Bill Text: TX HB2645 | 2013-2014 | 83rd Legislature | Enrolled

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Bill Title: Relating to certification and operation of independent review organizations.

Sponsorship: Partisan Bill (Democrat 2)

Status: (Passed) 2013-06-14 - Effective on 9/1/13 [HB2645 Detail]

Download: Texas-2013-HB2645-Enrolled.html

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H.B. No. 2645

AN ACT
relating to certification and operation of independent review
organizations.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 4202.002, Insurance Code, is amended by
amending Subsection (c) and adding Subsections (d), (e), and (f) to
read as follows:
(c) In addition to the standards described by Subsection
(b), the commissioner shall adopt standards and rules that:
(1) prohibit:
(A) more than one independent review
organization from operating out of the same office or other
facility;
(B) an individual or entity from owning more than
one independent review organization;
(C) an individual from owning stock in or serving
on the board of more than one independent review organization;
(D) an individual who has served on the board of
an independent review organization whose certification was revoked
for cause from serving on the board of another independent review
organization before the fifth anniversary of the date on which the
revocation occurred;
(E) an individual who serves as an officer,
director, manager, executive, or supervisor of an independent
review organization from serving as an officer, director, manager,
executive, supervisor, employee, agent, or independent contractor
of another independent review organization [an attorney who is, or
has in the past served as, the registered agent for an independent
review organization from representing the independent review
organization in legal proceedings]; and
(F) an independent review organization from:
(i) publicly disclosing [confidential]
patient information protected by the Health Insurance Portability
and Accountability Act of 1996 (42 U.S.C. Section 1320d et seq.); or
(ii) transmitting the information to a
subcontractor involved in the independent review process that has
not signed an agreement similar to the business associate agreement
required by regulations adopted under the Health Insurance
Portability and Accountability Act of 1996 (42 U.S.C. Section 1320d
et seq.) [, except to a provider who is under contract to perform
the review]; and
(2) require:
(A) an independent review organization to:
(i) maintain a physical address and a
mailing address in this state;
(ii) be incorporated in this state;
(iii) be in good standing with the
comptroller; and
(iv) be based and certified in this state
and to locate the organization's primary offices in this state;
(B) an independent review organization to
[voluntarily] surrender the organization's certification [while
the organization is under investigation or] as part of an agreed
order; and
(C) an independent review organization to:
(i) notify the department of an agreement
to sell the organization or shares in the organization;
(ii) not later than the 60th day before the
date of the sale, submit the name of the purchaser and a complete
and legible set of fingerprints for each officer of the purchaser
and for each owner or shareholder of the purchaser or, if the
purchaser is publicly held, each owner or shareholder described by
Section 4202.004(a)(1), and any additional information necessary
to comply with Section 4202.004(d); and
(iii) complete the transfer of ownership
after the department has sent written confirmation in accordance
with Subsection (d) that the requirements of this chapter have been
satisfied [apply for and receive a new certification after the
organization is sold to a new owner].
(d) The department shall send the written confirmation
required by Subsection (c)(2)(C)(iii) not later than the expiration
of the fourth week after the date the department determines the
requirements are satisfied.
(e) Standards to ensure the confidentiality of medical
records transmitted to an independent review organization under
Subsection (b)(2) must require organizations and utilization
review agents to transmit and store records in compliance with the
Health Insurance Portability and Accountability Act of 1996 (42
U.S.C. Section 1320d et seq.) and the regulations and standards
adopted under that Act.
(f) The commissioner shall adopt standards requiring that:
(1) on application for certification, an officer of
the organization attest that the office is located at a physical
address;
(2) the office be equipped with a computer system
capable of:
(A) processing requests for independent review;
and
(B) accessing all electronic records related to
the review and the independent review process;
(3) all records be maintained electronically and made
available to the department on request; and
(4) in the case of an office located in a residence,
the working office be located in a room set aside for independent
review business purposes and in a manner to ensure confidentiality
in accordance with Subsection (e).
SECTION 2. Section 4202.003, Insurance Code, is amended to
read as follows:
Sec. 4202.003. REQUIREMENTS REGARDING TIMELINESS OF
DETERMINATION. The standards adopted under Section 4202.002 must
require each independent review organization to make the
organization's determination:
(1) for a life-threatening condition as defined by
Section 4201.002, not later than the earlier of[:
[(A)] the third [fifth] day after the date the
organization receives the information necessary to make the
determination[;] or, with respect to:
(A) a review of a health care service provided to
a person eligible for workers' compensation medical benefits,
[(B)] the eighth day after the date the organization receives the
request that the determination be made; or
(B) a review of a health care service other than a
service described by Paragraph (A), the third day after the date the
organization receives the request that the determination be made;
or [and]
(2) for a condition other than a life-threatening
condition, not later than the earlier of:
(A) the 15th day after the date the organization
receives the information necessary to make the determination; or
(B) the 20th day after the date the organization
receives the request that the determination be made.
SECTION 3. Section 4202.004, Insurance Code, is amended to
read as follows:
Sec. 4202.004. CERTIFICATION. (a) To be certified as an
independent review organization under this chapter, an
organization must submit to the commissioner an application in the
form required by the commissioner. The application must include:
(1) for an applicant that is publicly held, the name of
each shareholder or owner of more than five percent of any of the
applicant's stock or options;
(2) the name of any holder of the applicant's bonds or
notes that exceed $100,000;
(3) the name and type of business of each corporation
or other organization described by Subdivision (4) that the
applicant controls or is affiliated with and the nature and extent
of the control or affiliation;
(4) the name and a biographical sketch of each
director, officer, and executive of the applicant and of any entity
listed under Subdivision (3) and a description of any relationship
the applicant or the named individual has with:
(A) a health benefit plan;
(B) a health maintenance organization;
(C) an insurer;
(D) a utilization review agent;
(E) a nonprofit health corporation;
(F) a payor;
(G) a health care provider; [or]
(H) a group representing any of the entities
described by Paragraphs (A) through (G); or
(I) any other independent review organization in
the state;
(5) the percentage of the applicant's revenues that
are anticipated to be derived from independent reviews conducted
under Subchapter I, Chapter 4201;
(6) a description of:
(A) the areas of expertise of the physicians or
other health care providers making review determinations for the
applicant;
(B) the procedures used by the applicant to
verify physician and provider credentials, including the computer
processes, electronic databases, and records, if any, used; and
(C) the software used by the credentialing
manager for managing the processes, databases, and records
described by Paragraph (B); [and]
(7) the procedures to be used by the applicant in
making independent review determinations under Subchapter I,
Chapter 4201; and
(8) a description of the applicant's use of
communications, records, and computer processes to manage the
independent review process.
(b) The commissioner shall establish certifications for
independent review of health care services provided to persons
eligible for workers' compensation medical benefits and other
health care services after considering accreditation, if any, by a
nationally recognized accrediting organization that imposes
requirements for accreditation that are the same as, substantially
similar to, or more stringent than the department's requirements
for accreditation.
(c) The department shall make available to applicants
applications for certification to review health care services
provided to persons eligible for workers' compensation medical
benefits and other health care services.
(d) The commissioner shall require that each officer of the
applicant and each owner or shareholder of the applicant or, if the
purchaser is publicly held, each owner or shareholder described by
Subsection (a)(1) submit a complete and legible set of fingerprints
to the department for the purpose of obtaining criminal history
record information from the Department of Public Safety and the
Federal Bureau of Investigation. The department shall conduct a
criminal history check of each applicant using information:
(1) provided under this section; and
(2) made available to the department by the Department
of Public Safety, the Federal Bureau of Investigation, and any
other criminal justice agency under Chapter 411, Government Code.
(e) An application for certification for review of health
care services must require an organization that is accredited by an
organization described by Subsection (b) to provide the department
evidence of the accreditation. The commissioner shall consider the
evidence if the accrediting organization published and made
available to the commissioner the organization's requirements for
and methods used in the accreditation process. An independent
review organization that is accredited by an organization described
by Subsection (b) may request that the department expedite the
application process.
(f) A certified independent review organization that
becomes accredited by an organization described by Subsection (b)
may provide evidence of that accreditation to the department that
shall be maintained in the department's file related to the
independent review organization's certification.
(g) Certification must be renewed biennially.
SECTION 4. Section 4202.005, Insurance Code, is amended to
read as follows:
Sec. 4202.005. PERIODIC REPORTING OF INFORMATION; BIENNIAL
[ANNUAL] DESIGNATION; UPDATES AND INSPECTION. (a) An independent
review organization shall biennially [annually] submit the
information required in an application for certification under
Section 4202.004. Anytime there is a material change in the
information the organization included in the application, the
organization shall submit updated information to the commissioner.
(b) The commissioner shall designate biennially [annually]
each organization that meets the standards for an independent
review organization adopted under Section 4202.002.
(c) Information regarding a material change must be
submitted on a form adopted by the commissioner not later than the
30th day after the date the material change occurs. If the material
change is a relocation of the organization:
(1) the organization must inform the department that
the location is available for inspection before the date of the
relocation by the department; and
(2) on request of the department, an officer shall
attend the inspection.
SECTION 5. Chapter 4202, Insurance Code, is amended by
adding Sections 4202.011, 4202.012, 4202.013, and 4202.014 to read
as follows:
Sec. 4202.011. ADVISORY GROUP. (a) The commissioner shall
establish a group to advise the department and make recommendations
related to the efficiency of independent review.
(b) The commissioner shall appoint as a member of the group
a department employee to report to the commissioner group
recommendations and policies. The commissioner shall appoint as
members of the group individuals who have applied for membership,
including:
(1) two officers of different independent review
organizations certified under this chapter;
(2) an officer of a utilization review organization
certified under Chapter 4201;
(3) an officer or representative of an association of
physicians with knowledge of and interest in the independent review
process;
(4) an officer or representative of an association of
insurance carriers with knowledge of and interest in the
independent review process; and
(5) two officers or representatives of different
patient advocacy associations with knowledge of and interest in the
independent review process.
(c) A recommendation of the advisory group does not bind the
commissioner.
(d) Members of the group serve two-year terms. The
commissioner shall appoint a replacement member in the event of a
vacancy to serve the remainder of the unexpired term.
(e) The commissioner shall designate one member to serve as
presiding member of the group. A member may serve more than one
term as presiding member.
(f) The advisory group shall meet annually and otherwise at
the request of the presiding member or the commissioner. The group
shall make recommendations at least annually to the commissioner.
(g) A member of the group may not receive compensation for
service as a group member.
Sec. 4202.012. REFERRAL. The commissioner by rule shall
require referral by random assignment of adverse determinations
under Subchapter I, Chapter 4201, to independent review
organizations. On referral of a determination, the commissioner
shall notify:
(1) the utilization review agent;
(2) the payor;
(3) the independent review organization;
(4) the patient, as defined by Section 4201.002, or
the patient's representative; and
(5) the provider of record as defined by Section
4201.002.
Sec. 4202.013. PRIMARY OFFICE IN THIS STATE REQUIRED. An
independent review organization operating under this chapter must
maintain the organization's primary office in this state.
Sec. 4202.014. PREEMPTION. The commissioner shall suspend
enforcement of any provision of this chapter that the commissioner
determines to be preempted by 42 U.S.C. Section 300gg-19.
SECTION 6. Chapter 4202, Insurance Code, as amended by this
Act, applies only to an independent review organization that
applies for an initial certification or renewal certification on or
after January 1, 2014. An organization certified 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 7. This Act takes effect September 1, 2013.
______________________________ ______________________________
President of the Senate Speaker of the House
I certify that H.B. No. 2645 was passed by the House on May 2,
2013, by the following vote: Yeas 145, Nays 2, 2 present, not
voting; and that the House concurred in Senate amendments to H.B.
No. 2645 on May 24, 2013, by the following vote: Yeas 139, Nays 6,
3 present, not voting.
______________________________
Chief Clerk of the House
I certify that H.B. No. 2645 was passed by the Senate, with
amendments, on May 22, 2013, by the following vote: Yeas 30, Nays
1.
______________________________
Secretary of the Senate
APPROVED: __________________
Date
__________________
Governor