Bill Text: TX HB620 | 2013-2014 | 83rd Legislature | Comm Sub

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Bill Title: Relating to the regulation of certain health care provider network contract arrangements; providing an administrative penalty; authorizing a fee.

Sponsorship: Bipartisan Bill

Status: (Introduced - Dead) 2013-05-07 - Laid on the table subject to call [HB620 Detail]

Download: Texas-2013-HB620-Comm_Sub.html

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83R12799 SCL-F
By: Eiland, Bonnen of Galveston H.B. No. 620
Substitute the following for H.B. No. 620:
By: Eiland C.S.H.B. No. 620

A BILL TO BE ENTITLED
AN ACT
relating to the regulation of certain health care provider network
contract arrangements; providing an administrative penalty;
authorizing a fee.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subtitle F, Title 8, Insurance Code, is amended
by adding Chapter 1458 to read as follows:
CHAPTER 1458. PROVIDER NETWORK CONTRACT ARRANGEMENTS
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 1458.001. GENERAL DEFINITIONS. In this chapter:
(1) "Affiliate" means a person who, directly or
indirectly through one or more intermediaries, controls, is
controlled by, or is under common control with another person.
(2) "Contracting entity" means a person who:
(A) enters into a direct contract with a provider
for the delivery of health care services to covered individuals;
and
(B) in the ordinary course of business
establishes a provider network or networks for access by another
party.
(3) "Covered individual" means an individual who is
covered under a health benefit plan.
(4) "Express authority" means a provider's consent
that is obtained through separate signature lines for each line of
business.
(5) "Health care services" means services provided for
the diagnosis, prevention, treatment, or cure of a health
condition, illness, injury, or disease.
(6) "Person" has the meaning assigned by Section
823.002.
(7)(A) "Provider" means:
(i) an advanced practice nurse;
(ii) an optometrist;
(iii) a therapeutic optometrist;
(iv) a physician;
(v) a professional association composed
solely of physicians, optometrists, or therapeutic optometrists;
(vi) a single legal entity authorized to
practice medicine owned by two or more physicians;
(vii) a nonprofit health corporation
certified by the Texas Medical Board under Chapter 162, Occupations
Code;
(viii) a partnership composed solely of
physicians, optometrists, or therapeutic optometrists;
(ix) a physician-hospital organization
that acts exclusively as an administrator for a provider to
facilitate the provider's participation in health care contracts;
or
(x) an institution that is licensed under
Chapter 241, Health and Safety Code.
(B) "Provider" does not include a
physician-hospital organization that leases or rents the
physician-hospital organization's network to another party.
(8) "Provider network contract" means a contract
between a contracting entity and a provider for the delivery of, and
payment for, health care services to a covered individual.
Sec. 1458.002. DEFINITION OF HEALTH BENEFIT PLAN. (a) In
this chapter, "health benefit plan" means:
(1) a hospital and medical expense incurred policy;
(2) a nonprofit health care service plan contract;
(3) a health maintenance organization subscriber
contract; or
(4) any other health care plan or arrangement that
pays for or furnishes medical or health care services.
(b) "Health benefit plan" does not include one or more or
any combination of the following:
(1) coverage only for accident or disability income
insurance or any combination of those coverages;
(2) credit-only insurance;
(3) coverage issued as a supplement to liability
insurance;
(4) liability insurance, including general liability
insurance and automobile liability insurance;
(5) workers' compensation or similar insurance;
(6) a discount health care program, as defined by
Section 7001.001;
(7) coverage for on-site medical clinics;
(8) automobile medical payment insurance;
(9) a multiple employer welfare arrangement that holds
a certificate of authority under Chapter 846; or
(10) other similar insurance coverage, as specified by
federal regulations issued under the Health Insurance Portability
and Accountability Act of 1996 (Pub. L. No. 104-191), under which
benefits for medical care are secondary or incidental to other
insurance benefits.
(c) "Health benefit plan" does not include the following
benefits if they are provided under a separate policy, certificate,
or contract of insurance, or are otherwise not an integral part of
the coverage:
(1) dental or vision benefits;
(2) benefits for long-term care, nursing home care,
home health care, community-based care, or any combination of these
benefits;
(3) other similar, limited benefits, including
benefits specified by federal regulations issued under the Health
Insurance Portability and Accountability Act of 1996 (Pub. L. No.
104-191); or
(4) a Medicare supplement benefit plan described by
Section 1652.002.
(d) "Health benefit plan" does not include coverage limited
to a specified disease or illness or hospital indemnity coverage or
other fixed indemnity insurance coverage if:
(1) the coverage is provided under a separate policy,
certificate, or contract of insurance;
(2) there is no coordination between the provision of
the coverage and any exclusion of benefits under any group health
benefit plan maintained by the same plan sponsor; and
(3) the coverage is paid with respect to an event
without regard to whether benefits are provided with respect to
such an event under any group health benefit plan maintained by the
same plan sponsor.
Sec. 1458.003. EXEMPTIONS. This chapter does not apply:
(1) under circumstances in which access to the
provider network is granted to an entity that operates under the
same brand licensee program as the contracting entity; or
(2) to a contract between a contracting entity and a
discount health care program operator, as defined by Section
7001.001.
Sec. 1458.004. RULEMAKING AUTHORITY. The commissioner may
adopt rules to implement this chapter.
SUBCHAPTER B. REGISTRATION REQUIREMENTS
Sec. 1458.051. REGISTRATION REQUIRED. (a) Unless the
person holds a certificate of authority issued by the department to
engage in the business of insurance in this state or operates a
health maintenance organization under Chapter 843, a person must
register with the department not later than the 30th day after the
date on which the person begins acting as a contracting entity in
this state.
(b) Notwithstanding Subsection (a), under Section 1458.055
a contracting entity that holds a certificate of authority issued
by the department to engage in the business of insurance in this
state or is a health maintenance organization shall file with the
commissioner an application for exemption from registration under
which the affiliates may access the contracting entity's network.
(c) An application for an exemption filed under Subsection
(b) must be accompanied by a list of the contracting entity's
affiliates. The contracting entity shall update the list with the
commissioner on an annual basis.
(d) A list of affiliates filed with the commissioner under
Subsection (c) is public information and is not exempt from
disclosure under Chapter 552, Government Code.
Sec. 1458.052. DISCLOSURE OF INFORMATION. (a) A person
required to register under Section 1458.051 must disclose:
(1) all names used by the contracting entity,
including any name under which the contracting entity intends to
engage or has engaged in business in this state;
(2) the mailing address and main telephone number of
the contracting entity's headquarters;
(3) the name and telephone number of the contracting
entity's primary contact for the department; and
(4) any other information required by the commissioner
by rule.
(b) The disclosure made under Subsection (a) must include a
description or a copy of the applicant's basic organizational
structure documents and a copy of organizational charts and lists
that show:
(1) the relationships between the contracting entity
and any affiliates of the contracting entity, including subsidiary
networks or other networks; and
(2) the internal organizational structure of the
contracting entity's management.
Sec. 1458.053. SUBMISSION OF INFORMATION. Information
required under this subchapter must be submitted in a written or
electronic format adopted by the commissioner by rule.
Sec. 1458.054. FEES. The department may collect a
reasonable fee set by the commissioner as necessary to administer
the registration process. Fees collected under this chapter shall
be deposited in the Texas Department of Insurance operating fund.
Sec. 1458.055. EXEMPTION FOR AFFILIATES. (a) The
commissioner shall grant an exemption for affiliates of a
contracting entity if the contracting entity holds a certificate of
authority issued by the department to engage in the business of
insurance in this state or is a health maintenance organization if
the commissioner determines that:
(1) the affiliate is not subject to a disclaimer of
affiliation under Chapter 823; and
(2) the relationships between the person who holds a
certificate of authority and all affiliates of the person,
including subsidiary networks or other networks, are disclosed and
clearly defined.
(b) An exemption granted under this section applies only to
registration. An entity granted an exemption is otherwise subject
to this chapter.
SUBCHAPTER C. RIGHTS AND RESPONSIBILITIES OF A CONTRACTING ENTITY
Sec. 1458.101. CONTRACT REQUIREMENTS. (a) In this
section, the following are each considered a single separate line
of business:
(1) preferred provider benefit plans covering
individuals and groups;
(2) exclusive provider benefit plans covering
individuals and groups;
(3) health maintenance organization plans covering
individuals and groups;
(4) Medicare Advantage or similar plans issued in
connection with a contract with the Centers for Medicare and
Medicaid Services;
(5) Medicaid managed care; and
(6) the state child health plan established under
Chapter 62, Health and Safety Code, or the comparable plan under
Chapter 63, Health and Safety Code.
(b) A contracting entity may not sell, lease, or otherwise
transfer information regarding the payment or reimbursement terms
of the provider network contract without the express authority of
and prior adequate notification of the provider.
(c) The provider network contract must require that on the
request of the provider, the contracting entity will provide
information necessary to determine whether a particular person has
been authorized to access the provider's health care services and
contractual discounts.
(d) To be enforceable against a provider, a provider network
contract, including the lines of business described by Subsections
(a) and (e), must also specify a separate fee schedule for each such
line of business. The separate fee schedule may describe specific
services or procedures that the provider will deliver along with a
corresponding payment, may describe a methodology for calculating
payment based on a published fee schedule, or may describe payment
in any other reasonable manner that specifies a definite payment
for services. The fee information may be provided by any reasonable
method, including electronically.
(e) The commissioner may, by rule, add additional lines of
business for which express authority is required.
Sec. 1458.102. CONTRACT ACCESS. (a) A contracting entity
may not provide a person access to health care services or
contractual discounts under a provider network contract unless the
provider network contract specifically states that the person must
comply with all applicable terms, limitations, and conditions of
the provider network contract.
(b) For the purposes of this section, a contracting entity
shall permit reasonable access, including electronic access, to the
provider during business hours for the review of the provider
network contract. The information may be used or disclosed only for
the purposes of complying with the terms of the contract or state
law.
Sec. 1458.103. ENFORCEMENT. The commissioner may impose a
sanction under Chapter 82 or assess an administrative penalty under
Chapter 84 on a contracting entity that violates this chapter or a
rule adopted to implement this chapter.
SECTION 2. (a) The change in law made by this Act applies
only to a provider network contract entered into or renewed on or
after September 1, 2013. A provider network contract entered into
or renewed before September 1, 2013, 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.
(b) For the purposes of compliance with Section 1458.101,
Insurance Code, as added by this Act, a provider's express
authority is presumed if:
(1) the provider network contract is in existence
before September 1, 2013;
(2) on the first renewal after September 1, 2013, the
contracting entity sends a written renewal notice by United States
mail to the provider;
(3) the notice described by Subdivision (2) of this
subsection:
(A) contains a statement that failure to timely
respond serves as assent to the renewal;
(B) contains separate signature lines for each
line of business applicable to the contract; and
(C) specifies the separate fee schedule for each
line of business applicable to the contract, described in any
reasonable manner and which may be provided electronically; and
(4) the provider fails to respond within 60 days of
receipt of the notice and has not objected to the renewal.
SECTION 3. This Act takes effect September 1, 2013.