HBA-TYH, NMO H.B. 1194 76(R)BILL ANALYSIS


Office of House Bill AnalysisH.B. 1194
By: Turner, Bob
Insurance
7/21/1999
Enrolled



BACKGROUND AND PURPOSE 

The 75th Texas Legislature enacted legislation creating the statewide rural
health care system (system).  The system provided  rural communities an
alternative to urban-based Health Maintenance Organizations now operating
in rural Texas.   However, certain changes were necessary to improve the
implementation of the system.  H.B. 1194 requires the commissioner of
insurance (commissioner)  to consider certain criteria in designating rural
areas for the purposes of the system. This bill also provides that the
system, if providing services on a prepaid basis, must obtain a certificate
of authority under the Texas Health Maintenance Organization Act, and makes
changes regarding the board of directors of the system and the advisory
committee appointed by the board.  

RULEMAKING AUTHORITY

It is the opinion of the Office of House Bill Analysis that rulemaking
authority is expressly delegated to the commissioner of insurance in
SECTION 4 (Article 20C.04, Insurance Code) of this bill.  

SECTION BY SECTION ANALYSIS

SECTION 1.  (a)  GOALS OF SYSTEM.  Provides that the statewide rural health
care system established under Chapter 20C (Statewide Rural Health Care
System), Insurance Code, is designed to incorporate the specified
consumer-oriented attributes considered important to a successful health
care organization.  

(b)  PATIENT RIGHTS POLICIES.  Provides that the statewide rural health
care system is intended to incorporate patient-focused considerations that
include open communication, informed consent, protection of confidentiality
and privacy, full disclosure of program policies and procedures to patients
and providers, coverage of emergency care, disclosure of compensation
arrangements with providers, and efficient appeal of coverage decisions.  
 
(c)  PATIENT-PHYSICIAN RELATIONSHIP.  Provides that the statewide rural
health care system is intended to preserve significant traditional and
ethical relationships between a patient and the patient's health care
provider by ensuring that medical management does not intrude on the
delivery of quality patient care, the process of making health care
decisions remains a matter between a patient and the patient's health care
provider, and nothing in the system will place a health care provider in an
adverse relationship with a patient.  
 
(d)  PUBLIC HEALTH AND PREVENTION.  Provides that the statewide rural
health care system is intended to use incentives to promote healthy
communities and individuals by using a public health model that focuses on
health promotion, illness prevention, patient self-care education, and
incentives that encourage positive health behavior.  
 
(e)  CREDENTIALS AND PEER REVIEW.  Provides that to ensure that enrollees
will receive quality health care, the statewide rural health care system is
intended to focus on processes for obtaining credentials and performing
peer review that take into consideration the unique nature of rural
communities and that track processes required under federal and state law.
Provides that local physicians and hospitals are intended to  retain
responsibility for these processes, which are not intended to exclude
otherwise qualified practitioners from participating in the system.  
 
(f)  QUALITY IMPROVEMENT AND MANAGEMENT.  Provides that the statewide rural
health care system is intended to utilize standard guidelines established
by the National Committee on Quality Assurance and other recognized
accrediting organizations to ensure that the program achieves its
objectives of providing quality patient care and to emphasize establishing
benchmarks to measure program outcomes that will be made available to the
public through proper reporting procedures.  

SECTION 2.  Amends Article 20C.02, Insurance Code, as follows:

(a) Creates from existing text.  Provides that the rules adopted by the
commissioner of insurance (commissioner) used to designate rural areas are
subject to Subsection (b). 

(b) Requires the commissioner, in designating rural areas under Subsection
(a), to consider any area that is delineated as an urbanized area by the
federal census bureau and: 

_is contiguous with and not more than 10 miles away from a rural area
described by Subsection (a); 

_is sparsely populated, compared to areas within a 10-mile radius that are
delineated as urbanized areas by the federal census bureau; 

_has not increased in population in any single calendar year in the seven
years before the commissioner makes the designation; and 

_in which emergency or primary care services are limited or unavailable in
accordance with network access standards imposed by the commissioner under
Chapter 20A (Texas Health Maintenance Organization Act), V.T.I.C., and in
which those services would be made materially more accessible by allowing
access to care in a contiguous area that is eligible to participate in the
system.  

SECTION 3.  Amends Article 20C.03, Insurance Code, to provide that the
system is established to arrange for or provide health care services,
rather than  health care services on a prepaid basis, to enrollees who
reside in rural areas. 

SECTION 4.  Amends Article 20C.04, Insurance Code, to provide that the
system, if it arranges for or provides health care services to enrollees in
exchange for a predetermined payment per enrollee on a prepaid basis, must
obtain a certificate of authority under, and meet each requirement imposed
by, the Texas Health Maintenance Organization Act (Chapter 20A, Insurance
Code).  Authorizes the commissioner, by rule, if the system seeks a
certificate of authority, to provide exceptions to the application of
provisions of the Texas Health Maintenance Organization Act relating to
mileage, distance, and network adequacy and scope.  Makes conforming
changes. 

SECTION 5.  Amends Article 20C.07(a), Insurance Code, to provide that the
members of the board of the statewide rural health care system (board)
serve staggered six-year terms, with the terms of six members expiring
December 1 of each even-numbered year, rather than February 1 of each odd
numbered year. 

SECTION 6.  Amends Article 20C.08(f), Insurance Code, to authorize the
board to appoint an advisory committee to represent health care services,
including representatives of rural, urban, and educational groups and
organizations.  Requires the advisory committee to meet at the will of the
board and advise the board on any matters as directed by the board.
Deletes language referring to the required composition of the advisory
committee. 

SECTION 7.  Amends Article 20C.14, Insurance Code, as follows:

 Art. 20C.14.  New Title: MANDATED PROVIDER.  Removes the exception to the
provision requiring the state to award to the system at least one of any
state managed care contracts awarded to provide health care services to
beneficiaries of the Medical Assistance Program under Chapter 32, Human
Resources Code, in rural areas within the territorial jurisdiction of the
participating providers.  Conditions the requirement that the system be
reimbursed by the Medicaid contracting agency at the state-defined
capitation rate on the extent to which the system operates under a
certificate of authority.  Makes conforming changes. 

SECTION 8.  Effective date: September 1, 1999.  Provides that the term of a
member of the board of directors of the statewide rural health care system
appointed before the effective date of  this Act expires December 1 of the
year before the year the term was to expire under Chapter 20C, Insurance
Code, as that chapter existed before amendment by this Act.  

SECTION 9.  Emergency clause.