HBA-DMH H.B. 2827 77(R)    BILL ANALYSIS


Office of House Bill AnalysisH.B. 2827
By: Smithee
Insurance
4/8/2001
Introduced



BACKGROUND AND PURPOSE 

A list of physicians and providers divided by specialty or provider type is
usually included in the material that a health maintenance organization
(HMO) or preferred provider benefit plan (PPO) provides to current and
prospective enrollees or insureds.  There may be limitations or conditions
that apply to the use of specialty physicians or providers that are not
applicable to other physicians or providers.  However, HMOs and PPOs do not
always disclose these limitations and conditions and such omissions may
mislead people who are selecting a health benefit plan.  Additionally, some
HMOs and PPOs attempt to encourage enrollees and insureds to use the
services of a particular physician or provider without disclosing this
information.  House Bill 2827 expands the disclosure requirements for  HMOs
and PPOs. 

RULEMAKING AUTHORITY

It is the opinion of the Office of House Bill Analysis that this bill does
not expressly delegate any additional rulemaking authority to a state
officer, department, agency, or institution. 

ANALYSIS

House Bill 2827 amends the Insurance Code to require each health
maintenance organization (HMO) to provide an accurate written disclosure of
any limitation or condition on enrollee access to a specialty physician or
provider in the HMO's health care plan terms and conditions, current list
of physicians and providers, and handbook to allow a current or prospective
group contract holder and current or prospective enrollee eligible for
enrollment in a health care plan to make comparisons and informed decisions
before selecting among health care plans.  The bill requires each preferred
provider benefit plan (PPO) to provide an accurate written disclosure of
such information in the PPO's health care plan policy, current list of
preferred providers, and handbook.  

The bill requires an HMO or PPO to disclose any practice used by the HMO or
PPO to attempt to persuade, direct, or otherwise encourage an enrollee or
an insured to use the services of a particular physician or provider and
the identity of those physicians or providers.  The bill prohibits an HMO
or PPO from limiting or conditioning an enrollee's or insured's access to
any physician or provider or from attempting to persuade, direct, or
otherwise encourage an enrollee or insured to use the services of a
particular physician or provider, unless the HMO or PPO has made the
required disclosure.  The bill provides a description of a standard
disclosure statement.   

The bill modifies mandatory disclosure requirements for PPOs by requiring a
current list of preferred providers to be updated and provided to all
insureds at least  quarterly, rather than annually. 

EFFECTIVE DATE

September 1, 2001.  The Act applies only to an insurance policy, contract,
or evidence of coverage delivered, issued for delivery, or renewed on or
after January 1, 2002.