HBA-DMH H.B. 2828 77(R)    BILL ANALYSIS


Office of House Bill AnalysisH.B. 2828
By: Smithee
Insurance
3/18/2001
Introduced



BACKGROUND AND PURPOSE 

The 76th Legislature set standards for health maintenance organizations
(HMO) delegating certain responsibilities to physician networks.  During
the interim, representatives of health plans, consumers, and physician
networks met to develop modifications to the statute.  It was determined
that confusion still remains among consumers about the access requirements
for limited provider networks.  Additionally, HMO network failures prompted
the establishment of requirements and enforcement provisions to ensure
compliance with the statute.  House Bill 2828 authorizes the commissioner
of insurance to impose sanctions against an HMO that fails to provide an
enrollee with the required explanation and modifies HMO complaint and
reporting requirements. 

RULEMAKING AUTHORITY

It is the opinion of the Office of House Bill Analysis that  rulemaking
authority expressly delegated to the commissioner of insurance in SECTION 2
(Section 12, Article 20A, Insurance Code) and SECTION 3 (Section 18C,
Article 20A, Insurance Code) of this bill. 

ANALYSIS

House Bill 2828 amends the Insurance Code to add an explanation of
delegated networks to the items a health maintenance organization (HMO) is
required to provide an accurate written description of in its health care
plan terms and conditions.  The bill requires an HMO to provide a person
with the required descriptions relating to limited provider networks and
delegated networks not later than the 30th day after the date a person
enrolls in an HMO health care plan.  When an HMO issues an identification
card to an enrollee, the bill requires the HMO to provide the enrollee with
standardized information relating to limited provider networks.  The bill
prohibits the HMO from delegating these duties or waiving or eliminating
these duties by contract.  

The bill requires a HMO to provide copies of received complaints to the
Texas Department of Insurance (department) in a format prescribed by rule
by the commissioner of insurance (commissioner).  The bill requires the
department to periodically issue a report containing certain information
about the complaints it receives from the HMOs, make the report available
to the public, and include information to assist the public in evaluating
the information contained in the report.   

The bill requires the commissioner by rule to establish a system to ensure
that certain information  an HMO is required to provide to a delegated
network is complete, accurate, and provided in a timely manner. The bill
authorizes the commissioner to impose sanctions or penalties on an HMO that
violates these provisions.  

The bill requires an HMO whose plan includes limited provider networks or
delegated networks to permit an enrollee to complete an episode of care
without changing the enrollee's primary care physician or specialist
physician when the physician moves from one limited provider network or
delegated care network to another under certain conditions.  The bill
provides that such a  move does not release the HMO from the obligation to
reimburse the specified physician involved with the care and treatment of
the patient. The bill requires a delegated network that enters into a
delegation agreement with an HMO to  establish and provide in writing to
the HMO a process for enrollees to have requests considered for specific
service outside the delegated network.  The bill requires a denial of
service by a delegated network to an enrollee to be sent by a delegated
network to the HMO for second review.  The bill provides that a review or
decision by a delegated network must comply with all legally required
medical necessity determinations and that these provisions do not apply to
a review or determination subject to appeal under current law.  

EFFECTIVE DATE

September 1, 2001, and applies only to a health maintenance organization
contract entered into or renewed on or after January 1, 2002.