HBA-NIK H.B. 3021 76(R)    BILL ANALYSIS


Office of House Bill AnalysisH.B. 3021
By: Smithee
Insurance
3/29/1999
Introduced



BACKGROUND AND PURPOSE 

Enacted by the 75th Legislature, Article 20A.12, Insurance Code, requires
health maintenance organizations (HMOs) to establish a system for
complaints and appeals brought by enrollees and health care providers.  The
system must include a provision to notify an enrollee of the enrollee's
right to appeal an adverse determination to an independent review
organization (IRO).  Some HMOs have concluded that an enrollee's
disagreement with an adverse determination constitutes a complaint and not
an appeal within the meaning of Article 20A.12.  This is important because
an appeal of an adverse determination activates the requirements set forth
by Article 21.58A, Insurance Code, to which HMOs are subject. Under Article
21.58A, an enrollee can request an IRO review of a denied claim.  However,
an enrollee must first complete the utilization review agent's appeal
process before requesting an IRO review. This process is usually used by
insurers to help make payment determinations. 

H.B. 3021 redefines "complaint" to include procedures related to review or
appeal of an adverse determination, and provides that the term does not
include a written dissatisfaction with an adverse determination.  This bill
requires every HMO to implement and maintain a complaint system to provide
reasonable procedures concerning health care services.  This bill also
establishes the provisions for the appeal of adverse determinations. 

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. 

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Section 2(f), Article 20A.02, V.T.C.S. (Texas Health
Maintenance Organization Act), to redefine "complaint" by including
procedures related to review or appeal of an adverse determination; the
denial, reduction, or termination of a service for reasons not related to
medical necessity as aspects of the health maintenance organization's (HMO)
operation.  Provides that the term does not include, rather than a
complaint is not, a provider's or enrollee's oral or written
dissatisfaction or disagreement with an adverse determination. 

SECTION 2.  Amends Section 12, Article 20A.12, V.T.C.S. (Texas Health
Maintenance Organization Act), as amended by Chapters 163 and 1026, Acts of
the 75th Legislature, Regular Session, 1997, as follows: 

Sec. 12.  COMPLAINT SYSTEM.  (a) Requires every HMO to implement, rather
than establish, and maintain a complaint system to provide reasonable
procedures for the resolution of oral and written complaints initiated by
enrollees or providers concerning health care services, rather than an
internal system for the notice and appeal of complaints. 

(b)  Deletes the requirement that each HMO implement and maintain a system
for the resolution of complaints as provided by this section. 

(c)-(e) Redesignated from Subsections (b)-(d), respectively.

 (f) Makes conforming changes.

(g)  Deletes the provision that if the resolution is to deny services on an
adverse determination of medical necessity, the clinical basis used to
reach that decision must be included. Makes a conforming change.
Redesignated from Subsection (f).  

(h)  Specifies that the request for appeal must be in writing, and that the
HMO shall complete the appeals process under this section not later than
the 30th calendar day after the date of the receipt of the written request
for appeal. 

(i) Redesignated from Subsection (h).  Makes a conforming change.

(j)  Provides that if specialty care is in dispute, the appeal panel must
include a person, rather than an additional person, who is a specialist in
the field of care to which the appeal relates.  Redesignates from
Subsection (i). 

(k)-(r) Redesignated from Subsections (j)-(q), respectively.

SECTION 3.  Amends Section 12A, Article 20A.12, V.T.C.S. (Texas Health
Maintenance Organization Act), as added by Chapter 163, Acts of the 75th
Legislature, Regular Session, 1997, as follows: 

Sec.  12A.  New title: APPEAL OF ADVERSE DETERMINATIONS.  (a) Deletes the
provision that the complaint system required by Section 12 of this Act must
include the enumerated notifications to an independent review organization.
Redefines "adverse determination" to include a utilization review agent's
determination that the health care services furnished or proposed to be
furnished to an enrollee are not medically necessary. 

(b) Requires an HMO to implement and maintain an internal appeal system
that provides reasonable procedures for the resolution of an oral or
written appeal concerning dissatisfaction or disagreement with an adverse
determination that is initiated by an enrollee, a person acting on behalf
of an enrollee, or an enrollee's provider of record. Provides that the
appeal system must include procedures for notification, review, and appeal
of an adverse determination in accordance with Article 21.58A (Health Care
Utilization Review Agents), Insurance Code. 

(c) Requires the HMO or utilization review agent to regard the expression
of dissatisfaction or disagreement as an appeal of the adverse
determination, when an enrollee, a person acting on behalf of an enrollee,
or an enrollee's provider of record expresses orally or in writing any
dissatisfaction or disagreement with an adverse determination.  Requires
the HMO to review and resolve the appeal in accordance with Article 21.58A,
Insurance Code. 

(d) Authorizes an HMO to integrate its appeal procedures related to adverse
determinations with the complaint and appeal procedures established by the
HMO under Section 12 of this Act only if the procedures related to adverse
determinations comply with this section and Article 21.58A, Insurance Code. 

SECTION 4.  Redesignates Section 12A, Article 20A.12, V.T.C.S. (Texas
Health Maintenance Organization Act), as added by Chapter 1026, Acts of the
75th Legislature, Texas Health Maintenance Organization Act, as Section
12B. 

SECTION 5.  Effective date: September 1, 1999.
      Makes application of this Act prospective.

SECTION 6.  Emergency clause.