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	an independent review organization whose certification was revoked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