit plan to:
143	143	(A) each enrollee, if the health benefit plan is
144	144	an individual health benefit plan; or
145	145	(B) the plan sponsor, if the health benefit plan
146	146	is a group health benefit plan.
147	147	(e) The commissioner shall adopt rules necessary to
148	148	implement this section.
149	149	SECTION 2. The change in law made by this Act applies only
150	150	to a health benefit plan that is delivered, issued for delivery, or
151	151	renewed on or after January 1, 2011. A health benefit plan that is
152	152	delivered, issued for delivery, or renewed before January 1, 2011,
153	153	is covered by the law in effect at the time the health benefit plan
154	154	was delivered, issued for delivery, or renewed, and that law is
155	155	continued in effect for that purpose.
156	156	SECTION 3. This Act takes effect September 1, 2009.