HBA-ATS C.S.H.B. 1764 76(R)BILL ANALYSIS Office of House Bill AnalysisC.S.H.B. 1764 By: Farabee Insurance 3/29/1999 Committee Report (Substituted) BACKGROUND AND PURPOSE On October 21, 1998, President Clinton signed the Women's Health and Cancer Rights Act of 1998 (Act) into law as part of the Omnibus Appropriations Act of 1998. The federal legislation governs most group health plans and health maintenance organizations provided by private and governmental employers. The Act requires that if an eligible participant or beneficiary elects breast reconstruction in connection with a mastectomy, coverage must be provided for: reconstruction of the breast on which mastectomy has been performed, surgery on and reconstruction of the other breast to produce a symmetrical appearance, prostheses, and treatment of physical complications, including lymphedemas, at all stages of mastectomy. Additionally, the law requires notice to be provided to each enrollee regarding the coverage. C.S.H.B. 1764 amends Article 21.53D, Insurance Code, and redesignates it as Article 21.53I, to comply with these federal mandates. In addition, this bill prohibits a health benefit plan from conditioning, limiting, or denying the eligibility of an enrollee to enroll in the health benefit plan or to renew coverage under the terms of the plan solely to avoid the coverage requirements, and from reducing or limiting the reimbursement or payment of, or otherwise penalizing, an attending physician or provider or providing financial incentives or other benefits to an attending physician or provider to induce the attending physician or provider to provide care to an enrollee not permitted under Article 21.53I. This bill also adds a reciprocal exchange insurance company to the types of organizations which offer individual or group evidence of coverage subject to the requirements of redesignated Article 21.53I, Insurance Code. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that rulemaking authority previously delegated to the commissioner of insurance is modified in SECTION 1 (Article 21.53I, Insurance Code) of this bill. SECTION BY SECTION ANALYSIS SECTION 1. Amends Article 21.53D, Insurance Code, as added by Chapter 84, Acts of the 75th Legislature, Regular Session, 1997, by redesignating it as Article 21.53I and amending it, as follows: Art. 21.53I. COVERAGE FOR RECONSTRUCTIVE SURGERY AFTER MASTECTOMY Sec. 1. DEFINITIONS. Adds the definition of "enrollee." Sec. 2. SCOPE OF ARTICLE. (a) Includes a similar coverage document offered by an enumerated list of organizations among the types of documents that evidence coverage provided under a health benefit plan to which only Article 21.53I applies. Adds a reciprocal exchange operating under Chapter 19 (Reciprocal Exchanges) to the types of organizations that offer individual or group evidence of coverage subject to the requirements of Article 21.53I. Makes nonsubstantive and conforming changes. (b) Sets forth that a plan that provides coverage only for a specific disease or other limited benefit except for cancer is not governed by this article. Sets forth that a plan that provides coverage only for wages or payments in lieu of wages for a period during which an employee is absent from work because of sickness or injury is not governed by this article. Sets forth that a plan that provides coverage only for indemnity for hospital confinement, rather than indemnity coverage only, is not governed by this article. Sets forth that a plan that provides coverage only for credit insurance is not governed by this article. Sets forth that a plan that provides coverage only for hospital expenses, rather than for specified accident, hospital indemnity, or other limited benefits health insurance policies, is not governed by this article. Removes small employer plans written under Chapter 26 (Health Insurance Availability) from the types of plans not governed by this article. Makes conforming and nonsubstantive changes. Sec. 3. COVERAGE REQUIRED. (a) Provides that a health benefit plan that provides coverage for mastectomy must provide coverage for reconstruction of the breast on which the mastectomy has been performed, surgery and reconstruction of the other breast to achieve a symmetrical appearance, and prostheses and treatment of physical complications, including lymphedemas, at all stages of mastectomy. (b) Requires the coverage described in this section to be provided in the manner determined to be appropriate in consultation with the attending physician and the enrollee. (c) Authorizes the coverage described in this section to be subject to deductibles, copayments, and coinsurance provisions that are consistent with deductibles, copayments, and coinsurance required for analogous benefits under the health benefit plan. (d) Prohibits the benefits required by this subchapter from being subject to dollar limitations other than the health benefit plan's lifetime maximum benefits. Deletes the provision authorizing the coverage to be subject to the same deductible or copayment applicable to mastectomy. Sec. 4. PROHIBITIONS. (a) Prohibits a health benefit plan from conditioning, limiting, or denying the eligibility of an enrollee to enroll in the health benefit plan or to renew coverage under the terms of the plan solely for the purpose of avoiding the requirements of this article. Prohibits a health benefit plan from reducing or limiting the reimbursement or payment of, or otherwise penalizing, an attending physician or provider or providing financial incentives or other benefits to an attending physician or provider to induce the attending physician or provider to provide care to an enrollee in a manner inconsistent with this article. (b) Adds this subsection to prohibit the construction of this section to prevent a health benefit plan from negotiating with a physician or provider the level and type of reimbursement that physician or provider will receive for care provided in accordance with this article. Sec. 5. NOTICE. Adds this section to require a health benefit plan that provides coverage under this article to give notice of the availability of that coverage to each enrollee in accordance with rules adopted by the commissioner of insurance (commissioner). Sec. 6. SEVERABILITY. Severability clause. Sec. 7. RULES. Authorizes the commissioner to adopt rules to implement this article and to meet the minimum requirements of federal law. SECTION 2. Effective date: September 1, 1999. Makes application of this Act prospective for a health benefit plan that is delivered, issued for delivery, or renewed, on or after January 1, 2000. SECTION 3. Emergency clause. COMPARISON OF ORIGINAL TO SUBSTITUTE C.S.H.B. 1764 modifies the original bill in SECTION 1 by redesignating Article 21.53D (Coverage for Reconstructive Surgery After Mastectomy), Insurance Code as Article 21.53I, Insurance Code. The substitute also modifies the original bill in SECTION 1 by changing the proposed definition of "enrollee." As modified by the substitute, an "enrollee" is a person entitled to coverage under a health benefit plan. Under the original bill, an "enrollee" means an individual enrolled in a health benefit plan including covered dependents. The substitute modifies the original bill in SECTION 1 by including a similar coverage document offered by an enumerated list of organizations among the types of documents that evidence coverage provided under a health benefit plan to which only Article 21.53I applies, rather than to which Article 21.53I applies. The substitute modifies the original bill in SECTION 1 by redesignating proposed Subdivision (6) to proposed Subdivision (5) in Section (2)(a), which concerns the proposed addition of a reciprocal exchange operating under Chapter 19 (Reciprocal Exchanges) to the types of organizations that offer individual or group evidence of coverage subject to the requirements of Article 21.53I. The substitute modifies the original bill in SECTION 1 by setting forth that a plan that provides coverage only for a specific disease or other limited benefit, rather than limited benefit, except for cancer, is not governed by Article 21.53I. The substitute modifies the original bill by switching the proposed text in Paragraphs (D) and (G), and by specifying that this Article does not apply to a Medicare supplemental policy as defined by Section 1882(j)(1), Social Security Act (42 U.S.C. Section 1395ss), as amended. The substitute modifies the original bill in SECTION 1 by modifying the proposed addition in proposed Subsection (a) of Section 3 that a health benefit plan that provides coverage for mastectomy must provide it for prostheses and physical complications at all stages of mastectomy including lymphedemas, among other requirements, to require coverage for prostheses and treatment of physical complications, including lymphedemas, at all stages of mastectomy. The substitute modifies the original bill in SECTION 1 by striking the term "annual" when referring to deductibles, copayments, and coinsurance provisions in the proposed addition of Subsection (c) to Section 3 of Article 21.53I. The substitute modifies the original bill by providing that deductibles, copayments, and coinsurance be consistent with those required for analogous, rather than established for other, benefits under the health benefit plan. The substitute modifies the original bill in SECTION 1 by changing proposed Subsection (a) of Section 4 to reinstate the proposed deletion of a prohibition against a heath insurer offering a financial incentive for a patient to forego breast reconstruction or to waive the coverage required by Section 3, Article 21.53I. The substitute also modifies the original bill by modifying the proposed addition in proposed Subdivision (1) of Section 4(a) of a prohibition against conditioning, limiting, or denying eligibility to be covered under a health benefit plan. As modified, the proposed addition prohibits a health benefit plan from conditioning, limiting, or denying the eligibility of an enrollee to enroll in the health benefit plan or to renew coverage under the terms of the plan solely for the purpose of avoiding the requirements of Article 21.53I. Under the original bill, the proposed prohibition would have prohibited a health benefit plan from conditioning, limiting, or denying eligibility or continued eligibility to an enrollee, to enroll or to renew coverage under the terms of the health benefit plan, solely for the purpose of avoiding the requirements of Article 21.53I. The substitute also modifies the original bill by deleting the proposed prohibition in proposed Subdivision (2) of Section (4)(a) against a health benefit plan from providing monetary payments or rebates to individuals to encourage enrollees to accept less than the minimum protections required under Article 21.53I. The substitute also modifies the original bill by modifying two proposed prohibitions to combine their provisions in proposed Subdivisions (3) and (4) of Section 4(a) into one single prohibition. Under the original bill, one provision prohibited a health benefit plan from penalizing or otherwise reducing or limiting the reimbursement or payment of an attending physician or provider because such attending physician or provider provided care to an enrollee in accordance with Article 21.53I. The other provision prohibited a health benefit plan from providing financial incentives or other benefits to an attending physician or provider to induce such attending physician or provider to provide care to an enrollee in a manner inconsistent with Article 21.53I. Under the substitute, a health benefit plan is prohibited from reducing or limiting the reimbursement or payment of, or otherwise penalizing, an attending physician or provider or providing financial incentives or other benefits to an attending physician or provider to induce the attending physician or provider to provide care to an enrollee in a manner inconsistent with Article 21.53I. The substitute modifies the original bill in SECTION 1 by making nonsubstantive changes. C.S.H.B. 1764 modifies the original bill in SECTIONS 2 and 3 by changing the effective date from 90 days after adjournment to September 1, 1999. The substitute also modifies the original by making application of this Act prospective for a health benefit plan that is delivered, issued for delivery, or renewed, on or after January 1, 2000. Under the original bill, this Act was required to apply to health benefit plans currently in effect and to those issued or delivered on or after the date of enactment.