By: Taylor of Galveston (Senate Sponsor - Duncan) H.B. No. 1772
(In the Senate - Received from the House May 6, 2011;
May 9, 2011, read first time and referred to Committee on State
Affairs; May 13, 2011, reported favorably by the following vote:
Yeas 9, Nays 0; May 13, 2011, sent to printer.)
A BILL TO BE ENTITLED
AN ACT
relating to the regulation of certain benefit plans.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 1273.001(4), Insurance Code, is amended
to read as follows:
(4) "Point-of-service plan" means an arrangement
under which:
(A) an enrollee chooses to obtain benefits or
services through:
(i) a health maintenance organization
delivery network, including a limited provider network; or
(ii) a non-network delivery system outside
the health maintenance organization delivery network, including an
exclusive provider benefit plan under Chapter 1301 or a limited
provider network, that is administered under an indemnity benefit
arrangement for the cost of health care services; or
(B) indemnity benefits for the cost of health
care services are provided by an insurer or group hospital service
corporation in conjunction with network benefits arranged or
provided by a health maintenance organization.
SECTION 2. Section 1301.001, Insurance Code, is amended by
amending Subdivision (1) and adding Subdivision (1-a) to read as
follows:
(1) "Exclusive provider benefit plan" means a benefit
plan in which an insurer excludes benefits to an insured for some or
all services, other than emergency care services required under
Section 1301.155, provided by a physician or health care provider
who is not a preferred provider.
(1-a) "Health care provider" means a practitioner,
institutional provider, or other person or organization that
furnishes health care services and that is licensed or otherwise
authorized to practice in this state. The term does not include a
physician.
SECTION 3. Section 1301.003, Insurance Code, is amended to
read as follows:
Sec. 1301.003. PREFERRED PROVIDER BENEFIT PLANS AND
EXCLUSIVE PROVIDER BENEFIT PLANS PERMITTED. A preferred provider
benefit plan or an exclusive provider benefit plan [health
insurance policy that provides different benefits from the basic
level of coverage for the use of preferred providers and] that meets
the requirements of this chapter is not:
(1) unjust under Chapter 1701;
(2) unfair discrimination under Subchapter A or B,
Chapter 544; or
(3) a violation of Subchapter B or C, Chapter 1451.
SECTION 4. Section 1301.0041, Insurance Code, is amended to
read as follows:
Sec. 1301.0041. APPLICABILITY. (a) Except as otherwise
specifically provided by this chapter, this [This] chapter applies
to each [any] preferred provider benefit plan in which an insurer
provides, through the insurer's health insurance policy, for the
payment of a level of coverage that is different depending on
whether an [from the basic level of coverage provided by the health
insurance policy if the] insured uses a preferred provider or a
nonpreferred provider.
(b) Unless otherwise specified, an exclusive provider
benefit plan is subject to this chapter in the same manner as a
preferred provider benefit plan.
(c) This chapter does not apply to:
(1) the child health plan program under Chapter 62,
Health and Safety Code; or
(2) a Medicaid managed care program under Chapter 533,
Government Code.
SECTION 5. Subchapter A, Chapter 1301, Insurance Code, is
amended by adding Section 1301.0042 to read follows:
Sec. 1301.0042. APPLICABILITY OF INSURANCE LAW. (a)
Except as provided by Subsection (b), a provision of this code or
another insurance law of this state that applies to a preferred
provider benefit plan applies to an exclusive provider benefit plan
except to the extent that the commissioner determines the provision
to be inconsistent with the function and purpose of an exclusive
provider benefit plan.
(b) An exclusive provider benefit plan may not provide
dental care benefits.
SECTION 6. Section 1301.0045, Insurance Code, is amended to
read as follows:
Sec. 1301.0045. CONSTRUCTION OF CHAPTER. (a) Except as
provided by Section 1301.0046, this chapter may not be construed to
limit the level of reimbursement or the level of coverage,
including deductibles, copayments, coinsurance, or other
cost-sharing provisions, that are applicable to preferred
providers or, for plans other than exclusive provider benefit
plans, nonpreferred providers.
(b) Except as provided by Sections 1301.0052 and 1301.155,
this chapter may not be construed to require an exclusive provider
benefit plan to compensate a nonpreferred provider for services
provided to an insured.
SECTION 7. Section 1301.0046, Insurance Code, is amended to
read as follows:
Sec. 1301.0046. COINSURANCE REQUIREMENTS FOR SERVICES OF
NONPREFERRED PROVIDERS. The insured's coinsurance applicable to
payment to nonpreferred providers may not exceed 50 percent of the
total covered amount applicable to the medical or health care
services. This section does not apply to an exclusive provider
benefit plan.
SECTION 8. Sections 1301.005(a) and (b), Insurance Code,
are amended to read as follows:
(a) An insurer offering a preferred provider benefit plan
shall ensure that both preferred provider benefits and basic level
benefits are reasonably available to all insureds within a
designated service area. This subsection does not apply to an
exclusive provider benefit plan.
(b) If services are not available through a preferred
provider within a designated [the] service area under a preferred
provider benefit plan or an exclusive provider benefit plan, an
insurer shall reimburse a physician or health care provider who is
not a preferred provider at the same percentage level of
reimbursement as a preferred provider would have been reimbursed
had the insured been treated by a preferred provider.
SECTION 9. Subchapter A, Chapter 1301, Insurance Code, is
amended by adding Sections 1301.0051, 1301.0052, 1301.0053, and
1301.0056 to read as follows:
Sec. 1301.0051. EXCLUSIVE PROVIDER BENEFIT PLANS: QUALITY
IMPROVEMENT AND UTILIZATION MANAGEMENT. (a) An insurer that offers
an exclusive provider benefit plan shall establish procedures to
ensure that health care services are provided to insureds under
reasonable standards of quality of care that are consistent with
prevailing professionally recognized standards of care or
practice. The procedures must include:
(1) mechanisms to ensure availability, accessibility,
quality, and continuity of care;
(2) subject to Section 1301.059, a continuing quality
improvement program to monitor and evaluate services provided under
the plan, including primary and specialist physician services and
ancillary and preventive health care services, provided in
institutional or noninstitutional settings;
(3) a method of recording formal proceedings of
quality improvement program activities and maintaining quality
improvement program documentation in a confidential manner;
(4) subject to Section 1301.059, a physician review
panel to assist the insurer in reviewing medical guidelines or
criteria;
(5) a patient record system that facilitates
documentation and retrieval of clinical information for the
insurer's evaluation of continuity and coordination of services and
assessment of the quality of services provided to insureds under
the plan;
(6) a mechanism for making available to the
commissioner the clinical records of insureds for examination and
review by the commissioner on request of the commissioner; and
(7) a specific procedure for the periodic reporting of
quality improvement program activities to:
(A) the governing body and appropriate staff of
the insurer; and
(B) physicians and health care providers that
provide health care services under the plan.
(b) Minutes of a formal proceeding of the quality
improvement program established under Subsection (a) shall be made
available to the commissioner on request of the commissioner.
(c) Insured records made available to the commissioner
under Subsection (a)(6) are confidential and privileged, and are
not subject to Chapter 552, Government Code, or to subpoena, except
to the extent necessary for the commissioner to enforce this
chapter.
Sec. 1301.0052. EXCLUSIVE PROVIDER BENEFIT PLANS:
REFERRALS FOR MEDICALLY NECESSARY SERVICES. (a) If a covered
service is medically necessary and is not available through a
preferred provider, the issuer of an exclusive provider benefit
plan, on the request of a preferred provider, shall:
(1) approve the referral of an insured to a
nonpreferred provider within a reasonable period; and
(2) fully reimburse the nonpreferred provider at the
usual and customary rate or at a rate agreed to by the issuer and the
nonpreferred provider.
(b) An exclusive provider benefit plan must provide for a
review by a health care provider with expertise in the same
specialty as or a specialty similar to the type of health care
provider to whom a referral is requested under Subsection (a)
before the issuer of the plan may deny the referral.
Sec. 1301.0053. EXCLUSIVE PROVIDER BENEFIT PLANS:
EMERGENCY CARE. If a nonpreferred provider provides emergency care
as defined by Section 1301.155 to an enrollee in an exclusive
provider benefit plan, the issuer of the plan shall reimburse the
nonpreferred provider at the usual and customary rate or at a rate
agreed to by the issuer and the nonpreferred provider for the
provision of the services.
Sec. 1301.0056. EXAMINATIONS AND FEES. (a) The
commissioner may examine an insurer to determine the quality and
adequacy of a network used by an exclusive provider benefit plan
offered by the insurer under this chapter. An insurer is subject to
a qualifying examination of the insurer's exclusive provider
benefit plans and subsequent quality of care examinations by the
commissioner at least once every five years. Documentation
provided to the commissioner during an examination conducted under
this section is confidential and is not subject to disclosure as
public information under Chapter 552, Government Code.
(b) An insurer examined under this section shall pay the
cost of the examination in an amount determined by the
commissioner.
(c) The department shall collect an assessment in an amount
determined by the commissioner from the insurer at the time of the
examination to cover all expenses attributable directly to the
examination, including the salaries and expenses of department
employees and all reasonable expenses of the department necessary
for the administration of this chapter.
(d) The department shall deposit an assessment collected
under this section to the credit of the Texas Department of
Insurance operating account. Money deposited under this subsection
shall be used to pay the salaries and expenses of examiners and all
other expenses relating to the examination of insurers under this
section.
SECTION 10. Subchapter D, Chapter 1301, Insurance Code, is
amended by adding Section 1301.1581 to read as follows:
Sec. 1301.1581. INFORMATION CONCERNING EXCLUSIVE PROVIDER
BENEFIT PLANS. (a) In this section, "prospective insured" has the
meaning assigned by Section 1301.158.
(b) In addition to the information required to be provided
under Section 1301.158, an insurer that offers an exclusive
provider benefit plan shall provide to a current or prospective
group contract holder or current or prospective insured notice that
the benefit plan includes limited coverage for services provided by
a physician or health care provider that is not a preferred
provider.
(c) An identification card or similar document issued by an
insurer to an insured in an exclusive provider benefit plan must
display:
(1) the first date on which the insured became insured
under the plan;
(2) a toll-free number that a physician or health care
provider may use to obtain the date on which the insured became
insured under the plan; and
(3) the acronym "EPO" or the phrase "Exclusive
Provider Organization" on the card in a location of the insurer's
choice.
SECTION 11. The change in law made by this Act applies only
to an exclusive provider benefit plan that is delivered, issued for
delivery, or renewed on or after January 1, 2012. An exclusive
provider benefit plan that is delivered, issued for delivery, or
renewed before January 1, 2012, is governed by the law as it existed
immediately before the effective date of this Act, and that law is
continued in effect for that purpose.
SECTION 12. This Act takes effect September 1, 2011.
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