H.B. No. 1772

	AN ACT
	relating to the regulation of certain benefit plans.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
	SECTION 1.  Section 1273.001(4), Insurance Code, is amended
	to read as follows:
	(4)  "Point-of-service plan" means an arrangement
	under which:
	(A)  an enrollee chooses to obtain benefits or
	services through:
	(i)  a health maintenance organization
	delivery network, including a limited provider network; or
	(ii)  a non-network delivery system outside
	the health maintenance organization delivery network, including an
	exclusive provider benefit plan under Chapter 1301 or a limited
	provider network, that is administered under an indemnity benefit
	arrangement for the cost of health care services; or
	(B)  indemnity benefits for the cost of health
	care services are provided by an insurer or group hospital service
	corporation in conjunction with network benefits arranged or
	provided by a health maintenance organization.
	SECTION 2.  Section 1301.001, Insurance Code, is amended by
	amending Subdivision (1) and adding Subdivision (1-a) to read as
	follows:
	(1)  "Exclusive provider benefit plan" means a benefit
	plan in which an insurer excludes benefits to an insured for some or
	all services, other than emergency care services required under
	Section 1301.155, provided by a physician or health care provider
	who is not a preferred provider.
	(1-a)  "Health care provider" means a practitioner,
	institutional provider, or other person or organization that
	furnishes health care services and that is licensed or otherwise
	authorized to practice in this state. The term does not include a
	physician.
	SECTION 3.  Section 1301.003, Insurance Code, is amended to
	read as follows:
	Sec. 1301.003.  PREFERRED PROVIDER BENEFIT PLANS AND
	EXCLUSIVE PROVIDER BENEFIT PLANS PERMITTED. A preferred provider
	benefit plan or an exclusive provider benefit plan [health
	insurance policy that provides different benefits from the basic
	level of coverage for the use of preferred providers and] that meets
	the requirements of this chapter is not:
	(1)  unjust under Chapter 1701;
	(2)  unfair discrimination under Subchapter A or B,
	Chapter 544; or
	(3)  a violation of Subchapter B or C, Chapter 1451.
	SECTION 4.  Section 1301.0041, Insurance Code, is amended to
	read as follows:
	Sec. 1301.0041.  APPLICABILITY.  (a) Except as otherwise
	specifically provided by this chapter, this [This] chapter applies
	to each [any] preferred provider benefit plan in which an insurer
	provides, through the insurer's health insurance policy, for the
	payment of a level of coverage that is different depending on
	whether an [from the basic level of coverage provided by the health
	insurance policy if the] insured uses a preferred provider or a
	nonpreferred provider.
	(b)  Unless otherwise specified, an exclusive provider
	benefit plan is subject to this chapter in the same manner as a
	preferred provider benefit plan.
	(c)  This chapter does not apply to:
	(1)  the child health plan program under Chapter 62,
	Health and Safety Code; or
	(2)  a Medicaid managed care program under Chapter 533,
	Government Code.
	SECTION 5.  Subchapter A, Chapter 1301, Insurance Code, is
	amended by adding Section 1301.0042 to read follows:
	Sec. 1301.0042.  APPLICABILITY OF INSURANCE LAW. (a)
	Except as provided by Subsection (b), a provision of this code or
	another insurance law of this state that applies to a preferred
	provider benefit plan applies to an exclusive provider benefit plan
	except to the extent that the commissioner determines the provision
	to be inconsistent with the function and purpose of an exclusive
	provider benefit plan.
	(b)  An exclusive provider benefit plan may not provide
	dental care benefits.
	SECTION 6.  Section 1301.0045, Insurance Code, is amended to
	read as follows:
	Sec. 1301.0045.  CONSTRUCTION OF CHAPTER. (a)  Except as
	provided by Section 1301.0046, this chapter may not be construed to
	limit the level of reimbursement or the level of coverage,
	including deductibles, copayments, coinsurance, or other
	cost-sharing provisions, that are applicable to preferred
	providers or, for plans other than exclusive provider benefit
	plans, nonpreferred providers.
	(b)  Except as provided by Sections 1301.0052 and 1301.155,
	this chapter may not be construed to require an exclusive provider
	benefit plan to compensate a nonpreferred provider for services
	provided to an insured.
	SECTION 7.  Section 1301.0046, Insurance Code, is amended to
	read as follows:
	Sec. 1301.0046.  COINSURANCE REQUIREMENTS FOR SERVICES OF
	NONPREFERRED PROVIDERS. The insured's coinsurance applicable to
	payment to nonpreferred providers may not exceed 50 percent of the
	total covered amount applicable to the medical or health care
	services. This section does not apply to an exclusive provider
	benefit plan.
	SECTION 8.  Sections 1301.005(a) and (b), Insurance Code,
	are amended to read as follows:
	(a)  An insurer offering a preferred provider benefit plan
	shall ensure that both preferred provider benefits and basic level
	benefits are reasonably available to all insureds within a
	designated service area. This subsection does not apply to an
	exclusive provider benefit plan.
	(b)  If services are not available through a preferred
	provider within a designated [the] service area under a preferred
	provider benefit plan or an exclusive provider benefit plan, an
	insurer shall reimburse a physician or health care provider who is
	not a preferred provider at the same percentage level of
	reimbursement as a preferred provider would have been reimbursed
	had the insured been treated by a preferred provider.
	SECTION 9.  Subchapter A, Chapter 1301, Insurance Code, is
	amended by adding Sections 1301.0051, 1301.0052, 1301.0053, and
	1301.0056 to read as follows:
	Sec. 1301.0051.  EXCLUSIVE PROVIDER BENEFIT PLANS: QUALITY
	IMPROVEMENT AND UTILIZATION MANAGEMENT. (a) An insurer that offers
	an exclusive provider benefit plan shall establish procedures to
	ensure that health care services are provided to insureds under
	reasonable standards of quality of care that are consistent with
	prevailing professionally recognized standards of care or
	practice. The procedures must include:
	(1)  mechanisms to ensure availability, accessibility,
	quality, and continuity of care;
	(2)  subject to Section 1301.059, a continuing quality
	improvement program to monitor and evaluate services provided under
	the plan, including primary and specialist physician services and
	ancillary and preventive health care services, provided in
	institutional or noninstitutional settings;
	(3)  a method of recording formal proceedings of
	quality improvement program activities and maintaining quality
	improvement program documentation in a confidential manner;
	(4)  subject to Section 1301.059, a physician review
	panel to assist the insurer in reviewing medical guidelines or
	criteria;
	(5)  a patient record system that facilitates
	documentation and retrieval of clinical information for the
	insurer's evaluation of continuity and coordination of services and
	assessment of the quality of services provided to insureds under
	the plan;
	(6)  a mechanism for making available to the
	commissioner the clinical records of insureds for examination and
	review by the commissioner on request of the commissioner; and
	(7)  a specific procedure for the periodic reporting of
	quality improvement program activities to:
	(A)  the governing body and appropriate staff of
	the insurer; and
	(B)  physicians and health care providers that
	provide health care services under the plan.
	(b)  Minutes of a formal proceeding of the quality
	improvement program established under Subsection (a) shall be made
	available to the commissioner on request of the commissioner.
	(c)  Insured records made available to the commissioner
	under Subsection (a)(6) are confidential and privileged, and are
	not subject to Chapter 552, Government Code, or to subpoena, except
	to the extent necessary for the commissioner to enforce this
	chapter.
	Sec. 1301.0052.  EXCLUSIVE PROVIDER BENEFIT PLANS:
	REFERRALS FOR MEDICALLY NECESSARY SERVICES. (a) If a covered
	service is medically necessary and is not available through a
	preferred provider, the issuer of an exclusive provider benefit
	plan, on the request of a preferred provider, shall:
	(1)  approve the referral of an insured to a
	nonpreferred provider within a reasonable period; and
	(2)  fully reimburse the nonpreferred provider at the
	usual and customary rate or at a rate agreed to by the issuer and the
	nonpreferred provider.
	(b)  An exclusive provider benefit plan must provide for a
	review by a health care provider with expertise in the same
	specialty as or a specialty similar to the type of health care
	provider to whom a referral is requested under Subsection (a)
	before the issuer of the plan may deny the referral.
	Sec. 1301.0053.  EXCLUSIVE PROVIDER BENEFIT PLANS:
	EMERGENCY CARE. If a nonpreferred provider provides emergency care
	as defined by Section 1301.155 to an enrollee in an exclusive
	provider benefit plan, the issuer of the plan shall reimburse the
	nonpreferred provider at the usual and customary rate or at a rate
	agreed to by the issuer and the nonpreferred provider for the
	provision of the services.
	Sec. 1301.0056.  EXAMINATIONS AND FEES. (a) The
	commissioner may examine an insurer to determine the quality and
	adequacy of a network used by an exclusive provider benefit plan
	offered by the insurer under this chapter. An insurer is subject to
	a qualifying examination of the insurer's exclusive provider
	benefit plans and subsequent quality of care examinations by the
	commissioner at least once every five years. Documentation
	provided to the commissioner during an examination conducted under
	this section is confidential and is not subject to disclosure as
	public information under Chapter 552, Government Code.
	(b)  An insurer examined under this section shall pay the
	cost of the examination in an amount determined by the
	commissioner.
	(c)  The department shall collect an assessment in an amount
	determined by the commissioner from the insurer at the time of the
	examination to cover all expenses attributable directly to the
	examination, including the salaries and expenses of department
	employees and all reasonable expenses of the department necessary
	for the administration of this chapter.
	(d)  The department shall deposit an assessment collected
	under this section to the credit of the Texas Department of
	Insurance operating account. Money deposited under this subsection
	shall be used to pay the salaries and expenses of examiners and all
	other expenses relating to the examination of insurers under this
	section.
	SECTION 10.  Subchapter D, Chapter 1301, Insurance Code, is
	amended by adding Section 1301.1581 to read as follows:
	Sec. 1301.1581.  INFORMATION CONCERNING EXCLUSIVE PROVIDER
	BENEFIT PLANS. (a) In this section, "prospective insured" has the
	meaning assigned by Section 1301.158.
	(b)  In addition to the information required to be provided
	under Section 1301.158, an insurer that offers an exclusive
	provider benefit plan shall provide to a current or prospective
	group contract holder or current or prospective insured notice that
	the benefit plan includes limited coverage for services provided by
	a physician or health care provider that is not a preferred
	provider.
	(c)  An identification card or similar document issued by an
	insurer to an insured in an exclusive provider benefit plan must
	display:
	(1)  the first date on which the insured became insured
	under the plan;
	(2)  a toll-free number that a physician or health care
	provider may use to obtain the date on which the insured became
	insured under the plan; and
	(3)  the acronym "EPO" or the phrase "Exclusive
	Provider Organization" on the card in a location of the insurer's
	choice.
	SECTION 11.  The change in law made by this Act applies only
	to an exclusive provider benefit plan that is delivered, issued for
	delivery, or renewed on or after January 1, 2012. An exclusive
	provider benefit plan that is delivered, issued for delivery, or
	renewed before January 1, 2012, is governed by the law as it existed
	immediately before the effective date of this Act, and that law is
	continued in effect for that purpose.
	SECTION 12.  This Act takes effect September 1, 2011.
	______________________________	______________________________
	President of the Senate	Speaker of the House
	I certify that H.B. No. 1772 was passed by the House on May 5,
	2011, by the following vote:  Yeas 146, Nays 0, 2 present, not
	voting.
	______________________________
	Chief Clerk of the House
	I certify that H.B. No. 1772 was passed by the Senate on May
	19, 2011, by the following vote:  Yeas 31, Nays 0
	.
	______________________________
	Secretary of the Senate
	APPROVED:  _____________________
	Date
	_____________________
	Governor