83R21122 PMO-D
	By: Smithee	H.B. No. 3270
	Substitute the following for H.B. No. 3270:
	By:  Smithee	C.S.H.B. No. 3270

	A BILL TO BE ENTITLED
	AN ACT
	relating to preferred provider and exclusive provider network
	regulations; providing administrative sanctions and penalties.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
	SECTION 1.  Chapter 1301, Insurance Code, is amended by
	adding Subchapters F, G, and H to read as follows:
	SUBCHAPTER F. NETWORK ADEQUACY STANDARDS
	Sec. 1301.251.  NETWORK ADEQUACY REQUIREMENTS.  A preferred
	provider benefit plan must include a health care service delivery
	network that complies with this chapter and local market access
	adequacy requirements as established by the commissioner by rule,
	including requirements within the insurer's designated service
	area relating to:
	(1)  the sufficiency of:
	(A)  the number, size, and geographic
	distribution of networks in relation to:
	(i)  the number of insureds;
	(ii)  the insureds' relevant characteristics
	and medical and health care needs; and
	(iii)  the current and projected utilization
	of covered health care services;
	(B)  the number and classes of preferred providers
	to ensure choice, access, and quality of care; and
	(C)  the number of preferred provider physicians
	with admitting privileges at one or more preferred provider
	hospitals located within the insurer's designated service area; and
	(2)  the availability and accessibility of:
	(A)  preferred providers at all times;
	(B)  necessary general, specialty, and
	psychiatric hospital services;
	(C)  physical and occupational therapy services
	and chiropractic services;
	(D)  emergency care at all times;
	(E)  urgent care for medical and behavioral health
	conditions; and
	(F)  routine care and preventive care on a timely
	basis as determined by the commissioner by rule.
	Sec. 1301.252.  SERVICE AREAS.  A preferred provider benefit
	plan may have one or more contiguous or noncontiguous service areas
	provided that a service area that is not statewide must comply with
	geographic parameters established by the commissioner by rule.
	Sec. 1301.253.  MONITORING AND CORRECTIVE ACTION. An
	insurer shall monitor on an ongoing basis, and take corrective
	action to maintain compliance with, the network requirements
	described by Sections 1301.251 and 1301.252.
	Sec. 1301.254.  REQUEST FOR WAIVER OF NETWORK ADEQUACY
	STANDARDS. (a) On an insurer's showing of good cause as described
	by this section, the commissioner may waive one or more adequacy
	standards for the insurer's network imposed under this subchapter
	or adopted by the commissioner by rule.
	(b)  The commissioner may find good cause to grant the waiver
	if the insurer demonstrates as described by this section that
	physicians or health care providers necessary for an adequate local
	market access network are not available for contract or have
	refused to contract with the insurer on reasonable terms or any
	terms.
	(c)  If physicians or health care providers necessary for an
	adequate local market access network are available within the
	relevant service area for a covered service for which the insurer
	requests a waiver, the insurer's request for waiver must include:
	(1)  a list of the physicians or providers within the
	relevant service area that the insurer attempted to contract with,
	identified by name and specialty or facility type;
	(2)  a description of the manner in which the insurer
	last contacted each physician or provider and the date of the
	contact;
	(3)  a description of each reason each physician or
	provider gave for refusing to contract with the insurer;
	(4)  an estimate of total claims cost savings in a year
	the insurer anticipates will result from using a local market
	access plan instead of contracting with physicians or providers
	located within the service area, and the impact of the savings on
	premiums;
	(5)  a description of the steps the insurer will take to
	improve the network to avoid future requests to renew the waiver;
	and
	(6)  any other information required by the commissioner
	by rule or requested by the commissioner.
	(d)  The insurer's request for a waiver must state whether
	any physician or health care provider is available within the
	service area for the covered service or services for which the
	insurer requests the waiver.
	(e)  Not later than the 30th day after the date an insurer
	files a request for a waiver, a physician or health care provider
	may file a response to the request in the manner prescribed by the
	commissioner by rule.
	Sec. 1301.255.  GRANTING REQUEST FOR WAIVER OF NETWORK
	ADEQUACY STANDARDS. If the commissioner grants a waiver requested
	under Section 1301.254, the department shall post on the
	department's Internet website information relevant to the grant of
	a waiver, including:
	(1)  the name of the preferred provider benefit plan
	for which the request is granted;
	(2)  the insurer offering the plan; and
	(3)  the affected service area.
	Sec. 1301.256.  RENEWAL OF WAIVER.  (a)  An insurer may apply
	annually for renewal of a waiver that has been granted under Section
	1301.254.
	(b)  Application for renewal of a waiver must be filed in a
	manner prescribed by the commissioner by rule not less than the 30th
	day before the anniversary of the date the commissioner granted the
	waiver.
	Sec. 1301.257.  EXPIRATION OF WAIVER. A waiver of network
	adequacy standards expires on the anniversary of the date the
	commissioner granted the waiver if:
	(1)  an insurer fails to timely request a renewal under
	Section 1301.256; or
	(2)  the department denies the insurer's request for
	renewal.
	Sec. 1301.258.  LOCAL MARKET ACCESS PLAN REQUIRED.  (a) Not
	later than the 30th day after the date an insurer's network fails to
	comply with the network adequacy requirements under this subchapter
	for a specific service area, the insurer must:
	(1)  establish a local market access plan as described
	by Section 1301.259; and
	(2)  request a waiver of network adequacy standards
	under Section 1301.254 seeking approval of the local market access
	plan.
	(b)  An insurer must file a local market access plan with the
	request for a waiver under Section 1301.254.
	(c)  The local market access plan must be provided to the
	department on request.
	Sec. 1301.259.  LOCAL MARKET ACCESS PLAN CONTENTS. A local
	market access plan required under Section 1301.258 must specify for
	each service area that does not meet the network adequacy
	requirements:
	(1)  the geographic area within the service area in
	which a sufficient number of preferred providers, identified by
	class of provider, are not available as required by network
	adequacy standards;
	(2)  a map, with key and scale, that identifies the
	geographic areas within the service area in which the health care
	services, physicians, or health care providers are not available;
	(3)  the reasons that the preferred provider network
	does not meet the network adequacy standards;
	(4)  procedures that the insurer will implement to
	assist insureds in obtaining medically necessary services if a
	preferred provider is not reasonably available, including
	procedures to coordinate care to avoid balance billing; and
	(5)  the manner in which nonpreferred provider benefit
	claims will be handled when a preferred or otherwise contracted
	provider is not available, including procedures for compliance with
	requirements for claims payments.
	Sec. 1301.260.  LOCAL MARKET ACCESS PLAN PROCEDURES.  (a)  An
	insurer must establish and implement procedures for use in each
	service area for which a local market access plan is submitted,
	including procedures to:
	(1)  identify requests for preauthorization of
	services for insureds that are likely to require the provision of
	services by physicians or health care providers that do not have a
	contract with the insurer;
	(2)  furnish to insureds, before a health care service
	is provided, an estimate of the amount the insurer will pay the
	physician or health care provider;
	(3)  except in the case of an exclusive provider
	benefit plan, notify insureds that they may be liable for any
	amounts charged by the physician or provider that are not paid in
	full by the insurer;
	(4)  identify claims filed by nonpreferred providers in
	instances in which a preferred provider was not reasonably
	available to the insured; and
	(5)  make initial and, if required, subsequent payment
	of the claims in the manner required by this subchapter.
	(b)  A local market access plan may include a process for
	negotiating with a nonpreferred provider before the provider
	provides a health care service.
	Sec. 1301.261.  LOCAL MARKET ACCESS PLAN ANNUAL FILINGS. An
	insurer must submit a local market access plan established under
	Section 1301.258 as a part of the annual report on network adequacy
	required under Section 1301.263.
	Sec. 1301.262.  PAYMENT OF CERTAIN BASIC BENEFIT CLAIMS;
	DISCLOSURES. (a) Except as provided by Subsection (f), an insurer
	shall pay claims in compliance with this section if a preferred
	provider is not reasonably available to an insured and services are
	provided by a nonpreferred provider, including if:
	(1)  emergency care is required;
	(2)  a preferred provider is not reasonably available
	within the relevant service area; or
	(3)  a nonpreferred provider's service is preapproved
	or preauthorized based on the unavailability of a preferred
	provider in the relevant service area.
	(b)  If services are provided to an insured by a nonpreferred
	provider because a preferred provider is not reasonably available
	to the insured, the insurer shall:
	(1)  pay not less than the usual or customary charge for
	the service, less any patient coinsurance, copayment, or deductible
	responsibility under the preferred provider benefit plan;
	(2)  pay the claim at the preferred benefit coinsurance
	level; and
	(3)  in addition to any amounts that would have been
	credited had the provider been a preferred provider, credit any
	out-of-pocket amounts shown by the insured to have been actually
	paid to the nonpreferred provider for covered services in excess of
	the allowed amount toward the insured's deductible and annual
	out-of-pocket maximum applicable to preferred provider services.
	(c)  An insurer must calculate the reimbursement of a
	nonpreferred provider for a covered service using an appropriate
	methodology that:
	(1)  if based on usual, reasonable, or customary
	charges, is based on generally accepted industry standards and
	practices for determining the customary billed charge for a service
	and that fairly and accurately reflect market rates, including
	geographic differences in costs;
	(2)  if based on claims data, is based on sufficient
	data to constitute a representative and statistically valid sample;
	(3)  is updated at least annually;
	(4)  does not use data that is more than three years
	old; and
	(5)  is consistent with nationally recognized and
	generally accepted bundling edits and logic.
	(d)  An insurer shall pay all covered basic benefits for
	services obtained from physicians or health care providers at a
	level not less than the preferred provider benefit plan's basic
	benefit level of coverage, regardless of whether the service is
	provided within the designated service area for the plan.  The
	insurer may not deny a claim because the services were provided by
	physicians or health care providers outside the designated service
	area for the plan.
	(e)  If a service is provided to an insured by a nonpreferred
	facility-based physician and the difference between the allowed
	amount and the billed charge is at least $1,000, the insurer must
	include a notice on the explanation of benefits that the insured may
	have the right to request mediation of the claim of an uncontracted
	facility-based provider under Chapter 1467 and may obtain
	information at the department's Internet website.
	(f)  This section does not apply to an exclusive provider
	benefit plan.
	Sec. 1301.263.  NETWORK ADEQUACY ANNUAL REPORT. (a) Before
	marketing a preferred provider benefit plan in a new service area
	and not less frequently than annually on a date prescribed by the
	commissioner by rule, an insurer shall file a network adequacy
	report as described by Subsection (b) with the department.
	(b)  The network adequacy report must specify:
	(1)  the trade name of each preferred provider benefit
	plan in which insureds participate;
	(2)  the applicable service area of each plan;
	(3)  whether the preferred provider service delivery
	network supporting each plan is adequate under applicable network
	adequacy standards; and
	(4)  as required by the commissioner by rule, the
	number of:
	(A)  claims for nonpreferred provider benefits,
	excluding claims paid at the preferred benefit coinsurance level;
	(B)  claims for nonpreferred provider benefits
	that were paid at the preferred benefit coinsurance level;
	(C)  complaints by nonpreferred providers;
	(D)  complaints by insureds relating to the amount
	of the insurer's payment for basic benefits or balance billing;
	(E)  complaints by insureds relating to the
	availability of preferred providers; and
	(F)  complaints by insureds relating to the
	accuracy of preferred provider listings.
	(c)  The annual report required under this section must be
	submitted as required by the commissioner by rule.
	Sec. 1301.264.  ENFORCEMENT; SANCTIONS. (a) The
	commissioner may impose sanctions under Chapter 82 or issue a cease
	and desist order under Chapter 83 if the commissioner determines,
	after notice and opportunity for hearing, that the insurer's
	network and any local market access plan supporting the network are
	inadequate to ensure the availability and accessibility of:
	(1)  preferred provider benefits;
	(2)  all medical and health care services and items
	covered under a preferred provider benefit plan; or
	(3)  adequate personnel, specialty care, and
	facilities.
	(b)  In exercising the authority under Subsection (a), the
	commissioner may order an insurer to:
	(1)  reduce a service area of a preferred provider
	benefit plan;
	(2)  stop marketing a preferred provider benefit plan
	in all or part of the state; or
	(3)  withdraw from the preferred provider benefit plan
	market.
	(c)  This section does not limit the authority of the
	commissioner to order any other appropriate corrective action,
	sanction, or penalty.
	SUBCHAPTER G.  DISCLOSURES TO INSUREDS
	Sec. 1301.301.  MANDATORY DISCLOSURES. (a) An application
	for a health insurance policy that provides preferred provider
	benefits and an endorsement, amendment, or rider to the policy must
	be written in a readable and understandable format adopted by the
	commissioner by rule.
	(b)  An insurer shall, on request, provide to a current or
	prospective insured an accurate written description of the policy
	terms that allows the insured to make comparisons and informed
	decisions about selecting a health care plan. The written
	description must be in a readable and understandable format adopted
	by the commissioner by rule and must include a clear, complete, and
	accurate description that:
	(1)  discloses the name of the entity providing the
	coverage;
	(2)  discloses that the entity providing the coverage
	is an insurance company;
	(3)  provides a toll-free telephone number, unless the
	company is exempted by statute or rule from having a toll-free
	telephone number, and a mailing address to enable a current or
	prospective insured to obtain additional information;
	(4)  explains the coverage is for, as applicable:
	(A)  preferred provider benefits; or
	(B)  exclusive provider benefits that only
	provide benefits from preferred providers, except as otherwise
	provided in the policy;
	(5)  explains the distinction between preferred and
	nonpreferred providers;
	(6)  identifies all covered services and benefits,
	including benefits that provide payment for:
	(A)  the services of a preferred provider and a
	nonpreferred provider;
	(B)  prescription drug coverage for generic and
	name brand drugs;
	(C)  emergency care services and benefits and
	information on access to after-hours care; and
	(D)  out-of-area services and benefits;
	(7)  explains the insured's financial responsibility
	for payment for any premiums and for deductibles, copayments,
	coinsurance, or other out-of-pocket expenses for noncovered or
	nonpreferred services;
	(8)  discloses any limitations and exclusions,
	including the existence of any drug formulary limitations and any
	limitations regarding preexisting conditions;
	(9)  discloses any prior authorization requirements,
	including preauthorization review, concurrent review, post-service
	review, and postpayment review, and any penalties or reductions in
	benefits resulting from the failure to obtain required
	authorizations;
	(10)  explains provisions for continuity of treatment
	in the event of termination of a preferred provider's participation
	in the plan;
	(11)  provides a summary of complaint resolution
	procedures, if any;
	(12)  discloses that the insurer is prohibited from
	retaliating against the insured because the insured or another
	person has filed a complaint on behalf of the insured, or against a
	physician or health care provider who, on behalf of the insured, has
	reasonably filed a complaint against the insurer or appealed a
	decision of the insurer;
	(13)  in a format required or permitted by the
	commissioner by rule, provides a current list of preferred
	providers and complete descriptions of the provider networks,
	including names and locations of physicians and health care
	providers, and a disclosure of which preferred providers will not
	accept new patients;
	(14)  shows the service area or areas; and
	(15)  advises that information is updated at least
	annually regarding whether any waivers or local access plans
	approved by the commissioner apply to the plan.
	(c) A copy of the written description of policy terms
	required by Subsection (b) must be filed with the department:
	(1)  on the date of the initial filing of the preferred
	provider benefit plan; and
	(2)  not later than the 60th day after the date of a
	material change to a policy term.
	Sec. 1301.302.  PROMOTIONAL MATERIAL. (a) A preferred
	provider benefit plan and all promotional, solicitation, and
	advertising material related to the plan must clearly describe the
	distinction between preferred and nonpreferred providers. An
	illustration of preferred provider benefits must be in proximity to
	an equally prominent description of basic benefits.
	(b)  An insurer that maintains an Internet website providing
	information about the insurer or the health insurance policies
	offered by the insurer for use by current or prospective insureds is
	required to provide:
	(1)  an Internet-based provider listing;
	(2)  an Internet-based listing of the state regions,
	counties, or postal code areas within the insurer's service area or
	areas;
	(3)  an Internet-based listing of the information
	required by Section 1301.301; and
	(4)  a statement of whether the network meets or does
	not meet the network adequacy requirements under Subchapter F and
	as prescribed by the commissioner by rule.
	Sec. 1301.303.  PREFERRED PROVIDER AND EXCLUSIVE PROVIDER
	NOTICES. (a) An insurer shall provide a notice in all health
	insurance policies that provide preferred provider benefits and
	outlines of coverage in at least 12-point font that must read
	substantially similar to the following:
	You have the right to an adequate network of preferred
	providers (also known as "network providers").
	If you believe that the network is inadequate, you may file a
	complaint with the Texas Department of Insurance.
	If you obtain out-of-network services because a preferred
	provider was not reasonably available, you may be entitled to have
	the claim paid at the in-network rate and your out-of-pocket
	expenses counted toward your in-network deductible and
	out-of-pocket maximum.
	You have the right to obtain advance estimates of the amounts
	that:
	(1)  a provider may bill for projected services, from
	your out-of-network provider; and
	(2)  the insurer may pay for the projected services,
	from your insurer.
	You may obtain a current directory of preferred providers at
	the following website: (insurer's Internet website address or
	marked inapplicable if the insurer does not maintain an Internet
	website) or by calling (insurer's telephone number) for assistance
	in finding available preferred providers. If the directory is
	materially inaccurate, you may be entitled to have an
	out-of-network claim paid at the in-network level of benefits.
	If you are treated by a provider or hospital that is not a
	preferred provider, you may be billed for anything not paid by the
	insurer.
	If the amount you owe to an out-of-network hospital-based
	radiologist, anesthesiologist, pathologist, emergency department
	physician, or neonatologist is greater than $1,000 (not including
	your copayment, coinsurance, and deductible responsibilities) for
	services received in a network hospital, you may be entitled to have
	the parties participate in a teleconference and, if the result is
	not to your satisfaction, in a mandatory mediation at no cost to
	you. You can learn more about mediation at the Texas Department of
	Insurance Internet website.
	(b)  An insurer shall provide a notice in all health
	insurance policies that provide exclusive provider benefits and
	outlines of the coverage in at least 12-point font that must read
	substantially similar to the following:
	An exclusive provider benefit plan does not provide benefits
	for services you receive from out-of-network providers, with
	specific exceptions as described in your policy and below.
	You have the right to an adequate network of preferred
	providers (also known as "network providers").
	If you believe that the network is inadequate, you may file a
	complaint with the Texas Department of Insurance.
	If your insurer approves a referral for out-of-network
	services because a preferred provider is not available, or if you
	have received out-of-network emergency care, your insurer must, in
	most cases, resolve the nonpreferred provider's bill so that you
	only have to pay any applicable coinsurance, copay, and deductible
	amounts.
	You may obtain a current directory of preferred providers at
	the following website: (insurer's Internet website address or
	marked inapplicable if the insurer does not maintain an Internet
	website) or by calling (insurer's telephone number) for assistance
	in finding available preferred providers. If the directory is
	materially inaccurate, you may be entitled to have an
	out-of-network claim paid at the in-network level of benefits.
	Sec. 1301.304.  ACCESS TO INFORMATION. Not less than
	annually an insurer shall provide notice to all insureds describing
	the manner by which an insured may:
	(1)  on a cost-free basis access a current list of all
	preferred providers, including a nonelectronic copy of the list;
	and
	(2)  obtain by telephone at a specified telephone
	number during regular business hours assistance to identify
	available preferred providers.
	Sec. 1301.305.  PROVIDER LISTING UPDATES. (a) An insurer
	shall update all electronic or nonelectronic listings of preferred
	providers made available to insureds not less than quarterly.
	(b) If an insurer does not maintain a preferred provider
	listing, electronically or otherwise, that an insured may access to
	identify current preferred providers, the insurer shall distribute
	a current preferred provider listing to all insureds not less than
	annually by mail or other method as agreed by the insured.
	Sec. 1301.306.  HOSPITAL DISCLOSURES.  Preferred provider
	information and listings must include a method by which an insured
	may identify hospitals that have contractually agreed to:
	(1)  exercise good faith efforts to accommodate a
	request from an insured to use a preferred provider; and
	(2)  provide in a timely manner as prescribed by the
	commissioner by rule information sufficient to enable the insured
	to determine whether an assigned facility-based physician or
	physician group is a preferred provider.
	Sec. 1301.307.  PROVIDER DISCLOSURES. Information about a
	preferred provider must:
	(1)  disclose whether the provider is accepting new
	patients;
	(2)  provide a method by which an insured may notify the
	insurer of inaccurate information in the listing, including
	information related to:
	(A)  the provider's contract status; and
	(B)  whether the provider is accepting new
	patients;
	(3)  identify preferred provider facility-based
	physicians able to provide services at a preferred provider
	facility;
	(4)  specifically identify those facilities at which
	the insurer has no contracts with a class of facility-based
	providers; and
	(5)  be dated and provided in not less than 10-point
	font.
	Sec. 1301.308.  LOCAL MARKET ACCESS PLANS. An insurer
	shall, if applicable, on issuance of a policy or not less than 30
	days before the date a policy is renewed, provide notice that the
	preferred provider benefit plan relies on a local market access
	plan as specified by the commissioner by rule. The contents of the
	notice shall be determined by the commissioner by rule.
	Sec. 1301.309.  REIMBURSEMENT RATES FOR NONPREFERRED
	PROVIDERS. An insurer shall disclose in each insurance policy and
	outline of coverage information relating to the reimbursement of
	basic benefit services, including how reimbursements of
	nonpreferred providers are determined and except in an exclusive
	provider benefit plan:
	(1)  if an insurer reimburses nonpreferred providers
	based directly or indirectly on usual, customary, or reasonable
	charges, the source of the data, how the data is used in determining
	reimbursements, and the existence of any reduction to a
	reimbursement to nonpreferred providers; and
	(2)  if an insurer bases reimbursement of nonpreferred
	providers on an amount other than the total billed charges:
	(A)  whether the reimbursement of claims for
	nonpreferred providers is less than the billed charge for the
	service;
	(B)  whether the insured may be liable to the
	nonpreferred provider for any amounts not paid by the insurer;
	(C)  a description of the methodology by which the
	reimbursement amount for nonpreferred providers is calculated; and
	(D)  a method for insureds to obtain a real-time
	estimate of the amount of reimbursement that the insurer will pay to
	a nonpreferred provider for a particular service.
	Sec. 1301.310.  FALSE OR MISLEADING INFORMATION PROHIBITED.
	An insurer may not cause or permit the use or distribution of
	information related to a preferred provider benefit plan that is
	untrue or misleading.
	Sec. 1301.311.  PROVIDER LISTING BINDING IN CERTAIN CASES.
	An insurer shall pay a claim for services provided by a nonpreferred
	provider at the applicable preferred benefit coinsurance
	percentage if the insured demonstrates that:
	(1)  the insured reasonably relied on a statement that
	a physician or provider was a preferred provider as specified in:
	(A)  a provider listing; or
	(B)  provider information; and
	(2)  the statement was obtained from the insurer, the
	insurer's Internet website, or the Internet website of a third
	party designated by the insurer to provide the listing for use by
	the insureds not more than 30 days before the date of service.
	SUBCHAPTER H. CONSUMER PROTECTIONS FOR EXCLUSIVE PROVIDER BENEFIT
	PLANS
	Sec. 1301.351.  EXCLUSIVE PROVIDER BENEFIT PLAN
	REQUIREMENTS. This subchapter applies only to exclusive provider
	benefit plans.
	Sec. 1301.352.  NETWORK APPROVAL REQUIRED. An insurer may
	not offer, deliver, or issue for delivery an exclusive provider
	benefit plan in this state unless the commissioner has:
	(1)  completed a qualifying examination of the plan to
	determine compliance with this chapter; and
	(2)  approved the insurer's exclusive provider network
	in the relevant service area.
	Sec. 1301.353.  NETWORK APPROVAL:  APPLICATION. An
	applicant for approval of an exclusive provider network must submit
	to the department a complete application disclosing the following
	information:
	(1)  a statement that the filing is:
	(A)  an application for approval; or
	(B)  a modification to an approved application;
	(2)  organizational information for the applicant,
	including:
	(A)  the full name of the applicant;
	(B)  the applicant's license or certificate
	number issued by the department;
	(C)  the applicant's home office address; and
	(D)  the applicant's telephone number;
	(3)  the name and telephone number of a contact person
	who will facilitate requests relating to the application from the
	department;
	(4)  an attestation signed by the applicant's corporate
	president or secretary or the president's or secretary's authorized
	representative that:
	(A)  the person has read the application, is
	familiar with its contents, and the information submitted in the
	application, including the attachments, is true and complete; and
	(B)  the network, including any requested or
	granted waiver and any access plan if applicable, is adequate for
	the services to be provided under the exclusive provider benefit
	plan;
	(5)  a description and a map of the service area, with
	key and scale, identifying the area to be served within the
	parameters established by the commissioner by rule;
	(6)  a list of all plan documents and each plan document
	pending the department's approval or review, including each
	associated form number or filing identification number;
	(7)  each form of physician and health care provider
	contracts to demonstrate inclusion of provisions required by the
	commissioner by rule or a sworn statement by the attestator that the
	physician and health care provider contracts comply with the
	requirements of this chapter;
	(8)  a description of the quality improvement program
	and work plan that must include a process for medical peer review
	and that explains arrangements to ensure confidentiality of medical
	records shared among preferred providers;
	(9)  network configuration information, including:
	(A)  a map for each specialty demonstrating the
	location and distribution of the physician and health care provider
	network within the proposed service area as prescribed by the
	commissioner by rule; and
	(B)  a list of each of the following:
	(i)  each physician and individual health
	care practitioner who is a preferred provider, including license
	type and specialization and an indication of whether the provider
	is accepting new patients; and
	(ii)  each institutional provider that is a
	preferred provider;
	(10)  documentation demonstrating that:
	(A)  the exclusive provider benefit plan
	documents and procedures comply with Section 1301.363;
	(B)  without regard to whether the physician or
	health care provider has a contractual or other arrangement to
	provide items or services to insureds, the plan contains the
	provisions and procedures that comply with Section 1301.363; and
	(C)  the insurer maintains a complaint system that
	provides reasonable procedures to resolve a written complaint
	initiated by a complainant; and
	(11)  the physical address of the location of all books
	and records described by Section 1301.354.
	Sec. 1301.354.  NETWORK APPROVAL:  QUALIFYING EXAMINATIONS.
	An applicant shall make available for examination at the physical
	address designated by the insurer under Section 1301.353(11) the
	policy and certificate of insurance and documents relating to:
	(1)  quality improvement, including a program
	description and work plan required by Section 1301.359;
	(2)  utilization management, including a program
	description, policies and procedures, criteria used to determine
	medical necessity, and examples of adverse determination letters,
	adverse determination logs, and independent review organization
	logs;
	(3)  network configuration, including information
	demonstrating the adequacy of the exclusive provider network
	described by Section 1301.353(9) and all executed physician and
	provider contracts applicable to the network;
	(4)  credentialing;
	(5)  marketing of the exclusive provider benefit plan,
	including all written materials to be presented to prospective
	insureds that discuss the exclusive provider network available to
	insureds under the plan and how preferred and nonpreferred
	physicians or health care providers are to be paid under the plan;
	and
	(6)  complaints made, including a complaint log
	categorized and completed as prescribed by the commissioner by
	rule.
	Sec. 1301.355.  NETWORK MODIFICATIONS. (a) An insurer must
	file with the department an application for approval to implement a
	change to an exclusive provider network configuration that affects
	the adequacy of the network, expands or reduces an existing service
	area, or adds a new service area.
	(b)  If a document submitted under Section 1301.353(5), (7),
	or (9) is replaced or materially changed, an insurer must submit a
	replacement or amended document and identify the change before the
	change is implemented.
	(c)  Before the department grants approval of an application
	for expansion or reduction of a service area, the insurer must be in
	compliance with the requirements of Section 1301.359 through
	1301.361 in the existing service areas and in the proposed service
	areas.
	(d)  Except as provided by Subsection (b), an insurer must
	file with the department any change to information filed under
	Subsection (a) not later than the 30th day after the date the change
	is implemented.
	Sec. 1301.356.  NETWORK APPROVAL: REVISED APPLICATIONS. If
	the application for approval under Section 1301.353 or network
	modification under Section 1301.355 is revised or supplemented
	during the review process, the applicant must submit to the
	department a transmittal letter filing the entire revised or
	supplemented page and describing the revision or supplement.
	Sec. 1301.357.  EXAMINATIONS. (a) The commissioner shall
	conduct an examination relating to an exclusive provider benefit
	plan not less than once every five years.
	(b)  On-site financial, market conduct, complaint, or
	quality of care examinations are conducted under Chapter 401 or 751
	and rules adopted by the commissioner.
	(c)  An insurer shall make the books and records relating to
	the insurer's operations available to the department to facilitate
	an examination.
	(d)  On request of the commissioner, an insurer must provide
	a copy of any contract, agreement, or other arrangement between the
	insurer and a physician or health care provider. Documentation
	provided to the commissioner under this subsection is confidential
	as described by Section 1301.0056.
	(e)  The commissioner may examine and use the records of an
	insurer, including records of a quality of care program or medical
	peer review committee as defined by Section 151.002, Occupations
	Code, as necessary to implement this subchapter, including
	commencement and prosecution of an enforcement action under
	Subtitle B, Title 2, or rules adopted by the commissioner.
	Information obtained under this subsection is confidential as
	described by Section 1301.0056.
	(f)  An insurer shall make available for examination at the
	physical address designated under Section 1301.353(11)
	documentation relating to:
	(1)  quality improvement, including program
	descriptions, work plans, program evaluations, and committee and
	subcommittee meeting minutes;
	(2)  utilization management, including program
	descriptions, policies and procedures, criteria used to determine
	medical necessity, and examples of adverse determination letters,
	adverse determination logs, including all levels of appeal, and
	utilization management files;
	(3)  complaints made, including complaint files, a
	complaint log categorized and completed as prescribed by rules
	adopted by the commissioner and documentation and details of
	actions taken;
	(4)  the satisfaction of insureds, physicians, and
	health care providers, including satisfaction surveys, insured
	disenrollment logs, and termination logs;
	(5)  network configuration, including information
	required by Section 1301.353(9);
	(6)  credentialing, including credentialing files; and
	(7)  any reports submitted by the insurer to any
	federal or state governmental entity.
	Sec. 1301.358.  QUALITY IMPROVEMENT PROGRAMS REQUIRED. An
	insurer shall develop and maintain a quality improvement program
	designed to objectively and systematically monitor and evaluate the
	quality and appropriateness of health care services provided under
	a benefit plan and to pursue opportunities for improvement. The
	program must be ongoing and comprehensive, addressing the quality
	of clinical care and health care services. The insurer must
	dedicate adequate resources, including personnel and information
	systems, to the program.
	Sec. 1301.359.  QUALITY IMPROVEMENT PROGRAMS: CONTENTS OF
	PROGRAM. The program established under Section 1301.358 must
	include:
	(1)  a written description of the program's
	organizational structure, functional responsibilities, and meeting
	frequency;
	(2)  an annual work plan designed to reflect the type of
	services and the population served by the benefit plan in terms of
	age groups, disease categories, and special risk status, including:
	(A)  objective and measurable goals, planned
	activities to accomplish the goals, time frames for implementation,
	designation of responsible individuals, and evaluation
	methodology; and
	(B)  measures to address each program area,
	including:
	(i)  network adequacy, availability and
	accessibility of care, and assessment of open and closed physician
	and individual provider panels;
	(ii)  continuity of medical and health care
	and related services;
	(iii)  the conduct of clinical studies;
	(iv)  the adoption and updating of clinical
	practice guidelines or clinical care standards, including
	guidelines and standards for preventive health care services, that
	are communicated to and approved by participating physicians and
	individual providers;
	(v)  insured, physician, and individual
	health care provider satisfaction;
	(vi)  the complaint process, including
	complaint data, and identification and removal of barriers that may
	impede insureds, physicians, and health care providers from
	effectively making complaints against the insurer;
	(vii)  preventive health care, including
	health promotion and outreach activities;
	(viii)  claims payment processes;
	(ix)  contract monitoring, including
	oversight and compliance with filing requirements;
	(x)  utilization review processes;
	(xi)  credentialing;
	(xii)  insured services; and
	(xiii)  pharmacy services, including drug
	utilization;
	(3)  an annual written report addressing completed
	activities, trending of clinical and service goals, analysis of
	program performance, and conclusions;
	(4)  a process for selection and retention of
	contracted preferred providers that complies with rules
	established by the commissioner; and
	(5)  a peer review procedure for physicians and
	individual providers, as required in Chapters 151 through 164,
	Occupations Code, that designates a credentialing committee to
	administer the review and make recommendations regarding
	credentialing decisions.
	Sec. 1301.360.  QUALITY IMPROVEMENT PROGRAMS: DUTIES OF
	GOVERNING BODIES. (a) The insurer's governing body shall appoint a
	quality improvement committee that:
	(1)  includes practicing physicians and individual
	providers; and
	(2)  may include one or more insureds from the
	exclusive provider benefit plan's service area.
	(b)  An employee of the insurer may not serve as a committee
	member.
	(c)  The governing body is responsible for the program. The
	quality improvement program and the annual work plan may not be
	implemented without the approval of the governing body.
	(d)  The governing body must meet not less frequently than
	annually to receive and review reports of the committee or its
	subcommittees and take action when appropriate.
	(e)  The governing body must review the annual written report
	on the quality improvement program.
	Sec. 1301.361.  QUALITY IMPROVEMENT PROGRAMS: DUTIES OF
	COMMITTEES; SUBCOMMITTEES. (a) The quality improvement committee
	established under Section 1301.360 shall evaluate the overall
	effectiveness of the quality improvement program.
	(b)  The committee may delegate duties to subcommittees
	subject to the committee's oversight. A subcommittee may include
	practicing physicians, individual health care providers, and
	insureds from the service area.
	(c)  The subcommittees shall:
	(1)  collaborate and coordinate efforts to improve the
	quality, availability, and accessibility of health care services;
	(2)  meet regularly; and
	(3)  report the findings of each meeting, including any
	recommendations, in writing to the quality improvement committee.
	(d)  The quality improvement committee shall use
	multidisciplinary teams as necessary to accomplish quality
	improvement program goals.
	Sec. 1301.362.  QUALITY IMPROVEMENT PROGRAMS:
	PRESUMPTIONS. (a)  Except as provided by Subsection (b), in a
	review of an insurer's quality improvement program, the department
	shall presume the program complies with statutory and regulatory
	requirements if the insurer received nonconditional accreditation
	or certification in connection with quality improvement by:
	(1)  the National Committee for Quality Assurance;
	(2)  the Joint Commission;
	(3)  the Utilization Review Accreditation Commission;
	or
	(4)  the Accreditation Association for Ambulatory
	Health Care.
	(b)  If the department determines that an accreditation or
	certification program does not adequately address a material
	statutory or regulatory requirement of this state, the department
	may not presume compliance.
	Sec. 1301.363.  OUT-OF-NETWORK CLAIMS: PAYMENT.  (a) An
	insurer shall fully reimburse a nonpreferred provider at the usual
	and customary rate or at a rate agreed to by the nonpreferred
	provider for services provided before the date the insured can
	reasonably be transferred to a preferred provider if an insured
	cannot reasonably reach a preferred provider for:
	(1)  a medical screening examination or other
	evaluation required by state or federal law and necessary to
	determine whether a medical emergency condition exists to be
	provided in a hospital emergency facility, a freestanding emergency
	medical care facility, or a comparable emergency facility; and
	(2)  necessary emergency care services, including the
	treatment and stabilization of an emergency medical condition
	provided in a hospital emergency facility, a freestanding emergency
	medical care facility, or a comparable emergency facility.
	(b)  If medically necessary covered services other than
	emergency care are not available through a preferred provider, on
	the request of a preferred provider, the insurer:
	(1)  must approve a referral to a nonpreferred provider
	in a timely manner appropriate to the delivery of the services and
	the condition of the patient, but not later than five business days
	after the date the insurer receives documentation relating to the
	referral; and
	(2)  may not deny a referral until a health care
	provider with expertise in the same specialty as or a specialty
	similar to the type of health care provider to whom a referral is
	requested has reviewed the referral.
	(c)  An insurer may facilitate an insured's selection of a
	nonpreferred provider if medically necessary covered services,
	excluding emergency care, are not available through a preferred
	provider and an insured has received a referral from a preferred
	provider.
	(d)  If an insurer facilitates an insured's selection as
	described by Subsection (c), the insurer must offer an insured a
	list of not less than three nonpreferred providers with expertise
	in the necessary specialty who are reasonably available considering
	the medical condition and location of the insured.
	(e)  An insurer reimbursing a nonpreferred provider under
	Subsection (a), (b), or (d) must:
	(1)  ensure that the insured is held harmless for any
	amounts in excess of the copayment and deductible amount and
	coinsurance percentage that the insured would have paid had the
	insured received services from a preferred provider; and
	(2)  issue payment to the nonpreferred provider at the
	usual and customary rate or at a rate agreed to by the nonpreferred
	provider.
	(f)  An insurer must provide with the payment an explanation
	of benefits to the insured and request that the insured notify the
	insurer if the nonpreferred provider bills the insured for amounts
	in excess of the amount paid by the insurer.
	(g)  An insurer must pay any amounts that the nonpreferred
	provider bills the insured in excess of the amount paid by the
	insurer in a manner consistent with Subsection (e).
	(h)  If the insured selects a nonpreferred provider that is
	not included in the list provided under Subsection (d) by the
	insurer, notwithstanding Section 1301.262(f), the insurer must pay
	the claim in accordance with Section 1301.262.
	Sec. 1301.364.  OUT-OF-NETWORK CLAIMS: MEDIATION. (a)  An
	insurer may require that an insured request mediation under Chapter
	1467 or under provisions adopted by the commissioner by rule. The
	insurer must notify the insured when mediation is available and
	inform the insured of how to request mediation.  The insurer may
	not:
	(1)  except as provided by Subsection (b), penalize the
	insured for failing to request mediation; or
	(2)  require the insured to participate in the
	mediation.
	(b)  Notwithstanding Subsection (a)(1), an insurer that
	requests that the insured initiate mediation is not responsible for
	any balance bill the insured receives from the nonpreferred
	provider until the insured requests mediation.
	(c)  Eligibility for mediation under this section is based on
	the entire unpaid amount of the nonpreferred provider bills, less
	any applicable copayment, deductible, and coinsurance.
	(d)  The insurer's payment must be based on the amount due
	resulting from the mediation process.
	Sec. 1301.365.  OUT-OF-NETWORK CLAIMS: PAYMENT
	METHODOLOGIES. Any methodology used by an insurer to calculate
	reimbursement of nonpreferred providers for services that are
	covered under an exclusive provider benefit plan must be:
	(1)  based on:
	(A)  generally accepted industry standards and
	practices for determining the usual, reasonable, or customary fee
	for a service to ensure market rates, including geographic
	differences in costs, are fairly and accurately reflected; or
	(B)  claims data that is:
	(i)  sufficient to constitute a
	representative and statistically valid sample;
	(ii)  updated not less than annually; and
	(iii)  not more than three years old; and
	(2)  consistent with nationally recognized and
	generally accepted bundling edits and logic.
	SECTION 2.  Section 1301.005(b), Insurance Code, is amended
	to read as follows:
	(b)  Subject to Sections 1301.262, 1301.309, and 1301.363,
	if [If] services are not available through a preferred provider
	within a designated service area under a preferred provider benefit
	plan or an exclusive provider benefit plan, an insurer shall
	reimburse a physician or health care provider who is not a preferred
	provider at the same percentage level of reimbursement as a
	preferred provider would have been reimbursed had the insured been
	treated by a preferred provider.
	SECTION 3.  Section 1301.0051(a), Insurance Code, is amended
	to read as follows:
	(a)  An insurer that offers an exclusive provider benefit
	plan shall establish procedures in compliance with Section 1301.358
	to ensure that health care services are provided to insureds under
	reasonable standards of quality of care that are consistent with
	prevailing professionally recognized standards of care or
	practice. The procedures must include:
	(1)  mechanisms to ensure availability, accessibility,
	quality, and continuity of care;
	(2)  subject to Section 1301.059, a continuing quality
	improvement program to monitor and evaluate services provided under
	the plan, including primary and specialist physician services and
	ancillary and preventive health care services, provided in
	institutional or noninstitutional settings;
	(3)  a method of recording formal proceedings of
	quality improvement program activities and maintaining quality
	improvement program documentation in a confidential manner;
	(4)  subject to Section 1301.059, a physician review
	panel to assist the insurer in reviewing medical guidelines or
	criteria;
	(5)  a patient record system that facilitates
	documentation and retrieval of clinical information for the
	insurer's evaluation of continuity and coordination of services and
	assessment of the quality of services provided to insureds under
	the plan;
	(6)  a mechanism for making available to the
	commissioner the clinical records of insureds for examination and
	review by the commissioner on request of the commissioner; and
	(7)  a specific procedure for the periodic reporting of
	quality improvement program activities to:
	(A)  the governing body and appropriate staff of
	the insurer; and
	(B)  physicians and health care providers that
	provide health care services under the plan.
	SECTION 4.  Sections 1301.0052, Insurance Code, is amended
	to read as follows:
	Sec. 1301.0052.  EXCLUSIVE PROVIDER BENEFIT PLANS:
	REFERRALS FOR MEDICALLY NECESSARY SERVICES.  (a)  If a covered
	service is medically necessary and is not available through a
	preferred provider, the issuer of an exclusive provider benefit
	plan, on the request of a preferred provider, shall subject to
	Subchapter H:
	(1)  approve the referral of an insured to a
	nonpreferred provider within a reasonable period; and
	(2)  fully reimburse the nonpreferred provider at the
	usual and customary rate or at a rate agreed to by the issuer and the
	nonpreferred provider.
	(b)  Subject to Section 1301.363, an [An] exclusive provider
	benefit plan must provide for a review by a health care provider
	with expertise in the same specialty as or a specialty similar to
	the type of health care provider to whom a referral is requested
	under Subsection (a) before the issuer of the plan may deny the
	referral.
	SECTION 5.  Section 1301.0053, Insurance Code, is amended to
	read as follows:
	Sec. 1301.0053.  EXCLUSIVE PROVIDER BENEFIT PLANS:
	EMERGENCY CARE.  If a nonpreferred provider provides emergency care
	as defined by Section 1301.155 to an enrollee in an exclusive
	provider benefit plan, the issuer of the plan shall, subject to
	Section 1301.363(a), reimburse the nonpreferred provider at the
	usual and customary rate or at a rate agreed to by the issuer and the
	nonpreferred provider for the provision of the services.
	SECTION 6.  Section 1301.0055, Insurance Code, is amended to
	read as follows:
	Sec. 1301.0055.  NETWORK ADEQUACY STANDARDS. The
	commissioner shall by rule adopt network adequacy standards in
	compliance with Subchapters F, G, and H and that:
	(1)  are adapted to local markets in which an insurer
	offering a preferred provider benefit plan operates;
	(2)  ensure availability of, and accessibility to, a
	full range of contracted physicians and health care providers to
	provide health care services to insureds; and
	(3)  on good cause shown, may allow departure from
	local market network adequacy standards if the commissioner posts
	on the department's Internet website the name of the preferred
	provider plan, the insurer offering the plan, and the affected
	local market.
	SECTION 7.  Section 1301.006(a), Insurance Code, is amended
	to read as follows:
	(a)  Subject to Subchapter F, an [An] insurer that markets a
	preferred provider benefit plan shall contract with physicians and
	health care providers to ensure that all medical and health care
	services and items contained in the package of benefits for which
	coverage is provided, including treatment of illnesses and
	injuries, will be provided under the health insurance policy in a
	manner ensuring availability of and accessibility to adequate
	personnel, specialty care, and facilities.
	SECTION 8.  Section 1301.009(a), Insurance Code, is amended
	to read as follows:
	(a)  In addition to the reports required under Section
	1301.263, not [Not] later than March 1 of each year, an insurer
	shall file with the commissioner a report relating to the preferred
	provider benefit plan offered under this chapter and covering the
	preceding calendar year.
	SECTION 9.  Section 1301.056(a), Insurance Code, is amended
	to read as follows:
	(a)  Subject to Subchapters F, G, and H, an [An] insurer or
	third-party administrator may not reimburse a physician or other
	practitioner, institutional provider, or organization of
	physicians and health care providers on a discounted fee basis for
	covered services that are provided to an insured unless:
	(1)  the insurer or third-party administrator has
	contracted with either:
	(A)  the physician or other practitioner,
	institutional provider, or organization of physicians and health
	care providers; or
	(B)  a preferred provider organization that has a
	network of preferred providers and that has contracted with the
	physician or other practitioner, institutional provider, or
	organization of physicians and health care providers;
	(2)  the physician or other practitioner,
	institutional provider, or organization of physicians and health
	care providers has agreed to the contract and has agreed to provide
	health care services under the terms of the contract; and
	(3)  the insurer or third-party administrator has
	agreed to provide coverage for those health care services under the
	health insurance policy.
	SECTION 10.  Section 1301.059(b), Insurance Code, is amended
	to read as follows:
	(b)  Except as provided in Subchapter H, an [An] insurer may
	not engage in quality assessment except through a panel of at least
	three physicians selected by the insurer from among a list of
	physicians contracting with the insurer. The physicians
	contracting with the insurer in the applicable service area shall
	provide the list of physicians to the insurer.
	SECTION 11.  This Act applies only to an insurance policy
	that is delivered, issued for delivery, or renewed on or after
	January 1, 2014. A policy delivered, issued for delivery, or
	renewed before January 1, 2014, is governed by the law as it existed
	immediately before the effective date of this Act, and that law is
	continued in effect for that purpose.
	SECTION 12.  This Act takes effect September 1, 2013.