83R21122 PMO-D
By: Smithee H.B. No. 3270
Substitute the following for H.B. No. 3270:
By: Smithee C.S.H.B. No. 3270
A BILL TO BE ENTITLED
AN ACT
relating to preferred provider and exclusive provider network
regulations; providing administrative sanctions and penalties.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Chapter 1301, Insurance Code, is amended by
adding Subchapters F, G, and H to read as follows:
SUBCHAPTER F. NETWORK ADEQUACY STANDARDS
Sec. 1301.251. NETWORK ADEQUACY REQUIREMENTS. A preferred
provider benefit plan must include a health care service delivery
network that complies with this chapter and local market access
adequacy requirements as established by the commissioner by rule,
including requirements within the insurer's designated service
area relating to:
(1) the sufficiency of:
(A) the number, size, and geographic
distribution of networks in relation to:
(i) the number of insureds;
(ii) the insureds' relevant characteristics
and medical and health care needs; and
(iii) the current and projected utilization
of covered health care services;
(B) the number and classes of preferred providers
to ensure choice, access, and quality of care; and
(C) the number of preferred provider physicians
with admitting privileges at one or more preferred provider
hospitals located within the insurer's designated service area; and
(2) the availability and accessibility of:
(A) preferred providers at all times;
(B) necessary general, specialty, and
psychiatric hospital services;
(C) physical and occupational therapy services
and chiropractic services;
(D) emergency care at all times;
(E) urgent care for medical and behavioral health
conditions; and
(F) routine care and preventive care on a timely
basis as determined by the commissioner by rule.
Sec. 1301.252. SERVICE AREAS. A preferred provider benefit
plan may have one or more contiguous or noncontiguous service areas
provided that a service area that is not statewide must comply with
geographic parameters established by the commissioner by rule.
Sec. 1301.253. MONITORING AND CORRECTIVE ACTION. An
insurer shall monitor on an ongoing basis, and take corrective
action to maintain compliance with, the network requirements
described by Sections 1301.251 and 1301.252.
Sec. 1301.254. REQUEST FOR WAIVER OF NETWORK ADEQUACY
STANDARDS. (a) On an insurer's showing of good cause as described
by this section, the commissioner may waive one or more adequacy
standards for the insurer's network imposed under this subchapter
or adopted by the commissioner by rule.
(b) The commissioner may find good cause to grant the waiver
if the insurer demonstrates as described by this section that
physicians or health care providers necessary for an adequate local
market access network are not available for contract or have
refused to contract with the insurer on reasonable terms or any
terms.
(c) If physicians or health care providers necessary for an
adequate local market access network are available within the
relevant service area for a covered service for which the insurer
requests a waiver, the insurer's request for waiver must include:
(1) a list of the physicians or providers within the
relevant service area that the insurer attempted to contract with,
identified by name and specialty or facility type;
(2) a description of the manner in which the insurer
last contacted each physician or provider and the date of the
contact;
(3) a description of each reason each physician or
provider gave for refusing to contract with the insurer;
(4) an estimate of total claims cost savings in a year
the insurer anticipates will result from using a local market
access plan instead of contracting with physicians or providers
located within the service area, and the impact of the savings on
premiums;
(5) a description of the steps the insurer will take to
improve the network to avoid future requests to renew the waiver;
and
(6) any other information required by the commissioner
by rule or requested by the commissioner.
(d) The insurer's request for a waiver must state whether
any physician or health care provider is available within the
service area for the covered service or services for which the
insurer requests the waiver.
(e) Not later than the 30th day after the date an insurer
files a request for a waiver, a physician or health care provider
may file a response to the request in the manner prescribed by the
commissioner by rule.
Sec. 1301.255. GRANTING REQUEST FOR WAIVER OF NETWORK
ADEQUACY STANDARDS. If the commissioner grants a waiver requested
under Section 1301.254, the department shall post on the
department's Internet website information relevant to the grant of
a waiver, including:
(1) the name of the preferred provider benefit plan
for which the request is granted;
(2) the insurer offering the plan; and
(3) the affected service area.
Sec. 1301.256. RENEWAL OF WAIVER. (a) An insurer may apply
annually for renewal of a waiver that has been granted under Section
1301.254.
(b) Application for renewal of a waiver must be filed in a
manner prescribed by the commissioner by rule not less than the 30th
day before the anniversary of the date the commissioner granted the
waiver.
Sec. 1301.257. EXPIRATION OF WAIVER. A waiver of network
adequacy standards expires on the anniversary of the date the
commissioner granted the waiver if:
(1) an insurer fails to timely request a renewal under
Section 1301.256; or
(2) the department denies the insurer's request for
renewal.
Sec. 1301.258. LOCAL MARKET ACCESS PLAN REQUIRED. (a) Not
later than the 30th day after the date an insurer's network fails to
comply with the network adequacy requirements under this subchapter
for a specific service area, the insurer must:
(1) establish a local market access plan as described
by Section 1301.259; and
(2) request a waiver of network adequacy standards
under Section 1301.254 seeking approval of the local market access
plan.
(b) An insurer must file a local market access plan with the
request for a waiver under Section 1301.254.
(c) The local market access plan must be provided to the
department on request.
Sec. 1301.259. LOCAL MARKET ACCESS PLAN CONTENTS. A local
market access plan required under Section 1301.258 must specify for
each service area that does not meet the network adequacy
requirements:
(1) the geographic area within the service area in
which a sufficient number of preferred providers, identified by
class of provider, are not available as required by network
adequacy standards;
(2) a map, with key and scale, that identifies the
geographic areas within the service area in which the health care
services, physicians, or health care providers are not available;
(3) the reasons that the preferred provider network
does not meet the network adequacy standards;
(4) procedures that the insurer will implement to
assist insureds in obtaining medically necessary services if a
preferred provider is not reasonably available, including
procedures to coordinate care to avoid balance billing; and
(5) the manner in which nonpreferred provider benefit
claims will be handled when a preferred or otherwise contracted
provider is not available, including procedures for compliance with
requirements for claims payments.
Sec. 1301.260. LOCAL MARKET ACCESS PLAN PROCEDURES. (a) An
insurer must establish and implement procedures for use in each
service area for which a local market access plan is submitted,
including procedures to:
(1) identify requests for preauthorization of
services for insureds that are likely to require the provision of
services by physicians or health care providers that do not have a
contract with the insurer;
(2) furnish to insureds, before a health care service
is provided, an estimate of the amount the insurer will pay the
physician or health care provider;
(3) except in the case of an exclusive provider
benefit plan, notify insureds that they may be liable for any
amounts charged by the physician or provider that are not paid in
full by the insurer;
(4) identify claims filed by nonpreferred providers in
instances in which a preferred provider was not reasonably
available to the insured; and
(5) make initial and, if required, subsequent payment
of the claims in the manner required by this subchapter.
(b) A local market access plan may include a process for
negotiating with a nonpreferred provider before the provider
provides a health care service.
Sec. 1301.261. LOCAL MARKET ACCESS PLAN ANNUAL FILINGS. An
insurer must submit a local market access plan established under
Section 1301.258 as a part of the annual report on network adequacy
required under Section 1301.263.
Sec. 1301.262. PAYMENT OF CERTAIN BASIC BENEFIT CLAIMS;
DISCLOSURES. (a) Except as provided by Subsection (f), an insurer
shall pay claims in compliance with this section if a preferred
provider is not reasonably available to an insured and services are
provided by a nonpreferred provider, including if:
(1) emergency care is required;
(2) a preferred provider is not reasonably available
within the relevant service area; or
(3) a nonpreferred provider's service is preapproved
or preauthorized based on the unavailability of a preferred
provider in the relevant service area.
(b) If services are provided to an insured by a nonpreferred
provider because a preferred provider is not reasonably available
to the insured, the insurer shall:
(1) pay not less than the usual or customary charge for
the service, less any patient coinsurance, copayment, or deductible
responsibility under the preferred provider benefit plan;
(2) pay the claim at the preferred benefit coinsurance
level; and
(3) in addition to any amounts that would have been
credited had the provider been a preferred provider, credit any
out-of-pocket amounts shown by the insured to have been actually
paid to the nonpreferred provider for covered services in excess of
the allowed amount toward the insured's deductible and annual
out-of-pocket maximum applicable to preferred provider services.
(c) An insurer must calculate the reimbursement of a
nonpreferred provider for a covered service using an appropriate
methodology that:
(1) if based on usual, reasonable, or customary
charges, is based on generally accepted industry standards and
practices for determining the customary billed charge for a service
and that fairly and accurately reflect market rates, including
geographic differences in costs;
(2) if based on claims data, is based on sufficient
data to constitute a representative and statistically valid sample;
(3) is updated at least annually;
(4) does not use data that is more than three years
old; and
(5) is consistent with nationally recognized and
generally accepted bundling edits and logic.
(d) An insurer shall pay all covered basic benefits for
services obtained from physicians or health care providers at a
level not less than the preferred provider benefit plan's basic
benefit level of coverage, regardless of whether the service is
provided within the designated service area for the plan. The
insurer may not deny a claim because the services were provided by
physicians or health care providers outside the designated service
area for the plan.
(e) If a service is provided to an insured by a nonpreferred
facility-based physician and the difference between the allowed
amount and the billed charge is at least $1,000, the insurer must
include a notice on the explanation of benefits that the insured may
have the right to request mediation of the claim of an uncontracted
facility-based provider under Chapter 1467 and may obtain
information at the department's Internet website.
(f) This section does not apply to an exclusive provider
benefit plan.
Sec. 1301.263. NETWORK ADEQUACY ANNUAL REPORT. (a) Before
marketing a preferred provider benefit plan in a new service area
and not less frequently than annually on a date prescribed by the
commissioner by rule, an insurer shall file a network adequacy
report as described by Subsection (b) with the department.
(b) The network adequacy report must specify:
(1) the trade name of each preferred provider benefit
plan in which insureds participate;
(2) the applicable service area of each plan;
(3) whether the preferred provider service delivery
network supporting each plan is adequate under applicable network
adequacy standards; and
(4) as required by the commissioner by rule, the
number of:
(A) claims for nonpreferred provider benefits,
excluding claims paid at the preferred benefit coinsurance level;
(B) claims for nonpreferred provider benefits
that were paid at the preferred benefit coinsurance level;
(C) complaints by nonpreferred providers;
(D) complaints by insureds relating to the amount
of the insurer's payment for basic benefits or balance billing;
(E) complaints by insureds relating to the
availability of preferred providers; and
(F) complaints by insureds relating to the
accuracy of preferred provider listings.
(c) The annual report required under this section must be
submitted as required by the commissioner by rule.
Sec. 1301.264. ENFORCEMENT; SANCTIONS. (a) The
commissioner may impose sanctions under Chapter 82 or issue a cease
and desist order under Chapter 83 if the commissioner determines,
after notice and opportunity for hearing, that the insurer's
network and any local market access plan supporting the network are
inadequate to ensure the availability and accessibility of:
(1) preferred provider benefits;
(2) all medical and health care services and items
covered under a preferred provider benefit plan; or
(3) adequate personnel, specialty care, and
facilities.
(b) In exercising the authority under Subsection (a), the
commissioner may order an insurer to:
(1) reduce a service area of a preferred provider
benefit plan;
(2) stop marketing a preferred provider benefit plan
in all or part of the state; or
(3) withdraw from the preferred provider benefit plan
market.
(c) This section does not limit the authority of the
commissioner to order any other appropriate corrective action,
sanction, or penalty.
SUBCHAPTER G. DISCLOSURES TO INSUREDS
Sec. 1301.301. MANDATORY DISCLOSURES. (a) An application
for a health insurance policy that provides preferred provider
benefits and an endorsement, amendment, or rider to the policy must
be written in a readable and understandable format adopted by the
commissioner by rule.
(b) An insurer shall, on request, provide to a current or
prospective insured an accurate written description of the policy
terms that allows the insured to make comparisons and informed
decisions about selecting a health care plan. The written
description must be in a readable and understandable format adopted
by the commissioner by rule and must include a clear, complete, and
accurate description that:
(1) discloses the name of the entity providing the
coverage;
(2) discloses that the entity providing the coverage
is an insurance company;
(3) provides a toll-free telephone number, unless the
company is exempted by statute or rule from having a toll-free
telephone number, and a mailing address to enable a current or
prospective insured to obtain additional information;
(4) explains the coverage is for, as applicable:
(A) preferred provider benefits; or
(B) exclusive provider benefits that only
provide benefits from preferred providers, except as otherwise
provided in the policy;
(5) explains the distinction between preferred and
nonpreferred providers;
(6) identifies all covered services and benefits,
including benefits that provide payment for:
(A) the services of a preferred provider and a
nonpreferred provider;
(B) prescription drug coverage for generic and
name brand drugs;
(C) emergency care services and benefits and
information on access to after-hours care; and
(D) out-of-area services and benefits;
(7) explains the insured's financial responsibility
for payment for any premiums and for deductibles, copayments,
coinsurance, or other out-of-pocket expenses for noncovered or
nonpreferred services;
(8) discloses any limitations and exclusions,
including the existence of any drug formulary limitations and any
limitations regarding preexisting conditions;
(9) discloses any prior authorization requirements,
including preauthorization review, concurrent review, post-service
review, and postpayment review, and any penalties or reductions in
benefits resulting from the failure to obtain required
authorizations;
(10) explains provisions for continuity of treatment
in the event of termination of a preferred provider's participation
in the plan;
(11) provides a summary of complaint resolution
procedures, if any;
(12) discloses that the insurer is prohibited from
retaliating against the insured because the insured or another
person has filed a complaint on behalf of the insured, or against a
physician or health care provider who, on behalf of the insured, has
reasonably filed a complaint against the insurer or appealed a
decision of the insurer;
(13) in a format required or permitted by the
commissioner by rule, provides a current list of preferred
providers and complete descriptions of the provider networks,
including names and locations of physicians and health care
providers, and a disclosure of which preferred providers will not
accept new patients;
(14) shows the service area or areas; and
(15) advises that information is updated at least
annually regarding whether any waivers or local access plans
approved by the commissioner apply to the plan.
(c) A copy of the written description of policy terms
required by Subsection (b) must be filed with the department:
(1) on the date of the initial filing of the preferred
provider benefit plan; and
(2) not later than the 60th day after the date of a
material change to a policy term.
Sec. 1301.302. PROMOTIONAL MATERIAL. (a) A preferred
provider benefit plan and all promotional, solicitation, and
advertising material related to the plan must clearly describe the
distinction between preferred and nonpreferred providers. An
illustration of preferred provider benefits must be in proximity to
an equally prominent description of basic benefits.
(b) An insurer that maintains an Internet website providing
information about the insurer or the health insurance policies
offered by the insurer for use by current or prospective insureds is
required to provide:
(1) an Internet-based provider listing;
(2) an Internet-based listing of the state regions,
counties, or postal code areas within the insurer's service area or
areas;
(3) an Internet-based listing of the information
required by Section 1301.301; and
(4) a statement of whether the network meets or does
not meet the network adequacy requirements under Subchapter F and
as prescribed by the commissioner by rule.
Sec. 1301.303. PREFERRED PROVIDER AND EXCLUSIVE PROVIDER
NOTICES. (a) An insurer shall provide a notice in all health
insurance policies that provide preferred provider benefits and
outlines of coverage in at least 12-point font that must read
substantially similar to the following:
You have the right to an adequate network of preferred
providers (also known as "network providers").
If you believe that the network is inadequate, you may file a
complaint with the Texas Department of Insurance.
If you obtain out-of-network services because a preferred
provider was not reasonably available, you may be entitled to have
the claim paid at the in-network rate and your out-of-pocket
expenses counted toward your in-network deductible and
out-of-pocket maximum.
You have the right to obtain advance estimates of the amounts
that:
(1) a provider may bill for projected services, from
your out-of-network provider; and
(2) the insurer may pay for the projected services,
from your insurer.
You may obtain a current directory of preferred providers at
the following website: (insurer's Internet website address or
marked inapplicable if the insurer does not maintain an Internet
website) or by calling (insurer's telephone number) for assistance
in finding available preferred providers. If the directory is
materially inaccurate, you may be entitled to have an
out-of-network claim paid at the in-network level of benefits.
If you are treated by a provider or hospital that is not a
preferred provider, you may be billed for anything not paid by the
insurer.
If the amount you owe to an out-of-network hospital-based
radiologist, anesthesiologist, pathologist, emergency department
physician, or neonatologist is greater than $1,000 (not including
your copayment, coinsurance, and deductible responsibilities) for
services received in a network hospital, you may be entitled to have
the parties participate in a teleconference and, if the result is
not to your satisfaction, in a mandatory mediation at no cost to
you. You can learn more about mediation at the Texas Department of
Insurance Internet website.
(b) An insurer shall provide a notice in all health
insurance policies that provide exclusive provider benefits and
outlines of the coverage in at least 12-point font that must read
substantially similar to the following:
An exclusive provider benefit plan does not provide benefits
for services you receive from out-of-network providers, with
specific exceptions as described in your policy and below.
You have the right to an adequate network of preferred
providers (also known as "network providers").
If you believe that the network is inadequate, you may file a
complaint with the Texas Department of Insurance.
If your insurer approves a referral for out-of-network
services because a preferred provider is not available, or if you
have received out-of-network emergency care, your insurer must, in
most cases, resolve the nonpreferred provider's bill so that you
only have to pay any applicable coinsurance, copay, and deductible
amounts.
You may obtain a current directory of preferred providers at
the following website: (insurer's Internet website address or
marked inapplicable if the insurer does not maintain an Internet
website) or by calling (insurer's telephone number) for assistance
in finding available preferred providers. If the directory is
materially inaccurate, you may be entitled to have an
out-of-network claim paid at the in-network level of benefits.
Sec. 1301.304. ACCESS TO INFORMATION. Not less than
annually an insurer shall provide notice to all insureds describing
the manner by which an insured may:
(1) on a cost-free basis access a current list of all
preferred providers, including a nonelectronic copy of the list;
and
(2) obtain by telephone at a specified telephone
number during regular business hours assistance to identify
available preferred providers.
Sec. 1301.305. PROVIDER LISTING UPDATES. (a) An insurer
shall update all electronic or nonelectronic listings of preferred
providers made available to insureds not less than quarterly.
(b) If an insurer does not maintain a preferred provider
listing, electronically or otherwise, that an insured may access to
identify current preferred providers, the insurer shall distribute
a current preferred provider listing to all insureds not less than
annually by mail or other method as agreed by the insured.
Sec. 1301.306. HOSPITAL DISCLOSURES. Preferred provider
information and listings must include a method by which an insured
may identify hospitals that have contractually agreed to:
(1) exercise good faith efforts to accommodate a
request from an insured to use a preferred provider; and
(2) provide in a timely manner as prescribed by the
commissioner by rule information sufficient to enable the insured
to determine whether an assigned facility-based physician or
physician group is a preferred provider.
Sec. 1301.307. PROVIDER DISCLOSURES. Information about a
preferred provider must:
(1) disclose whether the provider is accepting new
patients;
(2) provide a method by which an insured may notify the
insurer of inaccurate information in the listing, including
information related to:
(A) the provider's contract status; and
(B) whether the provider is accepting new
patients;
(3) identify preferred provider facility-based
physicians able to provide services at a preferred provider
facility;
(4) specifically identify those facilities at which
the insurer has no contracts with a class of facility-based
providers; and
(5) be dated and provided in not less than 10-point
font.
Sec. 1301.308. LOCAL MARKET ACCESS PLANS. An insurer
shall, if applicable, on issuance of a policy or not less than 30
days before the date a policy is renewed, provide notice that the
preferred provider benefit plan relies on a local market access
plan as specified by the commissioner by rule. The contents of the
notice shall be determined by the commissioner by rule.
Sec. 1301.309. REIMBURSEMENT RATES FOR NONPREFERRED
PROVIDERS. An insurer shall disclose in each insurance policy and
outline of coverage information relating to the reimbursement of
basic benefit services, including how reimbursements of
nonpreferred providers are determined and except in an exclusive
provider benefit plan:
(1) if an insurer reimburses nonpreferred providers
based directly or indirectly on usual, customary, or reasonable
charges, the source of the data, how the data is used in determining
reimbursements, and the existence of any reduction to a
reimbursement to nonpreferred providers; and
(2) if an insurer bases reimbursement of nonpreferred
providers on an amount other than the total billed charges:
(A) whether the reimbursement of claims for
nonpreferred providers is less than the billed charge for the
service;
(B) whether the insured may be liable to the
nonpreferred provider for any amounts not paid by the insurer;
(C) a description of the methodology by which the
reimbursement amount for nonpreferred providers is calculated; and
(D) a method for insureds to obtain a real-time
estimate of the amount of reimbursement that the insurer will pay to
a nonpreferred provider for a particular service.
Sec. 1301.310. FALSE OR MISLEADING INFORMATION PROHIBITED.
An insurer may not cause or permit the use or distribution of
information related to a preferred provider benefit plan that is
untrue or misleading.
Sec. 1301.311. PROVIDER LISTING BINDING IN CERTAIN CASES.
An insurer shall pay a claim for services provided by a nonpreferred
provider at the applicable preferred benefit coinsurance
percentage if the insured demonstrates that:
(1) the insured reasonably relied on a statement that
a physician or provider was a preferred provider as specified in:
(A) a provider listing; or
(B) provider information; and
(2) the statement was obtained from the insurer, the
insurer's Internet website, or the Internet website of a third
party designated by the insurer to provide the listing for use by
the insureds not more than 30 days before the date of service.
SUBCHAPTER H. CONSUMER PROTECTIONS FOR EXCLUSIVE PROVIDER BENEFIT
PLANS
Sec. 1301.351. EXCLUSIVE PROVIDER BENEFIT PLAN
REQUIREMENTS. This subchapter applies only to exclusive provider
benefit plans.
Sec. 1301.352. NETWORK APPROVAL REQUIRED. An insurer may
not offer, deliver, or issue for delivery an exclusive provider
benefit plan in this state unless the commissioner has:
(1) completed a qualifying examination of the plan to
determine compliance with this chapter; and
(2) approved the insurer's exclusive provider network
in the relevant service area.
Sec. 1301.353. NETWORK APPROVAL: APPLICATION. An
applicant for approval of an exclusive provider network must submit
to the department a complete application disclosing the following
information:
(1) a statement that the filing is:
(A) an application for approval; or
(B) a modification to an approved application;
(2) organizational information for the applicant,
including:
(A) the full name of the applicant;
(B) the applicant's license or certificate
number issued by the department;
(C) the applicant's home office address; and
(D) the applicant's telephone number;
(3) the name and telephone number of a contact person
who will facilitate requests relating to the application from the
department;
(4) an attestation signed by the applicant's corporate
president or secretary or the president's or secretary's authorized
representative that:
(A) the person has read the application, is
familiar with its contents, and the information submitted in the
application, including the attachments, is true and complete; and
(B) the network, including any requested or
granted waiver and any access plan if applicable, is adequate for
the services to be provided under the exclusive provider benefit
plan;
(5) a description and a map of the service area, with
key and scale, identifying the area to be served within the
parameters established by the commissioner by rule;
(6) a list of all plan documents and each plan document
pending the department's approval or review, including each
associated form number or filing identification number;
(7) each form of physician and health care provider
contracts to demonstrate inclusion of provisions required by the
commissioner by rule or a sworn statement by the attestator that the
physician and health care provider contracts comply with the
requirements of this chapter;
(8) a description of the quality improvement program
and work plan that must include a process for medical peer review
and that explains arrangements to ensure confidentiality of medical
records shared among preferred providers;
(9) network configuration information, including:
(A) a map for each specialty demonstrating the
location and distribution of the physician and health care provider
network within the proposed service area as prescribed by the
commissioner by rule; and
(B) a list of each of the following:
(i) each physician and individual health
care practitioner who is a preferred provider, including license
type and specialization and an indication of whether the provider
is accepting new patients; and
(ii) each institutional provider that is a
preferred provider;
(10) documentation demonstrating that:
(A) the exclusive provider benefit plan
documents and procedures comply with Section 1301.363;
(B) without regard to whether the physician or
health care provider has a contractual or other arrangement to
provide items or services to insureds, the plan contains the
provisions and procedures that comply with Section 1301.363; and
(C) the insurer maintains a complaint system that
provides reasonable procedures to resolve a written complaint
initiated by a complainant; and
(11) the physical address of the location of all books
and records described by Section 1301.354.
Sec. 1301.354. NETWORK APPROVAL: QUALIFYING EXAMINATIONS.
An applicant shall make available for examination at the physical
address designated by the insurer under Section 1301.353(11) the
policy and certificate of insurance and documents relating to:
(1) quality improvement, including a program
description and work plan required by Section 1301.359;
(2) utilization management, including a program
description, policies and procedures, criteria used to determine
medical necessity, and examples of adverse determination letters,
adverse determination logs, and independent review organization
logs;
(3) network configuration, including information
demonstrating the adequacy of the exclusive provider network
described by Section 1301.353(9) and all executed physician and
provider contracts applicable to the network;
(4) credentialing;
(5) marketing of the exclusive provider benefit plan,
including all written materials to be presented to prospective
insureds that discuss the exclusive provider network available to
insureds under the plan and how preferred and nonpreferred
physicians or health care providers are to be paid under the plan;
and
(6) complaints made, including a complaint log
categorized and completed as prescribed by the commissioner by
rule.
Sec. 1301.355. NETWORK MODIFICATIONS. (a) An insurer must
file with the department an application for approval to implement a
change to an exclusive provider network configuration that affects
the adequacy of the network, expands or reduces an existing service
area, or adds a new service area.
(b) If a document submitted under Section 1301.353(5), (7),
or (9) is replaced or materially changed, an insurer must submit a
replacement or amended document and identify the change before the
change is implemented.
(c) Before the department grants approval of an application
for expansion or reduction of a service area, the insurer must be in
compliance with the requirements of Section 1301.359 through
1301.361 in the existing service areas and in the proposed service
areas.
(d) Except as provided by Subsection (b), an insurer must
file with the department any change to information filed under
Subsection (a) not later than the 30th day after the date the change
is implemented.
Sec. 1301.356. NETWORK APPROVAL: REVISED APPLICATIONS. If
the application for approval under Section 1301.353 or network
modification under Section 1301.355 is revised or supplemented
during the review process, the applicant must submit to the
department a transmittal letter filing the entire revised or
supplemented page and describing the revision or supplement.
Sec. 1301.357. EXAMINATIONS. (a) The commissioner shall
conduct an examination relating to an exclusive provider benefit
plan not less than once every five years.
(b) On-site financial, market conduct, complaint, or
quality of care examinations are conducted under Chapter 401 or 751
and rules adopted by the commissioner.
(c) An insurer shall make the books and records relating to
the insurer's operations available to the department to facilitate
an examination.
(d) On request of the commissioner, an insurer must provide
a copy of any contract, agreement, or other arrangement between the
insurer and a physician or health care provider. Documentation
provided to the commissioner under this subsection is confidential
as described by Section 1301.0056.
(e) The commissioner may examine and use the records of an
insurer, including records of a quality of care program or medical
peer review committee as defined by Section 151.002, Occupations
Code, as necessary to implement this subchapter, including
commencement and prosecution of an enforcement action under
Subtitle B, Title 2, or rules adopted by the commissioner.
Information obtained under this subsection is confidential as
described by Section 1301.0056.
(f) An insurer shall make available for examination at the
physical address designated under Section 1301.353(11)
documentation relating to:
(1) quality improvement, including program
descriptions, work plans, program evaluations, and committee and
subcommittee meeting minutes;
(2) utilization management, including program
descriptions, policies and procedures, criteria used to determine
medical necessity, and examples of adverse determination letters,
adverse determination logs, including all levels of appeal, and
utilization management files;
(3) complaints made, including complaint files, a
complaint log categorized and completed as prescribed by rules
adopted by the commissioner and documentation and details of
actions taken;
(4) the satisfaction of insureds, physicians, and
health care providers, including satisfaction surveys, insured
disenrollment logs, and termination logs;
(5) network configuration, including information
required by Section 1301.353(9);
(6) credentialing, including credentialing files; and
(7) any reports submitted by the insurer to any
federal or state governmental entity.
Sec. 1301.358. QUALITY IMPROVEMENT PROGRAMS REQUIRED. An
insurer shall develop and maintain a quality improvement program
designed to objectively and systematically monitor and evaluate the
quality and appropriateness of health care services provided under
a benefit plan and to pursue opportunities for improvement. The
program must be ongoing and comprehensive, addressing the quality
of clinical care and health care services. The insurer must
dedicate adequate resources, including personnel and information
systems, to the program.
Sec. 1301.359. QUALITY IMPROVEMENT PROGRAMS: CONTENTS OF
PROGRAM. The program established under Section 1301.358 must
include:
(1) a written description of the program's
organizational structure, functional responsibilities, and meeting
frequency;
(2) an annual work plan designed to reflect the type of
services and the population served by the benefit plan in terms of
age groups, disease categories, and special risk status, including:
(A) objective and measurable goals, planned
activities to accomplish the goals, time frames for implementation,
designation of responsible individuals, and evaluation
methodology; and
(B) measures to address each program area,
including:
(i) network adequacy, availability and
accessibility of care, and assessment of open and closed physician
and individual provider panels;
(ii) continuity of medical and health care
and related services;
(iii) the conduct of clinical studies;
(iv) the adoption and updating of clinical
practice guidelines or clinical care standards, including
guidelines and standards for preventive health care services, that
are communicated to and approved by participating physicians and
individual providers;
(v) insured, physician, and individual
health care provider satisfaction;
(vi) the complaint process, including
complaint data, and identification and removal of barriers that may
impede insureds, physicians, and health care providers from
effectively making complaints against the insurer;
(vii) preventive health care, including
health promotion and outreach activities;
(viii) claims payment processes;
(ix) contract monitoring, including
oversight and compliance with filing requirements;
(x) utilization review processes;
(xi) credentialing;
(xii) insured services; and
(xiii) pharmacy services, including drug
utilization;
(3) an annual written report addressing completed
activities, trending of clinical and service goals, analysis of
program performance, and conclusions;
(4) a process for selection and retention of
contracted preferred providers that complies with rules
established by the commissioner; and
(5) a peer review procedure for physicians and
individual providers, as required in Chapters 151 through 164,
Occupations Code, that designates a credentialing committee to
administer the review and make recommendations regarding
credentialing decisions.
Sec. 1301.360. QUALITY IMPROVEMENT PROGRAMS: DUTIES OF
GOVERNING BODIES. (a) The insurer's governing body shall appoint a
quality improvement committee that:
(1) includes practicing physicians and individual
providers; and
(2) may include one or more insureds from the
exclusive provider benefit plan's service area.
(b) An employee of the insurer may not serve as a committee
member.
(c) The governing body is responsible for the program. The
quality improvement program and the annual work plan may not be
implemented without the approval of the governing body.
(d) The governing body must meet not less frequently than
annually to receive and review reports of the committee or its
subcommittees and take action when appropriate.
(e) The governing body must review the annual written report
on the quality improvement program.
Sec. 1301.361. QUALITY IMPROVEMENT PROGRAMS: DUTIES OF
COMMITTEES; SUBCOMMITTEES. (a) The quality improvement committee
established under Section 1301.360 shall evaluate the overall
effectiveness of the quality improvement program.
(b) The committee may delegate duties to subcommittees
subject to the committee's oversight. A subcommittee may include
practicing physicians, individual health care providers, and
insureds from the service area.
(c) The subcommittees shall:
(1) collaborate and coordinate efforts to improve the
quality, availability, and accessibility of health care services;
(2) meet regularly; and
(3) report the findings of each meeting, including any
recommendations, in writing to the quality improvement committee.
(d) The quality improvement committee shall use
multidisciplinary teams as necessary to accomplish quality
improvement program goals.
Sec. 1301.362. QUALITY IMPROVEMENT PROGRAMS:
PRESUMPTIONS. (a) Except as provided by Subsection (b), in a
review of an insurer's quality improvement program, the department
shall presume the program complies with statutory and regulatory
requirements if the insurer received nonconditional accreditation
or certification in connection with quality improvement by:
(1) the National Committee for Quality Assurance;
(2) the Joint Commission;
(3) the Utilization Review Accreditation Commission;
or
(4) the Accreditation Association for Ambulatory
Health Care.
(b) If the department determines that an accreditation or
certification program does not adequately address a material
statutory or regulatory requirement of this state, the department
may not presume compliance.
Sec. 1301.363. OUT-OF-NETWORK CLAIMS: PAYMENT. (a) An
insurer shall fully reimburse a nonpreferred provider at the usual
and customary rate or at a rate agreed to by the nonpreferred
provider for services provided before the date the insured can
reasonably be transferred to a preferred provider if an insured
cannot reasonably reach a preferred provider for:
(1) a medical screening examination or other
evaluation required by state or federal law and necessary to
determine whether a medical emergency condition exists to be
provided in a hospital emergency facility, a freestanding emergency
medical care facility, or a comparable emergency facility; and
(2) necessary emergency care services, including the
treatment and stabilization of an emergency medical condition
provided in a hospital emergency facility, a freestanding emergency
medical care facility, or a comparable emergency facility.
(b) If medically necessary covered services other than
emergency care are not available through a preferred provider, on
the request of a preferred provider, the insurer:
(1) must approve a referral to a nonpreferred provider
in a timely manner appropriate to the delivery of the services and
the condition of the patient, but not later than five business days
after the date the insurer receives documentation relating to the
referral; and
(2) may not deny a referral until 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 has reviewed the referral.
(c) An insurer may facilitate an insured's selection of a
nonpreferred provider if medically necessary covered services,
excluding emergency care, are not available through a preferred
provider and an insured has received a referral from a preferred
provider.
(d) If an insurer facilitates an insured's selection as
described by Subsection (c), the insurer must offer an insured a
list of not less than three nonpreferred providers with expertise
in the necessary specialty who are reasonably available considering
the medical condition and location of the insured.
(e) An insurer reimbursing a nonpreferred provider under
Subsection (a), (b), or (d) must:
(1) ensure that the insured is held harmless for any
amounts in excess of the copayment and deductible amount and
coinsurance percentage that the insured would have paid had the
insured received services from a preferred provider; and
(2) issue payment to the nonpreferred provider at the
usual and customary rate or at a rate agreed to by the nonpreferred
provider.
(f) An insurer must provide with the payment an explanation
of benefits to the insured and request that the insured notify the
insurer if the nonpreferred provider bills the insured for amounts
in excess of the amount paid by the insurer.
(g) An insurer must pay any amounts that the nonpreferred
provider bills the insured in excess of the amount paid by the
insurer in a manner consistent with Subsection (e).
(h) If the insured selects a nonpreferred provider that is
not included in the list provided under Subsection (d) by the
insurer, notwithstanding Section 1301.262(f), the insurer must pay
the claim in accordance with Section 1301.262.
Sec. 1301.364. OUT-OF-NETWORK CLAIMS: MEDIATION. (a) An
insurer may require that an insured request mediation under Chapter
1467 or under provisions adopted by the commissioner by rule. The
insurer must notify the insured when mediation is available and
inform the insured of how to request mediation. The insurer may
not:
(1) except as provided by Subsection (b), penalize the
insured for failing to request mediation; or
(2) require the insured to participate in the
mediation.
(b) Notwithstanding Subsection (a)(1), an insurer that
requests that the insured initiate mediation is not responsible for
any balance bill the insured receives from the nonpreferred
provider until the insured requests mediation.
(c) Eligibility for mediation under this section is based on
the entire unpaid amount of the nonpreferred provider bills, less
any applicable copayment, deductible, and coinsurance.
(d) The insurer's payment must be based on the amount due
resulting from the mediation process.
Sec. 1301.365. OUT-OF-NETWORK CLAIMS: PAYMENT
METHODOLOGIES. Any methodology used by an insurer to calculate
reimbursement of nonpreferred providers for services that are
covered under an exclusive provider benefit plan must be:
(1) based on:
(A) generally accepted industry standards and
practices for determining the usual, reasonable, or customary fee
for a service to ensure market rates, including geographic
differences in costs, are fairly and accurately reflected; or
(B) claims data that is:
(i) sufficient to constitute a
representative and statistically valid sample;
(ii) updated not less than annually; and
(iii) not more than three years old; and
(2) consistent with nationally recognized and
generally accepted bundling edits and logic.
SECTION 2. Section 1301.005(b), Insurance Code, is amended
to read as follows:
(b) Subject to Sections 1301.262, 1301.309, and 1301.363,
if [If] services are not available through a preferred provider
within a designated 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 3. Section 1301.0051(a), Insurance Code, is amended
to read as follows:
(a) An insurer that offers an exclusive provider benefit
plan shall establish procedures in compliance with Section 1301.358
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.
SECTION 4. Sections 1301.0052, Insurance Code, is amended
to read as follows:
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 subject to
Subchapter H:
(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) Subject to Section 1301.363, an [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.
SECTION 5. Section 1301.0053, Insurance Code, is amended to
read as follows:
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, subject to
Section 1301.363(a), 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.
SECTION 6. Section 1301.0055, Insurance Code, is amended to
read as follows:
Sec. 1301.0055. NETWORK ADEQUACY STANDARDS. The
commissioner shall by rule adopt network adequacy standards in
compliance with Subchapters F, G, and H and that:
(1) are adapted to local markets in which an insurer
offering a preferred provider benefit plan operates;
(2) ensure availability of, and accessibility to, a
full range of contracted physicians and health care providers to
provide health care services to insureds; and
(3) on good cause shown, may allow departure from
local market network adequacy standards if the commissioner posts
on the department's Internet website the name of the preferred
provider plan, the insurer offering the plan, and the affected
local market.
SECTION 7. Section 1301.006(a), Insurance Code, is amended
to read as follows:
(a) Subject to Subchapter F, an [An] insurer that markets a
preferred provider benefit plan shall contract with physicians and
health care providers to ensure that all medical and health care
services and items contained in the package of benefits for which
coverage is provided, including treatment of illnesses and
injuries, will be provided under the health insurance policy in a
manner ensuring availability of and accessibility to adequate
personnel, specialty care, and facilities.
SECTION 8. Section 1301.009(a), Insurance Code, is amended
to read as follows:
(a) In addition to the reports required under Section
1301.263, not [Not] later than March 1 of each year, an insurer
shall file with the commissioner a report relating to the preferred
provider benefit plan offered under this chapter and covering the
preceding calendar year.
SECTION 9. Section 1301.056(a), Insurance Code, is amended
to read as follows:
(a) Subject to Subchapters F, G, and H, an [An] insurer or
third-party administrator may not reimburse a physician or other
practitioner, institutional provider, or organization of
physicians and health care providers on a discounted fee basis for
covered services that are provided to an insured unless:
(1) the insurer or third-party administrator has
contracted with either:
(A) the physician or other practitioner,
institutional provider, or organization of physicians and health
care providers; or
(B) a preferred provider organization that has a
network of preferred providers and that has contracted with the
physician or other practitioner, institutional provider, or
organization of physicians and health care providers;
(2) the physician or other practitioner,
institutional provider, or organization of physicians and health
care providers has agreed to the contract and has agreed to provide
health care services under the terms of the contract; and
(3) the insurer or third-party administrator has
agreed to provide coverage for those health care services under the
health insurance policy.
SECTION 10. Section 1301.059(b), Insurance Code, is amended
to read as follows:
(b) Except as provided in Subchapter H, an [An] insurer may
not engage in quality assessment except through a panel of at least
three physicians selected by the insurer from among a list of
physicians contracting with the insurer. The physicians
contracting with the insurer in the applicable service area shall
provide the list of physicians to the insurer.
SECTION 11. This Act applies only to an insurance policy
that is delivered, issued for delivery, or renewed on or after
January 1, 2014. A policy delivered, issued for delivery, or
renewed before January 1, 2014, 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, 2013.