By: Bonnen of Galveston, Guillen H.B. No. 2327
(Senate Sponsor - Buckingham, Schwertner)
(In the Senate - Received from the House April 24, 2019;
April 25, 2019, read first time and referred to Committee on
Business & Commerce; May 20, 2019, reported adversely, with
favorable Committee Substitute by the following vote: Yeas 9,
Nays 0; May 20, 2019, sent to printer.)
Click here to see the committee vote
COMMITTEE SUBSTITUTE FOR H.B. No. 2327 By: Nichols
A BILL TO BE ENTITLED
AN ACT
relating to preauthorization of certain medical care and health
care services by certain health benefit plan issuers and to the
regulation of utilization review, independent review, and peer
review for health benefit plan and workers' compensation coverage.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
ARTICLE 1. PREAUTHORIZATION
SECTION 1.01. Section 843.348(b), Insurance Code, is
amended to read as follows:
(b) A health maintenance organization that uses a
preauthorization process for health care services shall provide
each participating physician or provider, not later than the fifth
[10th] business day after the date a request is made, a list of
health care services that [do not] require preauthorization and
information concerning the preauthorization process.
SECTION 1.02. Subchapter J, Chapter 843, Insurance Code, is
amended by adding Sections 843.3481, 843.3482, and 843.3483 to read
as follows:
Sec. 843.3481. POSTING OF PREAUTHORIZATION REQUIREMENTS.
(a) A health maintenance organization that uses a
preauthorization process for health care services shall make the
requirements and information about the preauthorization process
readily accessible to enrollees, physicians, providers, and the
general public by posting the requirements and information on the
health maintenance organization's Internet website.
(b) The preauthorization requirements and information
described by Subsection (a) must:
(1) be posted:
(A) except as provided by Subsection (c) or (d),
conspicuously in a location on the Internet website that does not
require the use of a log-in or other input of personal information
to view the information; and
(B) in a format that is easily searchable and
accessible;
(2) except for the screening criteria under Paragraph
(4)(C), be written in plain language that is easily understandable
by enrollees, physicians, providers, and the general public;
(3) include a detailed description of the
preauthorization process and procedure; and
(4) include an accurate and current list of the health
care services for which the health maintenance organization
requires preauthorization that includes the following information
specific to each service:
(A) the effective date of the preauthorization
requirement;
(B) a list or description of any supporting
documentation that the health maintenance organization requires
from the physician or provider ordering or requesting the service
to approve a request for that service;
(C) the applicable screening criteria, which may
include Current Procedural Terminology codes and International
Classification of Diseases codes; and
(D) statistics regarding preauthorization
approval and denial rates for the service in the preceding year,
including statistics in the following categories:
(i) physician or provider type and
specialty, if any;
(ii) indication offered;
(iii) reasons for request denial;
(iv) denials overturned on appeal; and
(v) total annual preauthorization
requests, approvals, and denials for the service.
(c) This section may not be construed to require a health
maintenance organization to provide specific information that
would violate any applicable copyright law or licensing agreement.
A health maintenance organization is required to supply, in lieu of
any information withheld on the basis of copyright law or a
licensing agreement, a summary of the withheld information
sufficient to allow a licensed physician or provider, as applicable
for the specific service, who has sufficient training and
experience related to the service to understand the basis for the
health maintenance organization's medical necessity or
appropriateness determinations.
(d) If a requirement or information described by Subsection
(a) is licensed, proprietary, or copyrighted material that the
health maintenance organization has received from a third party
with which the health maintenance organization has contracted, the
health maintenance organization may, instead of making that
information publicly available on the health maintenance
organization's Internet website, provide the material to a
physician or provider who submits a preauthorization request using
a nonpublic secured Internet website link or other protected,
nonpublic electronic means.
Sec. 843.3482. CHANGES TO PREAUTHORIZATION REQUIREMENTS.
(a) Except as provided by Subsection (b), not later than the 60th
day before the date a new or amended preauthorization requirement
takes effect, a health maintenance organization that uses a
preauthorization process for health care services shall provide
notice of the new or amended preauthorization requirement in the
health maintenance organization's newsletter or network bulletin,
if any, and on the health maintenance organization's Internet
website.
(b) For a change in a preauthorization requirement or
process that removes a service from the list of health care services
requiring preauthorization or amends a preauthorization
requirement in a way that is less burdensome to enrollees or
participating physicians or providers, a health maintenance
organization shall provide notice of the change in the
preauthorization requirement in the health maintenance
organization's newsletter or network bulletin, if any, and on the
health maintenance organization's Internet website not later than
the fifth day before the date the change takes effect.
(c) Not later than the fifth day before the date a new or
amended preauthorization requirement takes effect, a health
maintenance organization shall update its Internet website to
disclose the change to the health maintenance organization's
preauthorization requirements or process and the date and time the
change is effective.
Sec. 843.3483. REMEDY FOR NONCOMPLIANCE. In addition to
any other penalty or remedy provided by law, a health maintenance
organization that uses a preauthorization process for health care
services that violates this subchapter with respect to a required
publication, notice, or response regarding its preauthorization
requirements, including by failing to comply with any applicable
deadline for the publication, notice, or response, must provide an
expedited appeal under Section 4201.357 for any health care service
affected by the violation.
SECTION 1.03. Section 1301.135(a), Insurance Code, is
amended to read as follows:
(a) An insurer that uses a preauthorization process for
medical care or [and] health care services shall provide to each
preferred provider, not later than the fifth [10th] business day
after the date a request is made, a list of medical care and health
care services that require preauthorization and information
concerning the preauthorization process.
SECTION 1.04. Subchapter C-1, Chapter 1301, Insurance Code,
is amended by adding Sections 1301.1351, 1301.1352, and 1301.1353
to read as follows:
Sec. 1301.1351. POSTING OF PREAUTHORIZATION REQUIREMENTS.
(a) An insurer that uses a preauthorization process for medical
care or health care services shall make the requirements and
information about the preauthorization process readily accessible
to insureds, physicians, health care providers, and the general
public by posting the requirements and information on the insurer's
Internet website.
(b) The preauthorization requirements and information
described by Subsection (a) must:
(1) be posted:
(A) except as provided by Subsection (c) or (d),
conspicuously in a location on the Internet website that does not
require the use of a log-in or other input of personal information
to view the information; and
(B) in a format that is easily searchable and
accessible;
(2) except for the screening criteria under Paragraph
(4)(C), be written in plain language that is easily understandable
by insureds, physicians, health care providers, and the general
public;
(3) include a detailed description of the
preauthorization process and procedure; and
(4) include an accurate and current list of medical
care and health care services for which the insurer requires
preauthorization that includes the following information specific
to each service:
(A) the effective date of the preauthorization
requirement;
(B) a list or description of any supporting
documentation that the insurer requires from the physician or
health care provider ordering or requesting the service to approve
a request for the service;
(C) the applicable screening criteria, which may
include Current Procedural Terminology codes and International
Classification of Diseases codes; and
(D) statistics regarding the insurer's
preauthorization approval and denial rates for the medical care or
health care service in the preceding year, including statistics in
the following categories:
(i) physician or health care provider type
and specialty, if any;
(ii) indication offered;
(iii) reasons for request denial;
(iv) denials overturned on appeal; and
(v) total annual preauthorization
requests, approvals, and denials for the service.
(c) This section may not be construed to require an insurer
to provide specific information that would violate any applicable
copyright law or licensing agreement. An insurer is required to
supply, in lieu of any information withheld on the basis of
copyright law or a licensing agreement, a summary of the withheld
information sufficient to allow a licensed physician or other
health care provider, as applicable for the specific service, who
has sufficient training and experience related to the service to
understand the basis for the insurer's medical necessity or
appropriateness determinations.
(d) If a requirement or information described by Subsection
(a) is licensed, proprietary, or copyrighted material that the
insurer has received from a third party with which the insurer has
contracted, the insurer may, instead of making that information
publicly available on the insurer's Internet website, provide the
material to a physician or health care provider who submits a
preauthorization request using a nonpublic secured Internet
website link or other protected, nonpublic electronic means.
(e) The provisions of this section may not be waived,
voided, or nullified by contract.
Sec. 1301.1352. CHANGES TO PREAUTHORIZATION REQUIREMENTS.
(a) Except as provided by Subsection (b), not later than the 60th
day before the date a new or amended preauthorization requirement
takes effect, an insurer that uses a preauthorization process for
medical care or health care services shall provide notice of the new
or amended preauthorization requirement in the insurer's
newsletter or network bulletin, if any, and on the insurer's
Internet website.
(b) For a change in a preauthorization requirement or
process that removes a service from the list of medical care or
health care services requiring preauthorization or amends a
preauthorization requirement in a way that is less burdensome to
insureds, physicians, or health care providers, an insurer shall
provide notice of the change in the preauthorization requirement in
the insurer's newsletter or network bulletin, if any, and on the
insurer's Internet website not later than the fifth day before the
date the change takes effect.
(c) Not later than the fifth day before the date a new or
amended preauthorization requirement takes effect, an insurer
shall update its Internet website to disclose the change to the
insurer's preauthorization requirements or process and the date and
time the change is effective.
(d) The provisions of this section may not be waived,
voided, or nullified by contract.
Sec. 1301.1353. REMEDY FOR NONCOMPLIANCE. (a) In addition
to any other penalty or remedy provided by law, an insurer that uses
a preauthorization process for medical care or health care services
that violates this subchapter with respect to a required
publication, notice, or response regarding its preauthorization
requirements, including by failing to comply with any applicable
deadline for the publication, notice, or response, must provide an
expedited appeal under Section 4201.357 for any medical care or
health care service affected by the violation.
(b) The provisions of this section may not be waived,
voided, or nullified by contract.
ARTICLE 2. UTILIZATION, INDEPENDENT, AND PEER REVIEW
SECTION 2.01. Section 4201.002(12), Insurance Code, is
amended to read as follows:
(12) "Provider of record" means the physician or other
health care provider with primary responsibility for the health
care[, treatment, and] services provided to or requested on behalf
of an enrollee or the physician or other health care provider that
has provided or has been requested to provide the health care
services to the enrollee. The term includes a health care facility
where the health care services are [if treatment is] provided on an
inpatient or outpatient basis.
SECTION 2.02. Sections 4201.151 and 4201.152, Insurance
Code, are amended to read as follows:
Sec. 4201.151. UTILIZATION REVIEW PLAN. A utilization
review agent's utilization review plan, including reconsideration
and appeal requirements, must be reviewed by a physician licensed
to practice medicine in this state and conducted in accordance with
standards developed with input from appropriate health care
providers and approved by a physician licensed to practice medicine
in this state.
Sec. 4201.152. UTILIZATION REVIEW UNDER [DIRECTION OF]
PHYSICIAN. A utilization review agent shall conduct utilization
review under the direction of a physician licensed to practice
medicine in this [by a] state [licensing agency in the United
States].
SECTION 2.03. Section 4201.153(d), Insurance Code, is
amended to read as follows:
(d) Screening criteria must be used to determine only
whether to approve the requested treatment. Before issuing an
adverse determination, a utilization review agent must obtain a
determination of medical necessity and appropriateness by
referring a proposed [A] denial of requested treatment [must be
referred] to:
(1) an appropriate physician, dentist, or other health
care provider; or
(2) if the treatment is requested, ordered, provided,
or to be provided by a physician, a physician licensed to practice
medicine who is of the same or a similar specialty as that physician
[to determine medical necessity].
SECTION 2.04. Sections 4201.155, 4201.206, and 4201.251,
Insurance Code, are amended to read as follows:
Sec. 4201.155. LIMITATION ON NOTICE REQUIREMENTS AND REVIEW
PROCEDURES. (a) A utilization review agent may not establish or
impose a notice requirement or other review procedure that is
contrary to the requirements of the health insurance policy or
health benefit plan.
(b) This section may not be construed to release a health
insurance policy or health benefit plan from full compliance with
this chapter or other applicable law.
Sec. 4201.206. OPPORTUNITY TO DISCUSS TREATMENT BEFORE
ADVERSE DETERMINATION. (a) Subject to Subsection (b) and the
notice requirements of Subchapter G, before an adverse
determination is issued by a utilization review agent who questions
the medical necessity, the [or] appropriateness, or the
experimental or investigational nature[,] of a health care service,
the agent shall provide the health care provider who ordered,
requested, provided, or is to provide the service a reasonable
opportunity to discuss with a physician licensed to practice
medicine the patient's treatment plan and the clinical basis for
the agent's determination.
(b) If the health care service described by Subsection (a)
was ordered, requested, or provided, or is to be provided by a
physician, the opportunity described by that subsection must be
with a physician licensed to practice medicine who is of the same or
a similar specialty as that physician.
Sec. 4201.251. DELEGATION OF UTILIZATION REVIEW. A
utilization review agent may delegate utilization review to
qualified personnel in the hospital or other health care facility
in which the health care services to be reviewed were or are to be
provided. The delegation does not release the agent from the full
responsibility for compliance with this chapter or other applicable
law, including the conduct of those to whom utilization review has
been delegated.
SECTION 2.05. Sections 4201.252(a) and (b), Insurance Code,
are amended to read as follows:
(a) Personnel employed by or under contract with a
utilization review agent to perform utilization review must be
appropriately trained and qualified and meet the requirements of
this chapter and other applicable law, including applicable
licensing requirements.
(b) Personnel, other than a physician licensed to practice
medicine, who obtain oral or written information directly from a
patient's physician or other health care provider regarding the
patient's specific medical condition, diagnosis, or treatment
options or protocols must be a nurse, physician assistant, or other
health care provider qualified and licensed or otherwise authorized
by law and an appropriate licensing agency in the United States to
provide the requested service.
SECTION 2.06. Section 4201.356, Insurance Code, is amended
to read as follows:
Sec. 4201.356. DECISION BY PHYSICIAN REQUIRED; SPECIALTY
REVIEW. (a) The procedures for appealing an adverse determination
must provide that a physician licensed to practice medicine makes
the decision on the appeal, except as provided by Subsection (b).
(b) If not later than the 10th working day after the date an
appeal is requested or denied the enrollee's health care provider
requests [states in writing good cause for having] a particular
type of specialty provider review the case, a health care provider
who is of the same or a similar specialty as the health care
provider who would typically manage the medical or dental
condition, procedure, or treatment under consideration for review
and who is licensed or otherwise authorized by the appropriate
licensing agency in the United States to manage the medical or
dental condition, procedure, or treatment shall review the denial
or the decision denying the appeal. The specialty review must be
completed within 15 working days of the date the health care
provider's request for specialty review is received.
SECTION 2.07. Sections 4201.357(a), (a-1), and (a-2),
Insurance Code, are amended to read as follows:
(a) The procedures for appealing an adverse determination
must include, in addition to the written appeal, a procedure for an
expedited appeal of a denial of emergency care, [or] a denial of
continued hospitalization, or a denial of another service if the
requesting health care provider includes a written statement with
supporting documentation that the service is necessary to treat a
life-threatening condition or prevent serious harm to the patient.
That procedure must include a review by a health care provider who:
(1) has not previously reviewed the case; [and]
(2) is of the same or a similar specialty as the health
care provider who would typically manage the medical or dental
condition, procedure, or treatment under review in the appeal; and
(3) for a review of a health care service:
(A) ordered, requested, or to be provided by a
health care provider who is not a physician, is licensed or
otherwise authorized by an appropriate licensing agency in the
United States; or
(B) ordered, requested, or to be provided by a
physician, is licensed to practice medicine in the United States.
(a-1) The procedures for appealing an adverse determination
must include, in addition to the written appeal and the appeal
described by Subsection (a), a procedure for an expedited appeal of
a denial of prescription drugs or intravenous infusions for which
the patient is receiving benefits under the health insurance
policy. That procedure must include a review by a health care
provider who:
(1) has not previously reviewed the case; [and]
(2) is of the same or a similar specialty as the health
care provider who would typically manage the medical or dental
condition, procedure, or treatment under review in the appeal; and
(3) for a review of a health care service:
(A) ordered, requested, or to be provided by a
health care provider who is not a physician, is licensed or
otherwise authorized by the appropriate licensing agency in this
state to provide the service in this state; or
(B) ordered, requested, or to be provided by a
physician, is licensed to practice medicine in this state.
(a-2) An adverse determination under Section 1369.0546 is
entitled to an expedited appeal. The physician or, if appropriate,
other health care provider deciding the appeal must consider
atypical diagnoses and the needs of atypical patient populations.
The physician must be licensed to practice medicine in the United
States and the health care provider must be licensed or otherwise
authorized by an appropriate licensing agency in the United States.
SECTION 2.08. Section 4201.359, Insurance Code, is amended
by adding Subsection (c) to read as follows:
(c) A physician described by Subsection (b)(2) must comply
with this chapter and other applicable laws and be licensed to
practice medicine. A health care provider described by Subsection
(b)(2) must comply with this chapter and other applicable laws and
be licensed or otherwise authorized by an appropriate licensing
agency in the United States.
SECTION 2.09. Sections 4201.453 and 4201.454, Insurance
Code, are amended to read as follows:
Sec. 4201.453. UTILIZATION REVIEW PLAN. A specialty
utilization review agent's utilization review plan, including
reconsideration and appeal requirements, must be:
(1) reviewed by a health care provider of the
appropriate specialty who is licensed or otherwise authorized to
provide the specialty health care service in this state; and
(2) conducted in accordance with standards developed
with input from a health care provider of the appropriate specialty
who is licensed or otherwise authorized to provide the specialty
health care service in this state.
Sec. 4201.454. UTILIZATION REVIEW UNDER DIRECTION OF
PROVIDER OF SAME SPECIALTY. A specialty utilization review agent
shall conduct utilization review under the direction of a health
care provider who is of the same specialty as the agent and who is
licensed or otherwise authorized to provide the specialty health
care service in this [by a] state [licensing agency in the United
States].
SECTION 2.10. Sections 4201.455(a) and (b), Insurance Code,
are amended to read as follows:
(a) Personnel who are employed by or under contract with a
specialty utilization review agent to perform utilization review
must be appropriately trained and qualified and meet the
requirements of this chapter and other applicable law of this
state, including applicable licensing laws.
(b) Personnel who obtain oral or written information
directly from a physician or other health care provider must be a
nurse, physician assistant, or other health care provider of the
same specialty as the agent and who are licensed or otherwise
authorized to provide the specialty health care service by a
[state] licensing agency in the United States.
SECTION 2.11. Sections 4201.456 and 4201.457, Insurance
Code, are amended to read as follows:
Sec. 4201.456. OPPORTUNITY TO DISCUSS TREATMENT BEFORE
ADVERSE DETERMINATION. Subject to the notice requirements of
Subchapter G, before an adverse determination is issued by a
specialty utilization review agent who questions the medical
necessity, the [or] appropriateness, or the experimental or
investigational nature[,] of a health care service, the agent shall
provide the health care provider who ordered, requested, or is to
provide the service a reasonable opportunity to discuss the
patient's treatment plan and the clinical basis for the agent's
determination with a health care provider who is:
(1) of the same specialty as the agent; and
(2) licensed or otherwise authorized to provide the
specialty health care service by a licensing agency in the United
States.
Sec. 4201.457. APPEAL DECISIONS. A specialty utilization
review agent shall comply with the requirement that a physician or
other health care provider who makes the decision in an appeal of an
adverse determination must be:
(1) of the same or a similar specialty as the health
care provider who would typically manage the specialty condition,
procedure, or treatment under review in the appeal; and
(2) licensed or otherwise authorized to provide the
health care service by a licensing agency in the United States.
SECTION 2.12. Section 408.0043, Labor Code, is amended by
adding Subsection (c) to read as follows:
(c) Notwithstanding Subsection (b), if a health care
service is requested, ordered, provided, or to be provided by a
physician, a person described by Subsection (a)(1), (2), or (3) who
reviews the service with respect to a specific workers'
compensation case must be of the same or a similar specialty as that
physician.
SECTION 2.13. Section 1305.351(d), Insurance Code, is
amended to read as follows:
(d) A [Notwithstanding Section 4201.152, a] utilization
review agent or an insurance carrier that uses doctors to perform
reviews of health care services provided under this chapter,
including utilization review, or peer reviews under Section
408.0231(g), Labor Code, may only use doctors licensed to practice
in this state.
SECTION 2.14. Section 1305.355(d), Insurance Code, is
amended to read as follows:
(d) The department shall assign the review request to an
independent review organization. An [Notwithstanding Section
4202.002, an] independent review organization that uses doctors to
perform reviews of health care services under this chapter may only
use doctors licensed to practice in this state.
SECTION 2.15. Section 408.023(h), Labor Code, is amended to
read as follows:
(h) A [Notwithstanding Section 4201.152, Insurance Code, a]
utilization review agent or an insurance carrier that uses doctors
to perform reviews of health care services provided under this
subtitle, including utilization review, may only use doctors
licensed to practice in this state.
SECTION 2.16. Section 413.031(e-2), Labor Code, is amended
to read as follows:
(e-2) An [Notwithstanding Section 4202.002, Insurance Code,
an] independent review organization that uses doctors to perform
reviews of health care services provided under this title may only
use doctors licensed to practice in this state.
ARTICLE 3. JOINT INTERIM STUDY
SECTION 3.01. CREATION OF JOINT INTERIM COMMITTEE. (a) A
joint interim committee is created to study, review, and report on
the use of prior authorization and utilization review processes by
private health benefit plan issuers in this state, as provided by
Section 3.02 of this article, and propose reforms under that
section related to the transparency of and improving patient
outcomes under the prior authorization and utilization review
processes used by private health benefit plan issuers in this
state.
(b) The joint interim committee shall be composed of four
senators appointed by the lieutenant governor and four members of
the house of representatives appointed by the speaker of the house
of representatives.
(c) The lieutenant governor and speaker of the house of
representatives shall each designate a co-chair from among the
joint interim committee members.
(d) The joint interim committee shall convene at the joint
call of the co-chairs.
(e) The joint interim committee has all other powers and
duties provided to a special or select committee by the rules of the
senate and house of representatives, by Subchapter B, Chapter 301,
Government Code, and by policies of the senate and house committees
on administration.
SECTION 3.02. INTERIM STUDY REGARDING PRIOR AUTHORIZATION
AND UTILIZATION REVIEW PROCESSES. (a) The joint interim committee
created by Section 3.01 of this article shall study data and other
information available from the Texas Department of Insurance, the
office of public insurance counsel, or other sources the committee
determines relevant to examine and analyze the transparency of and
improving patient outcomes under the prior authorization and
utilization review processes used by private health benefit plan
issuers in this state.
(b) The joint interim committee shall propose reforms based
on the study required under Subsection (a) of this section to
improve the transparency of and patient outcomes under prior
authorization and utilization review processes in this state.
(c) The joint interim committee shall prepare a report of
the findings and proposed reforms.
SECTION 3.03. COMMITTEE FINDINGS AND PROPOSED REFORMS.
(a) Not later than December 1, 2020, the joint interim committee
created under Section 3.01 of this article shall submit to the
lieutenant governor, the speaker of the house of representatives,
and the governor the report prepared under Section 3.02 of this
article. The joint interim committee shall include in its report
recommendations of specific statutory and regulatory changes that
appear necessary from the committee's study under Section 3.02 of
this article.
(b) Not later than the 60th day after the effective date of
this Act, the lieutenant governor and speaker of the house of
representatives shall appoint the members of the joint interim
committee in accordance with Section 3.01 of this article.
SECTION 3.04. ABOLITION OF COMMITTEE. The joint interim
committee created under Section 3.01 of this article is abolished
and this article expires December 15, 2020.
ARTICLE 4. TRANSITIONS; EFFECTIVE DATE
SECTION 4.01. The changes in law made by Article 1 of this
Act apply only to a request for preauthorization of medical care or
health care services made on or after January 1, 2020, under a
health benefit plan delivered, issued for delivery, or renewed on
or after that date. A request for preauthorization of medical care
or health care services made before January 1, 2020, or on or after
January 1, 2020, under a health benefit plan delivered, issued for
delivery, or renewed before that date 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 4.02. The changes in law made by Article 2 of this
Act apply only to utilization, independent, or peer review
requested on or after the effective date of this Act. Utilization,
independent, or peer review requested before the effective date of
this Act 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 4.03. This Act takes effect September 1, 2019.
* * * * *