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.