PART 1. TEXAS DEPARTMENT OF INSURANCE
CHAPTER 11. HEALTH MAINTENANCE ORGANIZATIONS
The Texas Department of Insurance (TDI) proposes to amend 28 TAC §§11.506, 11.901, 11.902, 11.1611, and 11.1612, concerning health maintenance organizations. Amendments to §11.506 implement Senate Bill 1264, 86th Legislature, 2019. In addition, this proposal changes wording in rule text for consistency with HB 446, which updates terminology used in statute to refer to intellectual disability. Amendments to §11.901 and §11.902 implement House Bill 711, 88th Legislature, 2023, and House Bill 3078, 85th Legislature, 2017. Amendments to §11.1611 implement House Bill 1647, 88th Legislature, 2023; Senate Bill 1003, 88th Legislature, 2023; Senate Bill 1264, 86th Legislature, 2019; and Senate Bill 2476, 88th Legislature, 2023; the amendments also address the court order in Texas Ass'n of Health Plans v. Texas Dept. of Insurance, Travis County District Court No. D-1-GN-18-003846 (October 15, 2020) (TAHP Order), which invalidated §11.1611(d). Amendments to §11.1612 implement Senate Bill 1003, 88th Legislature, 2023.
EXPLANATION. This proposal implements the following legislation:
- HB 711, which prohibits anticompetitive contract provisions;
- HB 1647, which provides protections for certain clinician-administered drugs;
- HB 3078, which transfers regulation of podiatrists to the Texas Department of Licensing and Regulation;
- SB 1003, which expands facility-based provider types that must be listed in provider directories;
- SB 1264, which creates new payment standards and balance billing protections for care provided by non-network facility-based providers in a network facility, diagnostic imaging and laboratory services in connection with care from a network provider, and emergency care; and
- SB 2476, which creates new payment standards and balance billing protections for emergency medical services. The proposed amendments remove payment rules that were invalidated by court order and update provisions for out-of-network care consistent with SB 1264 and SB 2476.
In addition, the proposal makes nonsubstantive changes to (1) add or amend Insurance Code citations for accessibility and consistency with agency rule drafting style preferences; and (2) correct and revise punctuation, capitalization, and grammar to reflect current agency drafting style and plain language preferences.
Details of the proposed amendments follow.
Section 11.506. Mandatory Contractual Provisions: Group, Individual, and Conversion Agreement and Group Certificate The proposed amendments add the title of §11.1611 to subsection (b)(2)(B) to conform to agency style and add the phrase "must be included" to subsection (b)(3) to clarify the meaning and complete the sentence.
Amendments to subsection (b)(2)(C) implement SB 1264 by updating the disclosure related to facility-based physicians and other health care practitioners. The disclosure is updated to clarify that in a network facility, an enrollee cannot be balance billed unless they affirmatively choose the physician or provider and receive a cost estimate.
Amendments to subsection (b)(3)(B)(iii) update rule citations to reflect amendments made to rules in Chapter 26.
An amendment to subsection (b)(13) adds the word "terminate" to the incontestability provision to align with terminology used in parts of Insurance Code Chapters 843 and 1271.
Amendments to subsection (b)(14) update contract requirements related to out-of-network services to remove the reference to reasonably requested documentation, consistent with changes to §11.1611. This will ensure that referral requests are promptly approved. This change does not prevent HMOs from requesting reasonable documentation; rather, it clarifies that the five-day time limit on referrals starts from the time the referral is requested rather than from the time documentation is received.
An amendment to subsection (b)(17) replaces the term "mental retardation" with "intellectual disability" to align with changes made throughout the Insurance Code by HB 446.
An amendment to subsection (b)(19) corrects an error in a citation to the Insurance Code.
Amendments to subsection (b)(24) expand and update the prescription drug coverage requirements by removing the references to formularies and requiring compliance with all of Insurance Code Chapter 1369 rather than solely Subchapter B of that chapter. These changes are needed because substantive coverage requirements exist throughout Chapter 1369, most of which are not contingent on formulary use.
Amendments remove parentheses from references to the titles of statutory citations and revise other punctuation to reflect this change; add apostrophes to denote possession, where appropriate; replace "percent" with "%"; correct verb tenses; update a title to Insurance Code Chapter 1369, Subchapter B; remove the title to a redundant Insurance Code citation; and otherwise align rule text with current agency drafting style and plain language preferences.
Section 11.901. Required and Prohibited Provisions. The proposed amendments to §11.901(a) remove the incorrect use of "of this title" in reference to an Insurance Code citation.
The amendments also delete a duplicative citation to an Insurance Code title in subsection (b)(3) and update the mailing address for the Managed Care Quality Assurance Office in subsection (b)(4). An amendment to subsection (b)(11) corrects the title of Insurance Code §1661.005 to read "Refund of Overpayment" instead of "Refunds of Overpayments."
An amendment to subsection (c)(1)(A) adds a reference to ICD-11-CM.
Amendments to subsection (e) replace "the effective date of this subsection" with "August 1, 2017," to insert the effective date of the last adoption of amendments to the section.
New subsection (g) is added to implement HB 711, including the prohibitions in Insurance Code §1458.101 on contractual anti-steering, anti-tiering, most favored nation, and gag clauses.
Amendments also remove parentheses from statutory citations for uniformity in formatting, add an apostrophe to denote possession, and revise unnecessary use of the words "hereby" and "hereafter."
Section 11.902. Prohibited Actions. A proposed amendment designates subsection (a) to contain existing paragraphs (1) - (7), to allow for the addition of a subsection (b) to the section. An amendment to paragraph (4) replaces the outdated reference to the "Texas State Board of Podiatric Medical Examiners" with the "Texas Department of Licensing and Regulation," reflecting the enactment of HB 3078 in 2017.
Proposed amendments implement HB 711 by adding new subsection (b). The new subsection prohibits an HMO from using steering or a tiered network to encourage an enrollee to obtain a health care service from a particular provider, unless it is done for the primary benefit of the enrollee or contract holder in compliance with the requirements of the Insurance Code, including Insurance Code §1458.101(i). Proposed new subsection (b) also defines "steering" and "tiered network" according to HB 711, clarifies that fiduciary duty violations will be determined by TDI on the basis of an assessment of the HMO's conduct, and provides non-exhaustive examples of conduct that would violate the fiduciary duty under Insurance Code §1458.101(i).
Amendments remove parentheses from the titles of statutory citations to reflect current agency drafting style.
Section 11.1611. Out-of-Network Claims; Non-Network Physicians and Providers. To implement SB 1264 and SB 2476, proposed amendments update requirements for out-of-network claims. An amendment replaces existing subsection (a) with a new subsection (a) containing text with references to out-of-network payment standards in Insurance Code Chapter 1271.
An amendment also replaces existing subsection (b) with a new subsection (b) that provides requirements for an HMO to facilitate an enrollee's access to care in circumstances when medically necessary covered services are not reasonably available through a network physician or provider. New subsection (b)(1) requires an HMO to facilitate the enrollee's access to care and follow access plan procedures. Subsection (b)(2) requires an HMO to inform the enrollee of their rights to receive out-of-network care under the in-network benefit level and to advise the consumer to contact the HMO if they receive a balance bill. Subsection (b)(3) addresses additional disclosure requirements for an enrollee with an out-of-network benefit under a point-of-service plan.
Proposed amendments to subsection (c) clarify that an HMO must approve a network gap exception and facilitate access to care within the time appropriate to the circumstances, not to exceed five business days. The amendments to subsection (c)(1) specify that an HMO must allow an enrollee to use a non-network physician or provider that has the necessary expertise, is reasonably available, and that the enrollee can use without being liable for additional cost-sharing.
Proposed amendments strike existing subsection (d), which was invalidated by court order in the 2020 TAHP Order, and redesignate subsequent subsections. The subsections that follow it are redesignated to reflect the removal of existing subsection (d).
Redesignated subsection (d) is amended to remove reference to subsections (a) - (c) and to revise a reference to the Consumer Protection Section to instead reference the TDI toll-free consumer information help line.
Proposed amendments to redesignated subsection (e) remove existing paragraph (1), relating to the methodology for usual and customary charges, because HMOs are required to make payments based on the usual and customary rate, rather than the usual and customary charge. Subsequent paragraphs under subsection (e) are renumbered as appropriate to reflect the change.
An amendment adds new subsection (f) to implement HB 1647 by referencing coverage requirements for clinician-administered drugs in Insurance Code Chapter 1369, Subchapter W, as added by HB 1647. If a clinician-administered drug is provided by a non-network provider and eligible to be covered under the plan's in-network benefit, the HMO must issue payment consistent with subsection (d).
Amendments update grammar and punctuation throughout to reflect current agency drafting style and plain language preferences.
Section 11.1612. Mandatory Disclosure Requirements. Proposed amendments implement SB 1003 and SB 1264, remove duplicative or unnecessary requirements, and make nonsubstantive formatting and grammatical changes to improve readability.
Amendments to subsection (a) broaden the provisions to apply to all physician and provider directories, rather than only online directories. Some requirements that were previously required under subsection (h) are moved into subsection (a). Paragraph (1) is expanded to require a directory to indicate whether physicians and providers are accepting new patients, which was previously required under subsection (h)(2). Paragraph (2) is added to require a directory to explain limitations of accessibility and referrals to specialists, including those imposed by a limited provider network, which was previously required under subsection (h)(5). Paragraph (3) is added to require the directory to be dated and provided in at least 10-point type, which was previously required in subsection (h)(9) and (10). Subsequent paragraphs are renumbered as appropriate to reflect the addition of new paragraphs. Paragraph (8) is added to require the directory to include an email address and toll-free telephone number through which enrollees may notify an HMO of inaccurate information in the listing, which was previously required in subsection (h)(3).
An amendment to subsection (b) revises the wording in the last sentence for clarity.
Amendments to subsection (c) replace the word "font" with "type" and replace Figure: 28 TAC §11.1612(c). New Figure: 28 TAC §11.1612(c) reflects updated consumer protections enacted under SB 1264 and SB 2476 and uses plain language to improve consumer understanding of the notice.
Amendments in subsection (d) revise text to provide plainer language.
Amendments to subsection (e) modify formatting and punctuation; clarify that information may be provided for each service area or county; and remove existing paragraph (2), which was duplicative of requirements in existing paragraph (1). Because of the removal of paragraph (2), the text of existing paragraph (1) is combined with the text following subsection (e), and the subparagraphs under existing paragraph (1) are redesignated as paragraphs.
Amendments to subsection (f) provide plainer language by removing or revising wording that is repetitive or does not align with agency style.
Subsection (g) is amended to add a requirement that an HMO make restitution to an enrollee for any additional amount paid by the enrollee as a result of inaccurate information provided by the HMO. Also, existing paragraph (4) is removed, because it is repetitive of paragraph (1).
Subsection (h) is amended to reference, rather than restate, statutory requirements; exclude dental and vision networks, consistent with statute; and remove provisions that apply to all networks and which are added to subsection (a). Paragraph (1) is deleted, because consumers are now protected from balance billing at all network facilities. Paragraph (2) is deleted, because the provision in it is added to subsection (a)(1). Paragraph (3) is also deleted, because the provision in it is added to subsection (a)(8). To reflect the deletion of paragraphs (1) - (3), paragraph (4) is redesignated as paragraph (1). In addition, it is amended to add a reference to providers and a citation to Insurance Code §1451.504. Paragraph (5) is deleted, because the provision in it is added to subsection (a)(2). Paragraph (6) is also deleted, because it is unnecessary to restate the requirements of Insurance Code §1456.003(c). To reflect the renumbering of paragraph (4) and the deletion of paragraphs (5) - (6), paragraph (7) is renumbered as paragraph (2). In addition, it is amended to cite and align with Insurance Code Chapter 1456, use language more consistent with the statute, and replace the term "insurer" with "HMO." Paragraphs (8) and (9) are deleted and moved to subsection (a)(3). Paragraphs (10) and (11), are deleted because they simply unnecessarily restate the requirements of Insurance Code §1451.504(c) and (d).
Amendments to subsection (i) clarify and streamline the required disclosure. This includes removing paragraph (2) and the paragraph (1) designation, and incorporating the remaining text of paragraph (1) into the text that follows subsection (i). A reference to subsection (e)(2) is also revised, to reflect the removal of existing paragraph (2) from subsection (e).
Amendments to subsection (j) clarify that the disclosure of a substantial decrease in availability applies to both physicians and providers, but that the decreases in numbers of physicians and other providers must be assessed separately. The requirement for HMOs to notify TDI by email of contract terminations that do not impact network compliance is removed, with amendments to subsection (j)(2)(B) and removal of subjection (j)(4)(C).
FISCAL NOTE AND LOCAL EMPLOYMENT IMPACT STATEMENT. Rachel Bowden, director of Regulatory Initiatives in the Life and Health Division, has determined that during each year of the first five years the proposed amendments are in effect, there will be no measurable fiscal impact on state and local governments as a result of enforcing or administering the amendments, other than that imposed by statute. Ms. Bowden made this determination because the proposed amendments do not add to or decrease state revenues or expenditures, and because local governments are not involved in enforcing or complying with the proposed amendments.
Ms. Bowden does not anticipate any measurable effect on local employment or the local economy as a result of this proposal.
PUBLIC BENEFIT AND COST NOTE. For each year of the first five years the proposed amendments are in effect, Ms. Bowden expects that administering the proposed amendments will have the public benefit of ensuring that TDI's rules implement House Bills 711, 1647, and 3078; Senate Bills 1003, 2476, and 1264; and the TAHP Order.
Ms. Bowden expects that the proposed amendments will not increase the cost of compliance for those required to comply with the rules. Any costs for those required to comply with the proposed amendments are attributable to House Bills 711, 1647, and 3078, and Senate Bills 1003, 2476, and 1264 because the proposed amendments do not impose requirements beyond those in statute.
ECONOMIC IMPACT STATEMENT AND REGULATORY FLEXIBILITY ANALYSIS. TDI has determined that the proposed amendments will not have an adverse economic effect on small or micro businesses, or on rural communities. As a result, and in accordance with Government Code §2006.002(c), TDI is not required to prepare a regulatory flexibility analysis.
EXAMINATION OF COSTS UNDER GOVERNMENT CODE §2001.0045. TDI has determined that this proposal does not impose a possible cost on regulated persons. Therefore, no additional rule amendments are required under Government Code §2001.0045. In addition, the proposal is necessary to implement legislation, which is an exception under §2001.0045(c).
GOVERNMENT GROWTH IMPACT STATEMENT. TDI has determined that for each year of the first five years that the proposed amendments are in effect, the proposed rule:
- will not create or eliminate a government program;
- will not require the creation of new employee positions or the elimination of existing employee positions;
- will not require an increase or decrease in future legislative appropriations to the agency;
- will not require an increase or decrease in fees paid to the agency;
- will not create a new regulation;
- will expand, limit, or repeal an existing regulation;
- will not increase or decrease the number of individuals subject to the rule's applicability; and
- will not positively or adversely affect the Texas economy.
TAKINGS IMPACT ASSESSMENT. TDI has determined that no private real property interests are affected by this proposal and that this proposal does not restrict or limit an owner's right to property that would otherwise exist in the absence of government action. As a result, this proposal does not constitute a taking or require a takings impact assessment under Government Code §2007.043.
REQUEST FOR PUBLIC COMMENT. TDI will consider any written comments on the proposal that are received by TDI no later than 5:00 p.m., central time, on October 21, 2024. Send your comments to ChiefClerk@tdi.texas.gov or to the Office of the Chief Clerk, MC: GC-CCO, Texas Department of Insurance, P.O. Box 12030, Austin, Texas 78711-2030.
To request a public hearing on the proposal, submit a request before the end of the comment period to ChiefClerk@tdi.texas.gov or to the Office of the Chief Clerk, MC: GC-CCO, Texas Department of Insurance, P.O. Box 12030, Austin, Texas 78711-2030. The request for public hearing must be separate from any comments and received by TDI no later than 5:00 p.m., central time, on October 21, 2024. If a public hearing is held, TDI will consider written and oral comments presented at the hearing.
SUBCHAPTER F. EVIDENCE OF COVERAGE
STATUTORY AUTHORITY. TDI proposes to amend §11.506 under Insurance Code §§843.151, 1271.152, 1456.006, and 36.001.
Insurance Code §843.151 authorizes the commissioner to adopt reasonable rules to implement various sections of the Insurance Code related to HMOs and ensure adequate access to health care services, including establishing physician-to-patient ratios, mileage requirements, travel time, and appointment waiting times.
Insurance Code §1271.152 authorizes the commissioner to adopt minimum standards relating to basic health care services.
Insurance Code §1456.006 authorizes the commissioner to prescribe disclosure requirements related to out-of-network care from facility-based physicians and providers.
Insurance Code §36.001 provides that the commissioner may adopt any rules necessary and appropriate to implement the powers and duties of TDI under the Insurance Code and other laws of this state.
CROSS-REFERENCE TO STATUTE. Section 11.506 implements Insurance Code §§843.151, 1271.152, and 1456.006.
§11.506.Mandatory Contractual Provisions: Group, Individual, and Conversion Agreement and Group Certificate.
(a) Each enrollee residing in Texas is entitled to an evidence of coverage under a health care plan. An HMO may deliver the evidence of coverage electronically but must provide a paper copy on request.
(b) Each group, individual, and conversion contract and group certificate must contain the following provisions:
(1) Face page. Where applicable, the name, address,
website address, and phone number of the HMO must appear. The toll-free
number referred to in Insurance Code §521.102, [(]concerning
Health Maintenance Organization or Insurer Toll-Free Number for Information
and Complaints,[)] must appear on the face page.
(A) The face page of an agreement is the first page that contains any written material.
(B) If the agreements or certificates are in booklet form, the first page inside the cover is considered the face page.
(C) The HMO must provide the information regarding
the toll-free number referred to in Insurance Code Chapter 521, Subchapter
C, [(]concerning Health Maintenance Organization or Insurer
Toll-Free Number for Information and Complaints[)], in
compliance with §1.601 of this title (relating to Notice of Toll-Free
Telephone Numbers and Information and Complaint Procedures).
(2) Benefits. A schedule of all health care services that are available to enrollees under the basic, limited, or single service plan must be included, together with any copayments or deductibles and a description of where and how to obtain services. An HMO may use a variable copayment or deductible schedule. The schedule must clearly indicate the benefit to which it applies.
(A) Copayments. An HMO may require copayments to supplement payment for health care services.
(i) Each basic health care service HMO may establish
one or more reasonable copayment options. A reasonable copayment option
may not exceed 50% [50 percent] of the total
cost of services provided.
(ii) A basic health care service HMO may not impose
copayment charges on any enrollee in any calendar year, when the copayments
made by the enrollee in that calendar year total 200% [200
percent] of the total annual premium cost which is required
to be paid by or on behalf of that enrollee. This limitation applies
only if the enrollee demonstrates that copayments in that amount have
been paid in that year.
(iii) The HMO must state the copayment, the limit on enrollee copayments, and the enrollee reporting responsibility in the group, individual, or conversion agreement and group certificate.
(B) Deductibles. A deductible must be for a specific
dollar amount of the cost of the basic, limited, or single health
care service. Except for a consumer choice benefit plan authorized
by Insurance Code Chapter 1507, [(]concerning
Consumer Choice of Benefits Plans[)], an HMO may not charge
a deductible for services received in the HMO's delivery network.
Except in cases involving emergency care and services that are not
available in the HMO's delivery network, as described in §11.1611 of this title (relating to Out-of-Network Claims; Non-Network Physicians
and Providers), an HMO may charge an out-of-network deductible
for services performed out of the HMO's service area or for services
performed by a physician or provider who is not in the HMO's delivery network.
(C) Facility-based physicians or other health
care practitioners [Physicians]. In compliance with
Insurance Code §1456.003, [(]concerning
Required Disclosure: Health Benefit Plan[)], a statement that:
(i) a facility-based physician or other health care practitioner may not be included in the health benefit plan's provider network;
(ii) unless the enrollee affirmatively chooses
a non-network facility-based physician or other health care practitioner
and receives a cost estimate, a [the] non-network
facility-based physician or other health care practitioner in
a network facility may not balance bill the enrollee
for amounts not paid by the health benefit plan; and
(iii) if the enrollee receives a balance bill, the enrollee should contact the HMO.
(D) Immunizations. An HMO may not charge a copayment
or deductible for immunizations as described in Insurance Code Chapter
1367, Subchapter B, [(]concerning Childhood Immunizations,[)] for a child from birth through the date the
child is 6 [six] years of age, except that a
small employer health benefit plan as defined by Insurance Code §1501.002, [(]concerning Definitions,[)]
that covers the immunizations may charge a copayment, and a consumer
choice benefit plan under Insurance Code Chapter 1507 may charge a
copayment and a deductible.
(3) Cancellation and nonrenewal. A statement must
be included that specifies [specifying] the following
grounds for cancellation and nonrenewal of coverage and the minimum
notice period that will apply.
(A) Unless otherwise prohibited by law, an HMO may cancel coverage of a subscriber in a group and the subscriber's enrolled dependents under circumstances described in this subparagraph, so long as the circumstances do not include health status-related factors:
(i) for nonpayment of amounts due under the contract,
after not less than 30-days' [30-days] written
notice, except no additional written notice will be required for failure
to pay premium;
(ii) after not less than 15-days' [15-days
] written notice, in the case of fraud or intentional misrepresentation
of a material fact, except as described in paragraph (13) of this subsection;
(iii) after not less than 15-days' [15-days
] written notice, in the case of fraud in the use of services or facilities;
(iv) immediately, subject to continuation of coverage and conversion privilege provisions, if applicable, for failure to meet eligibility requirements other than the requirement that the subscriber reside, live, or work in the service area; and
(v) after not less than 30-days' [30-days]
written notice, where the subscriber does not reside, live, or work
in the service area of the HMO or area for which the HMO is authorized
to do business, but only if the HMO terminates coverage uniformly
without regard to any health status-related factor of enrollees, except
that an HMO may not cancel coverage for a child who is the subject
of a medical support order because the child does not reside, live,
or work in the service area.
(B) An HMO may cancel a group under circumstances described below, unless otherwise prohibited by law:
(i) for nonpayment of premium, at the end of the grace period as described in paragraph (12) of this subsection;
(ii) in the case of fraud on the part of the group,
after 15-days' [15-days] written notice;
(iii) for employer groups, for violation of participation
or contribution rules, under §26.8[(h)] of this title
(relating to Guaranteed Issue; Contribution and Participation Requirements)
and §26.303[(j)] of this title (relating to Coverage Requirements);
(iv) for employer groups, under §26.16 of this title (relating to Refusal to Renew and Application to Reenter Small Employer Market) and §26.309 of this title (relating to Refusal to Renew and Application to Reenter Large Employer Market) on discontinuance of:
(I) each of its small or large employer coverages; or
(II) a particular type of small or large employer coverage;
(v) where no enrollee resides, lives, or works in the
service area of the HMO or area for which the HMO is authorized to
do business, but only if the coverage is terminated uniformly without
regard to any health-status-related [health status-related
] factor of enrollees after 30-days' [30-days]
written notice; and
(vi) if membership of an employer in an association
ceases, and if coverage is terminated uniformly without regard to
the health status of an enrollee, after 30-days' [30-days
] written notice.
(C)
A group or individual contract holder may cancel
a contract in the case of a material change by the HMO to any provisions
required to be disclosed to contract holders or enrollees under this
chapter or other law after not less than 30-days' [30-days
] written notice to the HMO.
(D) An HMO may cancel an individual contract under circumstances described below, unless otherwise prohibited by law:
(i) for nonpayment of premiums under the terms of the contract, including any timeliness provisions, without written notice, subject to paragraph (12) of this subsection;
(ii) in the case of fraud or intentional material misrepresentation,
except as described in paragraph (13) of this subsection, after not
less than 15-days' [15-days] written notice;
(iii) in the case of fraud in the use of services or
facilities, after not less than 15-days' [15-days]
written notice;
(iv) after not less than 30-days' [30-days
] written notice where the subscriber does not reside, live,
or work in the service area of the HMO or area in which the HMO is
authorized to do business, but only if coverage is terminated uniformly
without regard to any health-status-related [health
status-related] factor of enrollees, except that an HMO may
not cancel coverage for a child who is the subject of a medical support
order because the child does not reside, live, or work in the service area;
(v) in case of termination by discontinuance of a particular
type of individual coverage by the HMO in that service area, but only
if coverage is discontinued uniformly without regard to health-status-related
[health status-related] factors of enrollees and
dependents of enrollees who may become eligible for coverage, after 90-days' [90-days] written notice, in which case
the HMO must offer to each enrollee on a guaranteed-issue basis any
other individual basic health care coverage offered by the HMO in
that service area; and
(vi) in case of termination by discontinuance of all
individual basic health care coverage by the HMO in that service area,
but only if coverage is discontinued uniformly without regard to health
status-related factors of enrollees and dependents of enrollees who
may become eligible for coverage, after 180-days' [180-days
] written notice to the commissioner and the enrollees, in which
case the HMO may not re-enter the individual market in that service
area for five years beginning on the date of discontinuance of [at] the last coverage not renewed.
(4) Claim payment procedure. A provision that sets
forth the procedure for paying claims, including any time frame for
payment of claims that must comply with Insurance Code Chapter 542,
Subchapter B, [(]concerning Prompt Payment of Claims[)];
Insurance Code §1271.005, [(]concerning
Applicability of Other Law[)]; and rules adopted under
these Insurance Code provisions.
(5) Complaint and appeal procedures. A description
of the HMO's complaint and appeal process available to complainants,
including internal adverse determination appeal and independent review
procedures under Insurance Code Chapter 4201, [(]concerning
Utilization Review Agents,[)] and Chapter 19,
Subchapter R, of this title (relating to Utilization Reviews for Health
Care Provided Under a Health Benefit Plan or Health Insurance Policy).
(6) Definitions. A provision defining any words in the evidence of coverage that have other than the usual meaning. Definitions must be in alphabetical order.
(7) Effective date. A statement of the effective date requirements of various kinds of enrollees.
(8) Eligibility. A statement of the eligibility requirements for membership.
(A) The statement must provide that the subscriber must reside, live, or work in the service area and the legal residence of any enrolled dependents must be the same as the subscriber, or the subscriber must reside, live, or work in the service area and the residence of any enrolled dependents must be:
(i) in the service area with the person having temporary or permanent conservatorship or guardianship of the dependents, including adoptees or children who have become the subject of a suit for adoption by the enrollee, where the subscriber has legal responsibility for the health care of the dependents;
(ii) in the service area under other circumstances where the subscriber is legally responsible for the health care of the dependents;
(iii) in the service area with the subscriber's spouse; or
(iv) anywhere in the United States for a child whose coverage under a plan is required by a medical support order.
(B) The statement must provide the conditions under which dependent enrollees may be added to those originally covered.
(C) The statement must describe any limiting age for subscriber and dependents.
(D) The statement must provide a clear statement regarding the coverage of newborn children.
(i) No evidence of coverage may contain any provision excluding or limiting coverage for a newborn child of the subscriber or the subscriber's spouse.
(ii) Congenital defects must be treated the same as any other illness or injury for which coverage is provided.
(iii) The HMO may require that the subscriber notify the HMO during the initial 31 days after the birth of the child and pay any premium required to continue coverage for the newborn child.
(iv) The HMO may not require that a newborn child receive health care services only from network physicians or providers after the birth if the newborn child is born outside the HMO service area due to an emergency or born in a non-network facility to a mother who does not have HMO coverage, but may require that the newborn be transferred to a network facility at the HMO's expense and, if applicable, to a network provider when the transfer is medically appropriate as determined by the newborn's treating physician.
(v) A newborn child of the subscriber or subscriber's spouse is entitled to coverage during the initial 31 days following birth. The HMO must allow an enrollee 31 days after the birth of the child to notify the HMO, either verbally or in writing, of the addition of the newborn as a covered dependent.
(E) The statement must include a clear statement regarding
the coverage of the enrollee's grandchildren that complies with Insurance
Code §1201.062, [(]concerning Coverage
for Certain Children in Individual or Group Policy or in Plan or Program,[)] and §1271.006, [(]concerning
Benefits to Dependent Child and Grandchild[)].
(9) Emergency services. A description of how to obtain services in emergency situations including:
(A) what to do in case of an emergency occurring outside or inside the service area;
(B) a statement of any restrictions or limitations on out-of-area services;
(C) a statement that the HMO will provide for any medical screening examination or other evaluation required by state or federal law that is necessary to determine whether an emergency medical condition exists in a hospital emergency facility or comparable facility;
(D) a statement that necessary emergency care services will be provided, including the treatment and stabilization of an emergency medical condition;
(E) a statement that where stabilization of an emergency condition originated in a hospital emergency facility or in a comparable facility, as defined in subparagraph (F) of this paragraph, treatment subject to stabilization must be provided to enrollees as approved by the HMO, provided that:
(i) the HMO must approve or deny coverage of poststabilization care as requested by a treating physician or provider; and
(ii) the HMO must approve or deny the treatment within the time appropriate to the circumstances relating to the delivery of the services and the condition of the patient, but in no case may approval or denial exceed one hour from the time of the request; and
(F) for purposes of this paragraph, "comparable facility" includes the following:
(i) any stationary or mobile facility, including, but
not limited to, Level V Trauma Facilities and Rural Health Clinics
that have licensed or certified or both licensed and certified personnel
and equipment to provide Advanced Cardiac Life Support consistent
with American Heart Association and American Trauma Society standards
of care and a free-standing emergency medical care facility as that
term is defined in Insurance Code §843.002, [(]concerning
Definitions[)];
(ii) for purposes of emergency care related to mental illness, a mental health facility that can provide 24-hour residential and psychiatric services and that is:
(I) a facility operated by the Texas Department of State Health Services;
(II) a private mental hospital licensed by the Texas Department of State Health Services;
(III) a community center as defined by Texas Health
and Safety Code §534.001, [(]concerning
Establishment[)];
(IV) a facility operated by a community center or other entity the Texas Department of State Health Services designates to provide mental health services;
(V) an identifiable part of a general hospital in which diagnosis, treatment, and care for persons with mental illness is provided and that is licensed by the Texas Department of State Health Services; or
(VI) a hospital operated by a federal agency.
(10) Entire contract, amendments. A provision stating that the form, applications, if any, and any attachments constitute the entire contract between the parties and that, to be valid, any change in the form must be approved by an officer of the HMO and attached to the affected form and that no agent has the authority to change the form or waive any of the provisions.
(11) Exclusions and limitations. A provision setting forth any exclusions and limitations on basic, limited, or single health care services.
(12) Grace period. A provision for a grace period of at least 30 days for the payment of any premium due after the first premium payment during which the coverage remains in effect. An HMO may add a charge to the premium for late payments received within the grace period.
(A) If payment is not received within the 30 days, coverage may be canceled after the 30th day and the terminated members may be held liable for the cost of services received during the grace period, if this requirement is disclosed in the agreement.
(B) Despite subparagraph (A) of this paragraph, provisions
regarding the liability of group contract holder for an enrollee's
premiums must comply with Insurance Code §843.210, [(]concerning Terms of Enrollee Eligibility,[)]
and §21.4003 of this title (relating to Group Policyholder, Group
Contract Holder, and Carrier Premium Payment and Coverage Obligations).
(13) Incontestability:
(A) All statements made by the subscriber on the enrollment application are considered representations and not warranties. The statements are considered truthful and made to the best of the subscriber's knowledge and belief. A statement may not be used in a contest to void, cancel, terminate, or nonrenew an enrollee's coverage or reduce benefits unless:
(i) it is in a written enrollment application signed by the subscriber; and
(ii) a signed copy of the enrollment application is or has been furnished to the subscriber or the subscriber's personal representative.
(B) An individual contract or group certificate may only be contested because of fraud or intentional misrepresentation of material fact made on the enrollment application. For small employer coverage, the misrepresentation must be other than a misrepresentation related to health status.
(C) For a group contract or certificate, the HMO may
increase its premium to the appropriate level if the HMO determines
that the subscriber made a material misrepresentation of health status
on the application. The HMO must provide the contract holder 31-days'
[31-days] prior written notice of any premium rate change.
(14) Out-of-network services. Each contract between
an HMO and a contract holder must provide that if medically necessary
covered services are not available through network physicians or providers,
the HMO must, on the request of a network physician or provider, within
the time appropriate to the circumstances relating to the delivery
of the services and the condition of the patient, but in no event
to exceed five business days [after receipt of reasonably requested
documentation], allow a referral to a non-network physician
or provider and must fully reimburse the non-network provider at the
usual and customary or an agreed rate.
(A) For purposes of determining whether medically necessary covered services are available through network physicians or providers, the HMO must offer its entire network, rather than limited provider networks within the HMO delivery network.
(B) The HMO may not require the enrollee to change primary care physician or specialist providers to receive medically necessary covered services that are not available within the limited provider network.
(C) Each contract must further provide for a review by a specialist of the same or similar specialty as the type of physician or provider to whom a referral is requested before the HMO may deny a referral.
(15) Schedule of charges. A statement that discloses
the HMO's right to change the rate charged with 60-days' [60-days] written notice under Insurance Code §843.2071, [(]concerning Notice of Increase in Charge for Coverage,[)] and Insurance Code Chapter 1254, [(]concerning
Notice of Rate Increase for Group Health and Accident Coverage[)].
(16) Service area. A description and a map of the service
area, with key and scale, that identifies the county, or counties,
or portions of counties to be served, and indicates [indicating
] primary care physicians, hospitals, and emergency care sites.
A ZIP code map and a physician and provider list may be used to meet
the requirement.
(17) Termination due to attaining limiting age. A provision
that a child's attainment of a limiting age does not operate to terminate
the child's coverage while that child is incapable of self-sustaining
employment due to intellectual disability [mental
retardation] or physical disability, and chiefly dependent on
the subscriber for support and maintenance. The HMO may require the
subscriber to furnish proof of incapacity and dependency within 31
days of the child's attainment of the limiting age and subsequently
as required, but not more frequently than annually following the child's
attainment of the limiting age.
(18) Termination due to student dependent's change
in status. A provision regarding coverage of student dependents that
complies with Insurance Code Chapter 1503, [(]concerning
Coverage of Certain Students[)], if applicable.
(19) Conformity with state law. A provision that if
the agreement or certificate contains any provision or part of a provision
not in conformity with Insurance Code Chapter 1271, [(]concerning
Benefits Provided by Health Maintenance Organizations; Evidence
of Coverage; Charges,[)] or other applicable
laws, the remaining provisions and parts of provisions that can be
given effect without the invalid provision or part of a provision
are not rendered invalid but must be construed and applied as if they
were in full compliance with Insurance Code Chapter 1271 and other
applicable laws.
(20) Conformity with Medicare supplement minimum standards and long-term care minimum standards. Each group, individual, and conversion agreement, and group certificate must comply with Chapter 3, Subchapter T, of this title (relating to Minimum Standards for Medicare Supplement Policies), referred to in this paragraph as Medicare supplement rules, and Chapter 3, Subchapter Y, of this title (relating to Standards for Long-Term Care Insurance, Non-Partnership and Partnership Long-Term Care Insurance Coverage Under Individual and Group Policies and Annuity Contracts, and Life Insurance Policies That Provide Long-Term Care Benefits Within the Policy), referred to in this paragraph as long-term care rules, where applicable. If there is a conflict between the Medicare supplement or long-term care rules, or both, and the HMO rules, the Medicare supplement or long-term care rules will govern to the exclusion of the conflicting provisions of the HMO rules. Where there is no conflict, an HMO must follow the Medicare supplement, the long-term care rules, and the HMO rules where applicable.
(21) Nonprimary care physician specialist as primary
care physician. A provision that allows enrollees with chronic, disabling,
or life threatening illnesses to apply to the HMO's medical director
to use a nonprimary care physician specialist as a primary care physician
as set out in Insurance Code §1271.201, [(]concerning
Designation of Specialist as Primary Care Physician[)].
(22) Selected obstetrician or gynecologist. Group,
individual, and conversion agreements, and group certificates, except
small employer health benefit plans as defined by Insurance Code §1501.002,
[(concerning Definitions),] must contain a provision that
permits an enrollee to select, in addition to a primary care physician,
an obstetrician or gynecologist to provide health care services within
the scope of the professional specialty practice of a properly credentialed
obstetrician or gynecologist, and subject to the provisions of Insurance
Code Chapter 1451, Subchapter F, [(]concerning Access to
Obstetrical or Gynecological Care[)]. An HMO may not prevent
an enrollee from selecting a family physician, internal medicine physician,
or other qualified physician to provide obstetrical or gynecological care.
(A) An HMO must permit an enrollee who selects an obstetrician or gynecologist direct access to the health care services of the selected obstetrician or gynecologist without a referral by the enrollee's primary care physician or prior authorization or precertification from the HMO.
(B) Access to the health care services of an obstetrician or gynecologist includes:
(i) one well-woman examination per year;
(ii) care related to pregnancy;
(iii) care for all active gynecological conditions; and
(iv) diagnosis, treatment, and referral to a specialist within the HMO's network for any disease or condition within the scope of the selected professional practice of a properly credentialed obstetrician or gynecologist, including treatment of medical conditions concerning breasts.
(C) An HMO may require an enrollee who selects an obstetrician or gynecologist to select the obstetrician or gynecologist from within the limited provider network to which the enrollee's primary care physician belongs.
(D) An HMO may require a selected obstetrician or gynecologist to forward information concerning the medical care of the patient to the primary care physician. However, the HMO may not impose any penalty, financial or otherwise, on the obstetrician or gynecologist for failure to provide this information if the obstetrician or gynecologist has made a reasonable and good-faith effort to provide the information to the primary care physician.
(E) An HMO may limit an enrollee in the plan to self-referral to one participating obstetrician and gynecologist for both gynecological care and obstetrical care. The limitation must not affect the right of the enrollee to select the physician who provides that care.
(F) An HMO must include in its enrollment form a space in which an enrollee may select an obstetrician or gynecologist as set forth in Insurance Code Chapter 1451, Subchapter F. The enrollment form must specify that the enrollee is not required to select an obstetrician or gynecologist, but may instead receive obstetrical or gynecological services from the enrollee's primary care physician or primary care provider. The enrollee must have the right at all times to select or change a selected obstetrician or gynecologist. An HMO may limit an enrollee's request to change an obstetrician or gynecologist to no more than four changes in any 12-month period.
(G) An enrollee who elects to receive obstetrical or gynecological services from a primary care physician (a family physician, internal medicine physician, or other qualified physician) must adhere to the HMO's standard referral protocol when accessing other specialty obstetrical or gynecological services.
(23) Diagnosis of Alzheimer's disease. An HMO that
provides for the treatment of Alzheimer's disease must provide that
a clinical diagnosis of Alzheimer's disease under Insurance Code Chapter
1354, [(]concerning Eligibility for Benefits
for Alzheimer's Disease,[)] by a physician licensed
in this state satisfies any requirement for demonstrable proof of
organic disease.
(24) Drug coverage [Formulary].
An agreement that covers prescription drugs [and uses one or
more formularies] must comply with Insurance Code Chapter 1369, concerning Benefits Related to Prescription Drugs and Devices and
Related Services, [Subchapter B, concerning Coverage of
Prescription Drugs Specified by Drug Formulary] and Chapter
21, Subchapter V, of this title (relating to Pharmacy Benefits),
as applicable.
(25) Inpatient care by nonprimary care physician. If an HMO or limited provider network provides for an enrollee's care by a physician other than the enrollee's primary care physician while the enrollee is in an inpatient facility, for example, hospital or skilled nursing facility, a provision that on admission to the inpatient facility a physician other than the primary care physician may direct and oversee the enrollee's care.
The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.
Filed with the Office of the Secretary of State on September 3, 2024.
TRD-202404151
Jessica Barta
General Counsel
Texas Department of Insurance
Earliest possible date of adoption: October 20, 2024
For further information, please call: (512) 676-6555
STATUTORY AUTHORITY. TDI proposes to amend §11.901 and §11.902 under Insurance Code §§1458.004, 843.151, and 36.001.
Insurance Code §1458.004 authorizes the commissioner to adopt rules to implement Chapter 1458.
Insurance Code §843.151 authorizes the commissioner to adopt reasonable rules to implement various sections of the Insurance Code related to HMOs and ensure adequate access to health care services, including establishing physician-to-patient ratios, mileage requirements, travel time, and appointment waiting times.
Insurance Code §36.001 provides that the commissioner may adopt any rules necessary and appropriate to implement the powers and duties of TDI under the Insurance Code and other laws of this state.
CROSS-REFERENCE TO STATUTE. Section 11.901 and §11.902 implement Insurance Code Chapter 1458.
§11.901.Required and Prohibited Provisions.
(a) Physician and provider contracts, subcontracts,
and arrangements must include provisions regarding a hold-harmless
clause as described in Insurance Code §843.361, [of
this title (]concerning Enrollees Held Harmless[)].
(1) A hold-harmless clause is a provision in a physician or health care provider agreement that obligates the physician or provider to look only to the HMO and not its enrollees for payment for covered services (except as described in the evidence of coverage issued to the enrollee).
(2) In compliance with Insurance Code §843.002, [(]concerning Definitions,[)] relating
to an "uncovered expense," if a physician or health care provider
agreement contains a hold-harmless clause, then the costs of the services
will not be considered uncovered health care expenses in determining
amounts of deposits necessary for insolvency protection under Insurance
Code §843.405, [(]concerning Deposit with Comptroller[)].
(3) The following is an example of an approvable hold-harmless
clause: "(Physician or Provider) [hereby] agrees that in
no event, including, but not limited to, nonpayment by
the HMO, HMO insolvency, or breach of this agreement, may (Physician
or Provider) bill, charge, collect a deposit from, seek compensation,
remuneration, or reimbursement from, or have any recourse against
subscriber, enrollee, or persons other than the HMO acting on their
behalf for services provided under this agreement. This provision
does not prohibit collection of supplemental charges or copayments
made in compliance with the terms of (applicable agreement) between the HMO and subscriber or enrollee. (Physician or Provider)
further agrees that:
(A) this provision will survive the termination of this agreement regardless of the cause giving rise to termination and must be construed to be for the benefit of the HMO subscriber or enrollee; and
(B) this provision supersedes any oral or written contrary
agreement now existing or later [hereafter]
entered into between (Physician or Provider) and subscriber, enrollee,
or persons acting on their behalf. Any modification, addition, or
deletion to the provisions of this clause will be effective on a date
no earlier than 15 days after the commissioner has received written
notice of the proposed changes."
(b) Physician and provider contracts, subcontracts, and arrangements must include provisions:
(1) regarding retaliation as described in Insurance
Code §843.281, [(]concerning Retaliatory
Action Prohibited[)];
(2) regarding continuity of treatment, if applicable,
as described in Insurance Code §843.309, [(]concerning
Contracts with Physicians or Providers:[;] Notice
to Certain Enrollees of Termination of Physician or Provider Participation in Plan,[)] and §843.362, [(]concerning Continuity of Care; Obligation of Health Maintenance
Organization[)];
(3) regarding written notification to enrollees receiving
care from a physician or provider of the termination of that physician
or provider in compliance with Insurance Code §843.308, [(]concerning Notification of Patients of Deselected Physician
or Provider,[)] and §843.309 [(concerning
Contracts With Physicians or Providers: Notice to Certain Enrollees
of Termination of Physician or Provider Participation in a Plan)];
(4) regarding posting of complaint notices in physician
or provider offices as described in Insurance Code §843.283, [(]concerning Posting of Information on Complaint Process Required[)], provided that a representative notice that complies with
this requirement may be obtained from the Managed Care Quality Assurance
Office, MC: LH-MCQA [Mail Code 103-6A], Texas
Department of Insurance, P.O. Box 12030 [149104],
Austin, Texas 78711-2030 [78714-9104], or the
department's website at www.tdi.texas.gov;
(5) regarding indemnification of the HMO as described
in Insurance Code §843.310, [(]concerning
Contracts with Physicians or Providers:[;] Certain
Indemnity Clauses Prohibited[)];
(6) regarding prompt payment of claims as described
in Insurance Code Chapter 542, Subchapter B, [(]concerning
Prompt Payment of Claims[)]; §1271.005, [(]concerning Applicability of Other Law[)]; and all
applicable statutes and rules pertaining to prompt payment of clean
claims, including Insurance Code Chapter 843, Subchapter J, [(]concerning
Payment of Claims to Physicians and Providers[)]; and Chapter
21, Subchapter T, of this title (relating to Submission of Clean Claims)
with respect to payment to the physician or provider for covered services
rendered to enrollees;
(7) regarding capitation, if applicable, as described
in Insurance Code §843.315, [(]concerning
Payment of Capitation; Assignment of Primary Care Physician or Provider,[)] and §843.316, [(]concerning
Alternative Capitation System[)];
(8) regarding selection of a primary care physician
or provider, if applicable, as described in Insurance Code §843.203, [(]concerning Selection of Primary Care Physician
or Provider[)];
(9) providing that a podiatrist, practicing within
the scope of the law regulating podiatry, is permitted to furnish
X-rays and non-prefabricated orthotics covered by the evidence of
coverage as described in Insurance Code §843.311, [(
]concerning Contracts with Podiatrists[)];
(10) regarding the requirements of §21.3701 of this title (relating to Electronic Claims Filing Requirements) if the contract requires electronic submission of any information described by that section;
(11) requiring the preferred provider to comply with
all applicable requirements of Insurance Code §1661.005, [(]concerning Refund of Overpayment [Refunds
of Overpayments)]; and
(12) requiring a contracting physician or provider to retain in the contracting physician's or provider's records updated information concerning a patient's other health benefit plan coverage.
(c) Physician and provider contracts and arrangements must include provisions entitling the physician or provider, on request, to all information necessary to determine that the physician or provider is being compensated in compliance with the contract. A physician or provider may make the request for information by any reasonable and verifiable means. The information provided must include a level of detail sufficient to enable a reasonable person with sufficient training, experience, and competence in claims processing to determine the payment to be made under the terms of the contract for covered services rendered to enrollees. The HMO may provide the required information by any reasonable method through which the physician or provider can access the information, including email, computer disks, or other electronic storage and transfer technology, paper, or access to an electronic database. Amendments, revisions, or substitutions of any information provided under this paragraph must comply with paragraph (4) of this subsection. The HMO must provide the fee schedules and other required information by the 30th day after the date the HMO receives the physician's or provider's request.
(1) The information provided must include a physician-specific or provider-specific summary and explanation of all payment and reimbursement methodologies that will be used to pay claims submitted by a physician or provider, including at a minimum, the:
(A) fee schedule, including, if applicable, CPT, HCPCS, CDT, ICD-9-CM, ICD-10-CM, ICD-11-CM, and successor codes, and modifiers:
(i) by which the HMO will calculate and pay all claims for covered services submitted by or on behalf of the contracting physician or provider; or
(ii) that pertains to the range of health care services
reasonably expected to be delivered under the contract by that contracting
physician or provider on a routine basis, along with a toll-free number
or electronic address through which the contracting physician or provider
may request the fee schedules applicable to any covered services that
the physician or provider intends to provide to an enrollee, and any
other information required by this subsection[,] that pertains
to the service for which the fee schedule is being requested if the
HMO has not previously provided that information to the physician
or provider;
(B) all applicable coding methodologies;
(C) all applicable bundling processes, which must be consistent with nationally recognized and generally accepted bundling edits and logic;
(D) all applicable downcoding policies;
(E) a description of any other applicable policy or procedure the HMO may use that affects the payment of specific claims submitted by or on behalf of the contracting physician or provider, including recoupment;
(F) any addenda, schedules, exhibits, or policies used by the HMO in carrying out the payment of claims submitted by or on behalf of the contracting physician or provider that are necessary to provide a reasonable understanding of the information provided under this subsection; and
(G) the published product name and version of any software the HMO uses to determine bundling and unbundling of claims.
(2) In the case of a reference to source information outside the control of the HMO as the basis for fee computation, such as state Medicaid or federal Medicare fee schedules, the information the HMO provides must clearly identify the source and explain the procedure by which the physician or provider may readily access the source electronically, telephonically, or as otherwise agreed to by the parties.
(3) Nothing in this subsection may be construed to require an HMO to provide specific information that would violate any applicable copyright law or licensing agreement. However, the HMO must supply, instead of any information withheld on the basis of copyright law or licensing agreement, a summary of the information that will allow a reasonable person with sufficient training, experience, and competence in claims processing to determine the payment to be made under the terms of the contract for covered services that are rendered to enrollees as required by paragraph (1) of this subsection.
(4) No amendment, revision, or substitution of any
of the claims payment procedures or any of the information required
to be provided by this subsection will be effective as to the contracting
physician or provider, unless the HMO provides at least 90-calendar-days'
[90-calendar-days] written notice to the contracting
physician or provider identifying with specificity the amendment,
revision, or substitution. An HMO may not make retroactive changes
to claims payment procedures or any of the information required to
be provided by this subsection. Where a contract specifies mutual
agreement of the parties as the sole mechanism for requiring amendment,
revision, or substitution of the information required by this subsection,
the written notice specified in this section does not supersede the
requirement for mutual agreement.
(5) The HMO must provide the information required by paragraphs (1) - (4) of this subsection to the contracting physician or provider by the 30th day after the date the HMO receives the contracting physician's or provider's request.
(6) A physician or provider receiving information under this subsection may not:
(A) use or disclose the information for any purpose other than:
(i) the physician's or provider's practice
management;[,]
(ii) billing activities;[,]
(iii) other business operations;[,] or
(iv) communications with a governmental agency involved in the regulation of health care or insurance;
(B) use the information to knowingly submit a claim for payment that does not accurately represent the level, type, or amount of services that were actually provided to an enrollee or to misrepresent any aspect of the services; or
(C) rely on information provided under this paragraph about a service as a representation that an enrollee is covered for that service under the terms of the enrollee's evidence of coverage.
(7) A physician or provider that receives information under this subsection may terminate the contract on or before the 30th day after the date the physician or provider receives the information without penalty or discrimination in participation in other health care products or plans. The contract between the HMO and physician or provider must provide for reasonable advance notice to enrollees being treated by the physician or provider before the termination consistent with Insurance Code §843.309.
(8) The provisions of this subsection may not be waived, voided, or nullified by contract.
(d) Physician and provider contracts, subcontracts,
and arrangements must include provisions regarding written notification
of termination to a physician or provider in compliance with Insurance
Code §843.306, [(]concerning Termination
of Participation; Advisory Review Panel,[)]
and §843.307, [(]concerning Expedited Review
Process on Termination or Deselection[)], including provisions
providing that:
(1) the HMO must provide notice of termination by the HMO to the physician or provider at least 90 days before the effective date of the termination;
(2) not later than 30 days following receipt of the written notification of termination, a physician or provider may request a review by the HMO's advisory review panel except in a case involving:
(A) imminent harm to patient health;
(B) an action by a state medical or dental board, another medical or dental licensing board, or another licensing board or government agency that effectively impairs the physician's or provider's ability to practice medicine, dentistry, or another profession; or
(C) fraud or malfeasance; and
(3) within 60 days after receipt of the physician or provider's request for review, the advisory review panel must make its formal recommendation and the HMO must communicate its decision to the physician or provider.
(e) On request by a participating physician or provider,
an HMO must include a provision in the physician's or provider's contract
providing that the HMO and the HMO's clearinghouse may not refuse
to process or pay an electronically submitted clean claim because
the claim is submitted together with or in a batch submission with
a claim that is deficient. As used in this section, the term "batch
submission" means "a group of electronic claims submitted for processing
at the same time within a Health Insurance Portability and Accountability
Act (HIPAA) standard ASC X12N 837 Transaction Set and identified by
a batch control number." This subsection applies to a contract entered
into or renewed on or after August 1, 2017 [the effective
date of this subsection]. For a contract entered into or renewed
before August 1, 2017 [the effective date of this
subsection], the law and regulations in effect at the time the
contract was entered or renewed, whichever is later, governs.
(f) A contract between an HMO and a dentist may not
limit the fee the dentist may charge for a service that is not a covered
service under Insurance Code §843.3115, [(]concerning
Contracts with Dentists[)].
(g) A contract between an HMO and a provider, as that term is defined in Insurance Code §1458.001, concerning General Definitions, must comply with Insurance Code §1458.101, concerning Contract Requirements, to the extent applicable.
§11.902.Prohibited Actions.
(a) An HMO may not:
(1) require a physician to use a hospitalist for a
hospitalized patient by contract under Insurance Code §843.320,
[(]concerning Use of
Hospitalist[)];
(2) refuse to contract with a nurse first assistant
to be part of a provider network or refuse to reimburse a nurse first
assistant under Insurance Code §843.3045, [(]concerning
Nurse First Assistant[)];
(3) require a physician to use the services of a nurse
first assistant as defined by Occupations Code §301.354, [(]concerning Nurse First Assistants; Assisting at Surgery by
Other Nurses[)];
(4) refuse to contract with a podiatrist licensed by
the Texas Department of Licensing and Regulation [Texas
State Board of Podiatric Medical Examiners] who joins the professional
practice of a contracted physician or provider under Insurance Code
§843.319, [(]concerning Certain Required
Contracts[)];
(5) refuse a request to identify a physician assistant
or advanced practice registered nurse as a provider in the HMO's network
under Insurance Code §843.312, [(]concerning
Physician Assistants and Advanced Practice Nurses[)];
(6) employ an optometrist or therapeutic optometrist to provide a vision care product or service, pay an optometrist or therapeutic optometrist for a service not provided, or restrict or limit an optometrist's or therapeutic optometrist's choice of sources or suppliers of services or materials under Insurance Code §1451.156 (concerning Prohibited Conduct); or
(7) contract with a dentist to limit the fee the dentist may charge for a service that is not a covered service under Insurance Code §843.3115, concerning Contracts with Dentists.
(b) An HMO that uses steering or a tiered network to encourage an enrollee to obtain a health care service from a particular provider, as defined under Insurance Code Chapter 1458, concerning Provider Network Contract Arrangements, must do so in a manner that complies with the requirements of the Insurance Code, including the fiduciary duty imposed by Insurance Code §1458.101(i), concerning Contract Requirements, to act only for the primary benefit of the enrollee or contract holder. For the purposes of this section:
(1) "steering" refers to offering incentives to encourage enrollees to use specific providers;
(2) "tiered network" refers to a network of contracted physicians and providers in which an HMO assigns contracted physicians and providers to tiers within the network that are associated with different levels of cost sharing; and
(3) violations of the fiduciary duty under Insurance Code §1458.101(i) will be determined by TDI based on an assessment of the HMO's conduct. Examples of conduct that would violate the HMO's fiduciary duty include, but are not limited to:
(A) using a steering approach or a tiered network to provide a financial incentive as an inducement to limit medically necessary services, to encourage receipt of lower quality medically necessary services or receipt of services, or in violation of state or federal law;
(B) failing to implement reasonable processes to ensure that the contracted physicians and providers that enrollees are encouraged to use within any steering approach or tiered network are not of a materially lower quality as compared with contracted physicians and providers that enrollees are not encouraged to use;
(C) failing to implement reasonable processes to ensure that the HMO does not make materially false statements or representations about a physician's or provider's quality of care or costs; or
(D) failing to use objectively and verifiably accurate and valid information as the basis of any encouragement or incentive under this subsection.
The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.
Filed with the Office of the Secretary of State on September 3, 2024.
TRD-202404152
Jessica Barta
General Counsel
Texas Department of Insurance
Earliest possible date of adoption: October 20, 2024
For further information, please call: (512) 676-6555
STATUTORY AUTHORITY. TDI proposes to amend §11.611 and §11.1612 under Insurance Code §§843.151, 843.2015(c), 1271.152, and §36.001.
Insurance Code §843.151 authorizes the commissioner to adopt reasonable rules to implement various sections of the Insurance Code related to HMOs and ensure adequate access to healthcare services, including establishing physician-to-patient ratios, mileage requirements, travel time, and appointment waiting times.
Insurance Code §843.2015(c) authorizes the commissioner to adopt rules necessary to implement the requirements for an HMO's online listing of physicians and providers, including rules that govern the form and content of information that must be provided under statute.
Insurance Code §1271.152 authorizes the commissioner to adopt minimum standards relating to basic health care services.
Insurance Code §36.001 provides that the commissioner may adopt any rules necessary and appropriate to implement the powers and duties of TDI under the Insurance Code and other laws of this state.
CROSS-REFERENCE TO STATUTE. Section 11.1611 implements Insurance Code §§1271.055, 1271.152, 1271.155, 1271.157, 1271.158, 1271.159, and 1369.764. Section 11.1612 implements Insurance Code §§843.201, 843.2015, 1451.504, and 1451.505.
§11.1611.Out-of-Network Claims; Non-Network Physicians and Providers.
(a) For an out-of-network claim for which the enrollee is protected from balance billing under Insurance Code Chapter 1271, concerning Benefits Provided by Health Maintenance Organizations; Evidence of Coverage; Charges, the HMO must pay the claim according to that chapter.
[(a) When services are rendered to
an enrollee by a non-network facility-based physician in a network
facility, or in circumstances where an enrollee is not given the choice
of a network physician or provider, the HMO must fully reimburse the
non-network facility-based physician or provider at the usual and
customary rate as described in subsection (e) of this section or at
an agreed rate.]
(b) For an out-of-network claim that does not fall under subsection (a) of this section, if the services were medically necessary, covered under the plan, and not reasonably available through a network physician or provider, the HMO must pay the claim as required under Insurance Code §1271.055, concerning Out-of-Network Services, and:
(1) facilitate the enrollee's access to care consistent with subsection (c) of this section and the access plan and documented plan procedures specified in §11.1607(j) of this title (relating to Accessibility and Availability Requirements); and
(2) inform the enrollee, as follows:
(A) the out-of-network care that the enrollee receives for the identified services will be covered under the same benefit level as though the services were received from a network physician or provider and will not be subject to any service area limitation;
(B) the enrollee can use a physician or provider recommended by the HMO without being responsible for an amount in excess of the cost-sharing under the plan; and
(C) the enrollee should contact the HMO if they receive a balance bill; and
(3) for an HMO with an out-of-network benefit under a point-of-service plan, in addition to the information in paragraph (2) of this subsection, inform the enrollee of the following:
(A) if the enrollee chooses not to use the physician or provider the HMO recommends, they may choose to use an alternative non-network physician or provider with the understanding that the enrollee will be responsible for any balance bill amount the alternative non-network physician or provider may charge in excess of the HMO's usual and customary rate; and
(B) the amount of the HMO's usual and customary rate for the anticipated services.
[(b) In circumstances where an enrollee
receives emergency care in a non-network facility, the HMO must fully
reimburse a non-network physician or provider for emergency care services
at the usual and customary rate as described in subsection (e) of
this section or at an agreed rate until the enrollee can reasonably
be expected to transfer to a network physician or provider.]
(c) If medically necessary covered services, other than emergency care, are not available through a network physician or provider, on the request of a network physician or provider, and within the time appropriate to the circumstances relating to the delivery of the services and the condition of the patient, but in no event to exceed five business days, the HMO must approve a network gap exception and facilitate access to care by:
(1) processing [approve] a referral
to a non-network physician or provider that:
(A) has expertise in the necessary specialty;
(B) is reasonably available considering the medical condition and location of the enrollee; and
(C) the enrollee may use without being
responsible for an amount in excess of the enrollee's cost-sharing
responsibilities for care from a network physician or provider; [within the time appropriate to the circumstances relating to the delivery
of the services and the condition of the patient, but in no event
to exceed five business days after receipt of reasonably requested
documentation;] and
(2) providing [provide] for a
review by a physician or provider with expertise in the same specialty
as or a specialty similar to the type of health care physician or
provider to whom a referral is requested under paragraph (1) of this
subsection before the HMO may deny the referral.
[(d) An HMO reimbursing a non-network
physician or provider providing services under subsection (a), (b),
or (c) of this section must ensure that the enrollee is held harmless
for any amounts beyond the copayment or other out-of-pocket amounts
that the enrollee would have paid had the HMO network included network
physicians or providers from whom the enrollee could obtain the services.]
(d) [(e)] After determining that
a claim from a non-network physician or provider for services provided
under [subsection (a), (b), or (c) of] this section is
payable, an HMO must issue payment to the non-network physician or
provider at the usual and customary rate or at a rate agreed to by
the HMO and the non-network physician or provider. If the rate was
not agreed to by the physician or provider, the HMO must provide an
explanation of benefits to the enrollee that includes a statement
that the HMO's payment is at least equal to the usual and customary
rate for the service, that the enrollee should notify the HMO if the
non-network physician or provider bills the enrollee for amounts beyond
the amount paid by the HMO, of the procedures for contacting the HMO
on receipt of a bill from the non-network physician or provider for
amount beyond the amount paid by the HMO, and the number for the department's toll-free consumer information help line [Consumer Protection
Section] for complaints regarding payment.
(e) [(f)] Any methodology used
by an HMO to calculate reimbursements of non-network physicians or
providers for covered services not available from network physicians
or providers must comply with the following:
[(1) if based on usual and customary
charges, then the methodology must be based on generally accepted
industry standards and practices for determining the customary billed
charge for a service, and fairly and accurately reflect market rates,
including geographic differences in costs;]
(1) [(2)] if based on claims
data, then the methodology must be based on sufficient data to constitute
a representative and statistically valid sample;
(2) [(3)] any claims data underlying
the calculation must be updated no less than once per year and not
include data that is more than 3 [three] years
old; and
(3) [(4)] the methodology must
be consistent with nationally recognized and generally accepted bundling
edits and logic.
(f) An HMO must cover a clinician-administered drug under the plan's in-network benefit if it meets the criteria under Insurance Code Chapter 1369, Subchapter Q, concerning Clinician-Administered Drugs.
§11.1612.Mandatory Disclosure Requirements.
(a) Physician and provider [Online]
directory. An HMO must develop and maintain a directory of contracting
physicians and health care providers, display the directory on a public
[Internet] website maintained by the HMO, and ensure that
a direct electronic link to the directory is conspicuously displayed
on the electronic summary of benefits and coverage of each plan issued
by the HMO. Any directory provided by the HMO, including an online [The] directory, must:
(1) include the name, address, telephone number, and specialty, if any, of each physician and provider and indicate whether each contracted physician and provider is accepting enrollees as new patients or participates in closed provider networks serving only certain enrollees;
(2) include a statement of limitations of accessibility and referrals to specialists, including any limitations imposed by a limited provider network;
(3) be dated and provided in at least 10-point type;
(4) [(2)] clearly indicate each
health benefit plan issued by the HMO that may provide coverage for
services provided by each physician or provider included in the directory;
(5) when provided electronically, [(3)] be [electronically] searchable by physician
or health care provider name and location;
(6) [(4)] be publicly accessible
without the necessity of providing a password, a username, or personally
identifiable information; [and]
(7) [(5)] be reviewed on an ongoing
basis and corrected or updated, if necessary, not less than once each
month; and
(8) include an email address and a toll-free telephone number through which enrollees may notify the HMO of inaccurate information in the listing.
(b) Identification of limited networks and index. An
HMO must clearly identify limited provider networks within its service
area by providing a separate listing of its limited provider networks
and an alphabetical listing of all the physicians and providers, including
specialists, available in the limited provider network. An HMO must
include an index of the alphabetical listing of all physicians and
providers, including behavioral health providers and substance abuse
treatment providers, if applicable, within the HMO's service area,
and must indicate the limited provider network or networks the
physician or provider belongs to [network(s) to which the
physician or provider belongs] and the page number where the
physician or provider's name can be found.
(c) Notice of rights under an HMO plan required. An
HMO must include the notice specified in Figure: 28 TAC §11.1612(c),
in all evidences of coverage certificates, disclosures of plan terms,
and member handbooks in at least [a] 12-point type
[font]:
Figure: 28 TAC §11.1612(c) (.pdf)
[Figure: 28 TAC §11.1612(c)]
(d) Disclosure concerning access to network physician
and provider listing. An HMO must provide notice to all enrollees
at least annually describing how the enrollee may access a current
listing of all network physicians and providers on a cost-free basis.
The notice must include, at a minimum, information about [concerning] how to obtain a nonelectronic copy of the listing
and a telephone number [through which] enrollees may call
to get help [obtain assistance] during regular business
hours to find available network physicians and providers.
(e) Disclosure concerning network information. An HMO
must provide notice to all enrollees at least annually of[:]
[(1)] information that is updated at least
annually regarding the following network information for each service
area or county, or for the entire state if the plan is
offered on a statewide service-area basis:
(1) [(A)] the number of enrollees
in the service area or region;
(2) [(B)] for each physician
and provider area of practice, including at a minimum internal medicine,
family or general practice, pediatric practitioner practice, obstetrics
and gynecology, anesthesiology, psychiatry, and general surgery, the
number of contracted physicians and providers, an indication of whether
an active access plan under §11.1607 of this title (relating
to Accessibility and Availability Requirements) applies to the services
furnished by that class of physician or provider in the service area
or region, and how the access plan may be obtained or viewed, if applicable; and
(3) [(C)] for hospitals, the
number of contracted hospitals in the service area or region, an indication
of whether an active access plan in compliance with §11.1607
of this title applies to hospital services in that service area or
region, and how the access plan may be obtained or viewed, if
applicable.[;]
[(2) information that is updated at
least annually regarding whether any access plans approved under §11.1607
of this title apply to the plan and that complies with the following:]
[(A) if an access plan applies to facility services or to internal medicine, family or general practice, pediatric practitioner practice, obstetrics and gynecology, anesthesiology, psychiatry, or general surgery services, this must be specifically noted;]
[(B) the information may be categorized by service area or county if the HMO's plan is not offered on a statewide service area basis, or for the entire state if the plan is offered on a statewide service area basis; and]
[(C) the information must identify how to obtain or view the access plan.]
(f) Website disclosures. An HMO must provide information
on its website [regarding the HMO or health benefit plans offered
by the HMO] for use by current or prospective enrollees that
includes [must provide] a:
(1) [web-based] physician and provider listing
for use by current and prospective enrollees; and
(2) [web-based] listing of the state regions,
counties, or three-digit ZIP code areas within the HMO's service area
[area(s)], indicating, as appropriate, for each
region, county, or ZIP code area, as applicable, that the HMO has:
(A) determined that its network meets the network adequacy requirements of this subchapter; or
(B) determined that its network does not meet the network adequacy requirements of this subchapter.
(g) Reliance on physician and provider listing in certain cases. A claim for services rendered by a noncontracted physician or provider must be paid in the same manner as if no contracted physician or provider had been available under §11.1611 of this title (relating to Out-of-Network Claims; Non-Network Physicians and Providers), as applicable, and the HMO must make restitution to the enrollee for any amounts the enrollee demonstrates that they paid the physician or provider above what they would have paid a network physician or provider, if an enrollee demonstrates that:
(1) in obtaining services, the enrollee reasonably relied on a statement that a physician or provider was a contracted physician or provider as specified in:
(A) a physician and provider listing; or
(B) provider information on the HMO's website;
(2) the physician and provider listing or website information was obtained from the HMO, the HMO's website, or the website of a third party designated by the HMO to provide that information for use by its enrollees; and
(3) the physician and provider listing or website information
was obtained not more than 30 days before the date of services.[;
and]
[(4) the physician and provider listing
or website information obtained indicates that the provider is a contracted
provider within the HMO's network.]
(h) Additional listing-specific disclosure requirements.
In all contracted physician and provider listings, including any web-based
postings of information made available by the HMO to provide information
to enrollees about contracted physicians and providers, the HMO must
comply with the [following] requirements in Insurance
Code Chapter 1451, Subchapter K, and paragraphs (1) and (2) of this
subsection. The requirements of this subsection do not apply to provider
listings for a single health care service that provides coverage only
for dental or vision care.[:]
[(1) the physician and provider information
must include a method for enrollees to identify the hospitals that
have contractually agreed with the HMO to facilitate the usage of
contracted providers by exercising good-faith efforts to accommodate
requests from enrollees to use contracted physicians and providers;]
[(2) the physician and provider information must indicate whether each contracted physician and provider is accepting enrollees as new patients or participates in closed provider networks serving only certain enrollees;]
[(3) the physician and provider information must provide an email address and a toll-free telephone number through which enrollees may notify the HMO of inaccurate information in the listing, with specific reference to:]
[(A) information about the physician's or provider's contract status; and]
[(B) whether the physician or provider is accepting new patients;]
(1) [(4)]The [the]
physician and provider information must provide a method by which
enrollees may identify contracted facility-based physicians and
providers able to provide services at contracted facilities,
consistent with Insurance Code §1451.504, concerning Physician
and Health Care Provider Directories.[;]
[(5) the physician and provider information
must include a statement of limitations of accessibility and referrals
to specialists, including any limitations imposed by a limited provider network;]
[(6) as provided in Insurance Code §1456.003(concerning Required Disclosure: Health Benefit Plan), the physician and provider information must give the identity of any health care facilities within the provider network in which facility-based physicians or other health care practitioners do not participate in the health benefit plan's provider network;]
(2) [(7)] The physician
and [the] provider information must specifically
identify any network facility [those facilities]
at which the HMO [insurer] has no contracts
with a class of facility-based physician [or provider],
specifying the applicable type of facility-based physician, consistent
with Insurance Code Chapter 1456, concerning Disclosure of Provider
Status. [provider class;]
[(8) the physician and provider information
must be dated;]
[(9) the physician and provider information must be provided in at least 10-point font;]
[(10) for each health care provider that is a facility included in a listing, the HMO must:]
[(A) create separate headings under the facility name for radiologists, anesthesiologists, pathologists, emergency department physicians, neonatologists, and assistant surgeons;]
[(B) under each heading described by subparagraph (A) of this paragraph, list each preferred facility-based physician practicing in the specialty corresponding with that heading;]
[(C) for the facility and each facility-based physician described by subparagraph (B), clearly indicate each health benefit plan issued by the HMO that may provide coverage for the services provided by that facility, physician, or facility-based physician group;]
[(D) for each facility-based physician described by subparagraph (B) of this paragraph, include the name, street address, telephone number, and any physician group in which the facility-based physician practices; and]
[(E) include the facility in a listing of all facilities and indicate:]
[(i) the name of the facility;]
[(ii) the municipality in which the facility is located or county in which the facility is located if the facility is in the unincorporated area of the county; and]
[(iii) each health benefit plan issued by the HMO that may provide coverage for the services provided by the facility; and]
[(11) the listing must list each facility-based physician individually and, if a physician belongs to a physician group, also as part of the physician group.]
(i) Annual enrollee notice concerning use of an access
plan. An HMO operating a plan that relies on an access plan as specified
in §11.1600 of this title (relating to Information to Prospective
and Current Contract Holders and Enrollees) and §11.1607 of this
title must provide notice of this fact to each enrollee participating
in the plan at issuance and at least 30 days before renewal. The notice
must include[:]
[(1)]
a link to any webpage listing of information
on network waivers and access plans [regions, counties,
or ZIP codes] made available under subsection (e)[(2)]
of this section.[; and]
[(2) information on how to obtain
or view any access plan or plans the HMO uses.]
(j) Disclosure of substantial decrease in the availability of certain contracted physicians or providers. An HMO is required to provide notice as specified in this subsection of a substantial decrease in the availability of contracted facility-based physicians or providers at a contracted facility.
(1) A decrease is substantial if:
(A) the contract between the HMO and any facility-based physician or provider group that comprises 75% or more of the contracted physicians or providers for that specialty at the facility terminates; or
(B) the contract between the facility and any facility-based physician or provider group that comprises 75% or more of the contracted physicians or providers for that specialty at the facility terminates, and the HMO receives notice as required under §11.901 of this title (relating to Required and Prohibited Provisions).
(2) For purposes of this subsection, decreases
in numbers of physicians and other providers must be assessed separately,
but [Despite paragraph (1) of this subsection,] no
notice of a substantial decrease is required if:
(A) alternative contracted physicians or providers of the same specialty as the physician or provider group that terminates a contract as specified in paragraph (1) of this subsection are made available to enrollees at the facility so the percentage level of contracted physicians or providers of that specialty at the facility is returned to a level equal to or greater than the percentage level that was available before the substantial decrease; or
(B) the HMO determines [certifies to
the department, by email to mcqa@tdi.texas.gov, that the HMO's determination
] that the termination of the [physician] contract
has not caused the [contracted physician service delivery network
for any plan supported by the] network to be noncompliant with
the adequacy standards specified in §11.1607 of this title, as
those standards apply to the applicable physician or provider specialty.
(3) An HMO must prominently post notice of any contract termination specified in paragraph (1)(A) or (B) of this subsection and the resulting decrease in availability of contracted physicians or providers on the portion of the HMO's website where its physician and provider listing is available to enrollees.
(4) Notice of any contract termination specified in paragraph (1)(A) or (B) of this subsection and of the decrease in availability of physicians or providers must be maintained on the HMO's website until the earlier of:
(A) the date on which adequate contracted physicians or providers of the same specialty become available to enrollees at the facility at the percentage level specified in paragraph (2)(A) of this subsection; or
(B) six months from the date that the HMO initially
posts the notice.[; or]
[(C) the date on which the HMO provides
to the department, by email to mcqa@tdi.texas.gov, the certification
specified in paragraph (2)(B) of this subsection.]
(5) An HMO must post notice as specified in paragraph (3) of this subsection and update its web-based contracted physician and provider listing as soon as practicable and in no case later than two business days after:
(A) the effective date of the contract termination as specified in paragraph (1)(A) of this subsection; or
(B) the later of:
(i) the date on which an HMO receives notice of a contract termination as specified in paragraph (1)(B) of this subsection; or
(ii) the effective date of the contract termination as specified in paragraph (1)(B) of this subsection.
The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.
Filed with the Office of the Secretary of State on September 3, 2024.
TRD-202404153
Jessica Barta
General Counsel
Texas Department of Insurance
Earliest possible date of adoption: October 20, 2024
For further information, please call: (512) 676-6555