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  H.B. No. 2645
 
 
 
 
AN ACT
  relating to certification and operation of independent review
  organizations.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Section 4202.002, Insurance Code, is amended by
  amending Subsection (c) and adding Subsections (d), (e), and (f) to
  read as follows:
         (c)  In addition to the standards described by Subsection
  (b), the commissioner shall adopt standards and rules that:
               (1)  prohibit:
                     (A)  more than one independent review
  organization from operating out of the same office or other
  facility;
                     (B)  an individual or entity from owning more than
  one independent review organization;
                     (C)  an individual from owning stock in or serving
  on the board of more than one independent review organization;
                     (D)  an individual who has served on the board of
  an independent review organization whose certification was revoked
  for cause from serving on the board of another independent review
  organization before the fifth anniversary of the date on which the
  revocation occurred;
                     (E)  an individual who serves as an officer,
  director, manager, executive, or supervisor of an independent
  review organization from serving as an officer, director, manager,
  executive, supervisor, employee, agent, or independent contractor
  of another independent review organization [an attorney who is, or
  has in the past served as, the registered agent for an independent
  review organization from representing the independent review
  organization in legal proceedings]; and
                     (F)  an independent review organization from:
                           (i)  publicly disclosing [confidential]
  patient information protected by the Health Insurance Portability
  and Accountability Act of 1996 (42 U.S.C. Section 1320d et seq.); or
                           (ii)  transmitting the information to a
  subcontractor involved in the independent review process that has
  not signed an agreement similar to the business associate agreement
  required by regulations adopted under the Health Insurance
  Portability and Accountability Act of 1996 (42 U.S.C. Section 1320d
  et seq.) [, except to a provider who is under contract to perform
  the review]; and
               (2)  require:
                     (A)  an independent review organization to:
                           (i)  maintain a physical address and a
  mailing address in this state;
                           (ii)  be incorporated in this state;
                           (iii)  be in good standing with the
  comptroller; and
                           (iv)  be based and certified in this state
  and to locate the organization's primary offices in this state;
                     (B)  an independent review organization to
  [voluntarily] surrender the organization's certification [while
  the organization is under investigation or] as part of an agreed
  order; and
                     (C)  an independent review organization to:
                           (i)  notify the department of an agreement
  to sell the organization or shares in the organization;
                           (ii)  not later than the 60th day before the
  date of the sale, submit the name of the purchaser and a complete
  and legible set of fingerprints for each officer of the purchaser
  and for each owner or shareholder of the purchaser or, if the
  purchaser is publicly held, each owner or shareholder described by
  Section 4202.004(a)(1), and any additional information necessary
  to comply with Section 4202.004(d); and
                           (iii)  complete the transfer of ownership
  after the department has sent written confirmation in accordance
  with Subsection (d) that the requirements of this chapter have been
  satisfied [apply for and receive a new certification after the
  organization is sold to a new owner].
         (d)  The department shall send the written confirmation
  required by Subsection (c)(2)(C)(iii) not later than the expiration
  of the fourth week after the date the department determines the
  requirements are satisfied.
         (e)  Standards to ensure the confidentiality of medical
  records transmitted to an independent review organization under
  Subsection (b)(2) must require organizations and utilization
  review agents to transmit and store records in compliance with the
  Health Insurance Portability and Accountability Act of 1996 (42
  U.S.C. Section 1320d et seq.) and the regulations and standards
  adopted under that Act.
         (f)  The commissioner shall adopt standards requiring that:
               (1)  on application for certification, an officer of
  the organization attest that the office is located at a physical
  address;
               (2)  the office be equipped with a computer system
  capable of:
                     (A)  processing requests for independent review;
  and
                     (B)  accessing all electronic records related to
  the review and the independent review process;
               (3)  all records be maintained electronically and made
  available to the department on request; and
               (4)  in the case of an office located in a residence,
  the working office be located in a room set aside for independent
  review business purposes and in a manner to ensure confidentiality
  in accordance with Subsection (e).
         SECTION 2.  Section 4202.003, Insurance Code, is amended to
  read as follows:
         Sec. 4202.003.  REQUIREMENTS REGARDING TIMELINESS OF
  DETERMINATION. The standards adopted under Section 4202.002 must
  require each independent review organization to make the
  organization's determination:
               (1)  for a life-threatening condition as defined by
  Section 4201.002, not later than the earlier of[:
                     [(A)]  the third [fifth] day after the date the
  organization receives the information necessary to make the
  determination[;] or, with respect to:
                     (A)  a review of a health care service provided to
  a person eligible for workers' compensation medical benefits,
  [(B)]  the eighth day after the date the organization receives the
  request that the determination be made; or
                     (B)  a review of a health care service other than a
  service described by Paragraph (A), the third day after the date the
  organization receives the request that the determination be made;
  or [and]
               (2)  for a condition other than a life-threatening
  condition, not later than the earlier of:
                     (A)  the 15th day after the date the organization
  receives the information necessary to make the determination; or
                     (B)  the 20th day after the date the organization
  receives the request that the determination be made.
         SECTION 3.  Section 4202.004, Insurance Code, is amended to
  read as follows:
         Sec. 4202.004.  CERTIFICATION. (a) To be certified as an
  independent review organization under this chapter, an
  organization must submit to the commissioner an application in the
  form required by the commissioner.  The application must include:
               (1)  for an applicant that is publicly held, the name of
  each shareholder or owner of more than five percent of any of the
  applicant's stock or options;
               (2)  the name of any holder of the applicant's bonds or
  notes that exceed $100,000;
               (3)  the name and type of business of each corporation
  or other organization described by Subdivision (4) that the
  applicant controls or is affiliated with and the nature and extent
  of the control or affiliation;
               (4)  the name and a biographical sketch of each
  director, officer, and executive of the applicant and of any entity
  listed under Subdivision (3) and a description of any relationship
  the applicant or the named individual has with:
                     (A)  a health benefit plan;
                     (B)  a health maintenance organization;
                     (C)  an insurer;
                     (D)  a utilization review agent;
                     (E)  a nonprofit health corporation;
                     (F)  a payor;
                     (G)  a health care provider; [or]
                     (H)  a group representing any of the entities
  described by Paragraphs (A) through (G); or
                     (I)  any other independent review organization in
  the state;
               (5)  the percentage of the applicant's revenues that
  are anticipated to be derived from independent reviews conducted
  under Subchapter I, Chapter 4201;
               (6)  a description of:
                     (A)  the areas of expertise of the physicians or
  other  health care providers making review determinations for the
  applicant;
                     (B)  the procedures used by the applicant to
  verify physician and provider credentials, including the computer
  processes, electronic databases, and records, if any, used; and
                     (C)  the software used by the credentialing
  manager for managing the processes, databases, and records
  described by Paragraph (B); [and]
               (7)  the procedures to be used by the applicant in
  making independent review determinations under Subchapter I,
  Chapter 4201; and
               (8)  a description of the applicant's use of
  communications, records, and computer processes to manage the
  independent review process.
         (b)  The commissioner shall establish certifications for
  independent review of health care services provided to persons
  eligible for workers' compensation medical benefits and other
  health care services after considering accreditation, if any, by a
  nationally recognized accrediting organization that imposes
  requirements for accreditation that are the same as, substantially
  similar to, or more stringent than the department's requirements
  for accreditation.
         (c)  The department shall make available to applicants
  applications for certification to review health care services
  provided to persons eligible for workers' compensation medical
  benefits and other health care services.
         (d)  The commissioner shall require that each officer of the
  applicant and each owner or shareholder of the applicant or, if the
  purchaser is publicly held, each owner or shareholder described by
  Subsection (a)(1) submit a complete and legible set of fingerprints
  to the department for the purpose of obtaining criminal history
  record information from the Department of Public Safety and the
  Federal Bureau of Investigation. The department shall conduct a
  criminal history check of each applicant using information:
               (1)  provided under this section; and
               (2)  made available to the department by the Department
  of Public Safety, the Federal Bureau of Investigation, and any
  other criminal justice agency under Chapter 411, Government Code.
         (e)  An application for certification for review of health
  care services must require an organization that is accredited by an
  organization described by Subsection (b) to provide the department
  evidence of the accreditation. The commissioner shall consider the
  evidence if the accrediting organization published and made
  available to the commissioner the organization's requirements for
  and methods used in the accreditation process.  An independent
  review organization that is accredited by an organization described
  by Subsection (b) may request that the department expedite the
  application process.
         (f)  A certified independent review organization that
  becomes accredited by an organization described by Subsection (b)
  may provide evidence of that accreditation to the department that
  shall be maintained in the department's file related to the
  independent review organization's certification.
         (g)  Certification must be renewed biennially.
         SECTION 4.  Section 4202.005, Insurance Code, is amended to
  read as follows:
         Sec. 4202.005.  PERIODIC REPORTING OF INFORMATION; BIENNIAL
  [ANNUAL] DESIGNATION; UPDATES AND INSPECTION. (a) An independent
  review organization shall biennially [annually] submit the
  information required in an application for certification under
  Section 4202.004.  Anytime there is a material change in the
  information the organization included in the application, the
  organization shall submit updated information to the commissioner.
         (b)  The commissioner shall designate biennially [annually]
  each organization that meets the standards for an independent
  review organization adopted under Section 4202.002.
         (c)  Information regarding a material change must be
  submitted on a form adopted by the commissioner not later than the
  30th day after the date the material change occurs. If the material
  change is a relocation of the organization:
               (1)  the organization must inform the department that
  the location is available for inspection before the date of the
  relocation by the department; and
               (2)  on request of the department, an officer shall
  attend the inspection.
         SECTION 5.  Chapter 4202, Insurance Code, is amended by
  adding Sections 4202.011, 4202.012, 4202.013, and 4202.014 to read
  as follows:
         Sec. 4202.011.  ADVISORY GROUP. (a) The commissioner shall
  establish a group to advise the department and make recommendations
  related to the efficiency of independent review.
         (b)  The commissioner shall appoint as a member of the group
  a department employee to report to the commissioner group
  recommendations and policies. The commissioner shall appoint as
  members of the group individuals who have applied for membership,
  including:
               (1)  two officers of different independent review
  organizations certified under this chapter;
               (2)  an officer of a utilization review organization
  certified under Chapter 4201;
               (3)  an officer or representative of an association of
  physicians with knowledge of and interest in the independent review
  process;
               (4)  an officer or representative of an association of
  insurance carriers with knowledge of and interest in the
  independent review process; and
               (5)  two officers or representatives of different
  patient advocacy associations with knowledge of and interest in the
  independent review process.
         (c)  A recommendation of the advisory group does not bind the
  commissioner.
         (d)  Members of the group serve two-year terms. The
  commissioner shall appoint a replacement member in the event of a
  vacancy to serve the remainder of the unexpired term.
         (e)  The commissioner shall designate one member to serve as
  presiding member of the group. A member may serve more than one
  term as presiding member.
         (f)  The advisory group shall meet annually and otherwise at
  the request of the presiding member or the commissioner. The group
  shall make recommendations at least annually to the commissioner.
         (g)  A member of the group may not receive compensation for
  service as a group member.
         Sec. 4202.012.  REFERRAL. The commissioner by rule shall
  require referral by random assignment of adverse determinations
  under Subchapter I, Chapter 4201, to independent review
  organizations. On referral of a determination, the commissioner
  shall notify:
               (1)  the utilization review agent;
               (2)  the payor;
               (3)  the independent review organization;
               (4)  the patient, as defined by Section 4201.002, or
  the patient's representative; and
               (5)  the provider of record as defined by Section
  4201.002.
         Sec. 4202.013.  PRIMARY OFFICE IN THIS STATE REQUIRED. An
  independent review organization operating under this chapter must
  maintain the organization's primary office in this state.
         Sec. 4202.014.  PREEMPTION. The commissioner shall suspend
  enforcement of any provision of this chapter that the commissioner
  determines to be preempted by 42 U.S.C. Section 300gg-19.
         SECTION 6.  Chapter 4202, Insurance Code, as amended by this
  Act, applies only to an independent review organization that
  applies for an initial certification or renewal certification on or
  after January 1, 2014. An organization certified before that date
  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 7.  This Act takes effect September 1, 2013.
 
 
  ______________________________ ______________________________
     President of the Senate Speaker of the House     
 
 
         I certify that H.B. No. 2645 was passed by the House on May 2,
  2013, by the following vote:  Yeas 145, Nays 2, 2 present, not
  voting; and that the House concurred in Senate amendments to H.B.
  No. 2645 on May 24, 2013, by the following vote:  Yeas 139, Nays 6,
  3 present, not voting.
 
  ______________________________
  Chief Clerk of the House   
 
         I certify that H.B. No. 2645 was passed by the Senate, with
  amendments, on May 22, 2013, by the following vote:  Yeas 30, Nays
  1.
 
  ______________________________
  Secretary of the Senate   
  APPROVED: __________________
                  Date       
   
           __________________
                Governor