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Texas Department of Insurance
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Subchapter R. Diabetes

28 TAC §§21.2602 and 21.2604

The Texas Department of Insurance (the department) proposes amendments to §§21.2602 and 21.2604 to clarify that all requirements of 28 TAC, Chapter 21, Subchapter R (relating to Diabetes) (Subchapter R) apply to health plans provided by risk pools created under Chapter 172, Local Government Code (risk pools). Subchapter R was adopted in 1999 pursuant to Insurance Code art. 21.53D (art. 21.53D), which directs the Commissioner of Insurance (the commissioner), in consultation with the Texas Diabetes Council (TDC), to adopt by rule minimum standards for benefits provided to enrollees with diabetes. Subchapter R, as originally adopted, excluded risk pools from the requirement that health plans that provide benefits for the treatment of diabetes and associated conditions must provide coverage for diabetes equipment, supplies and self-management training programs. Excluding risk pools from providing these coverages does not conform to the applicable statutory mandate and is inconsistent with legislative intent. This proposal resolves that inconsistency.

The general rule, as established by Local Government Code §172.014, is that risk pools are not subject to the jurisdiction of the department. However, the Legislature expressly included risk pools in the scope statement of art. 21.53D. In comments to rule amendments proposed in the January 10, 2003, issue of the Texas Register (28 TexReg 430), pertinent parts of which the department is withdrawing by a notice in this issue, a commenter took the position that risk pools cannot be made subject to rules adopted by the commissioner pursuant to art. 21.53D that impose requirements that coverage be provided for diabetes equipment, supplies and self-management training.

In support of this assertion, the commenter pointed to art. 21.53G, a separate statute, that applies to diabetes equipment, supplies and services. The Legislature did not expressly include risk pools in that mandate, as was done in art. 21.53D. Thus, the commenter concluded that risk pools are subject to rules adopted under art. 21.53D, but not to any part of those rules that require coverage for diabetes equipment, supplies and self-management training.

The department has reviewed the legislative history for arts. 21.53D and 21.53G, and believes that it was the manifest intent of the legislature to include risk pools in all of the requirements established pursuant to art. 21.53D.Articles 21.53D and 21.53G were both passed by Texas 75th Legislature in 1997, as SB 162 and SB 163, respectively.

The bill analyses for both bills emphasized that many Texans had diabetes, and that diabetes-related costs for Texans totaled billions of dollars. The bill analysis for SB 163 pointed out that studies confirmed that training, supplies and equipment necessary for diabetic self-management save money and human suffering by reducing hospital admissions and lowering the risk of complications from diabetes. The bill analysis for SB 162 highlighted a trial program in Maryland that promoted nutrition counseling, case management and structured outpatient diabetes education programs. The Maryland program resulted in a 40 percent decreased risk of hospital admission for enrollees the first year, and a 50 percent reduction the second year. The bill analysis for SB 163 pointed out that the American Diabetes Association had found that lack of reimbursement was the most significant impediment to the development of diabetes outpatient education programs

SB 162 directed the Health and Human Services Commission (HHSC) to develop a Texas Diabetes Care Pilot Program. The program was to provide continuous care including preventive services such as structured outpatient diabetes education, nutrition counseling and case management. SB 162 directed the HHSC, in developing the program, to take into consideration what was done in the Maryland program noted above.

Pursuant to SB 162, the Texas Diabetes Council administered the Texas Diabetes Care Pilot Program under the direction of the HHSC. At the same time, pursuant to SB 162, the TDC worked with the Commissioner of Insurance to develop rules that established minimum standards for benefits to be provided to persons with diabetes who were enrollees of benefit plans identified in art. 21.53D.

It is the department’s position that art. 21.53D instructs the commissioner to adopt rules that set standards for the full spectrum of diabetes treatment activities. The legislative histories for SB 162 and SB 163 both lead to the conclusion that rules adopted pursuant to art. 21.53D must address preventive care, and that such preventive care must include, at a minimum, equipment, supplies and self-management training. An examination of the TDC’s recommendations for minimum standards for diabetes treatment, found at http://www.tdh.state.tx.us/diabetes/min.htm, reinforces this conclusion. In these minimum standards, the TDC has identified certain care services and monitoring steps that providers need to take with diabetes patients to meet treatment goals and targets in order to minimize costly and deleterious complications. Achieving these goals and targets would be impossible without the coverage for diabetes equipment, supplies and self-management training that Subchapter R requires.

Additionally, it should be noted that the legislature enacted SB 162 later than SB 163. SB 163 was signed in both the House and the Senate on April 29, 1997 and sent to the Governor on April 30, 1997. It was signed by the Governor on May 9, 1997.

SB 162 was passed by the Senate and engrossed on March 10, 1997 . The House amended SB 162 and passed it on May 24, 1997 . The Senate concurred in the House amendments on May 28, 1997 . SB 162 was signed by the Governor on June 20, 1997 .

Finally, in passing SB 162, the legislature made a specific statement about the applicability of art. 21.53D to risk pools, but made no such specific statement in SB 163. In fact, SB 163 did not address the issue of the applicability of art. 21.53G to risk pools at all. SB 163, as well as its legislative history, are silent on the question of making art. 21.53G applicable to risk pools. It is only because of the language in Local Government Code §172.014 that a reconciliation of the intent of SB 162 and SB 163 is necessary.

Rather than suggesting an intent to include risk pools in the scope of art. 21.53D for only limited purposes, the history gives the clear message that the legislature’s manifest intent was to provide persons covered by risk pools (persons working for cities and counties) with the same benefits as everyone else covered by health plans subject to art. 21.53D.

Because the legislature enacted art. 21.53D later than art. 21.53G, art. 21.53D prevails. Thus, this proposal treats risk pools the same as all other benefit plans that are subject to Subchapter R. This includes the requirement that the benefit plans provide coverage for diabetes equipment, supplies and self-management training in accordance with the standards in these rules. The fact that art. 21.53D addressed its applicability to risk pools more specifically than did art. 21.53G buttresses this conclusion.

Additionally, this proposal includes an amendment to §21.2602 to delete unnecessary language and an amendment to §21.2604 to correct a citation.

Kim Stokes, Senior Associate Commissioner, Life, Health and Licensing, has determined that for each year of the first five years the proposed sections will be in effect, there will be no fiscal impact to state and local governments as a result of the enforcement or administration of the rule. There will be no measurable effect on local employment or the local economy as a result of the proposal. Any economic costs to local governments required to comply with these amendments are the result of the legislative enactment of SB 162 in 1997.

The original adoption of this chapter in 1999 has resulted in delaying the experience of those costs for risk pools until these proposed amendments become effective. Thus, if these proposals are adopted, risk pools may experience costs related to providing coverage for diabetes equipment, supplies and self-management training that they have not experienced since the original adoption of Subchapter R. However, those costs are the direct result of the passage of SB 162 in 1997.

Ms. Stokes has determined that for each year of the first five years the proposed amendments are in effect, the public benefits anticipated as a result of the proposed amendments will be the clarification of the applicability of certain provisions to health benefits provided by a risk pool, and the provision of coverage for equipment, supplies and self-management training for risk pool enrollees that have diabetes. Ms. Stokes also has determined that any economic costs to entities required to comply with these amendments, as well as any costs to a covered entity qualifying as a small or micro business under Government Code §2006.001, for each year of the first five years the proposed amendments will be in effect, are the result of the legislative enactment of SB 162 in 1997, and not as a result of the adoption, enforcement, or administration of the proposed amendments. The total cost to a covered entity would not vary between the smallest and largest businesses. Therefore, it is the department’s position that the adoption of these proposed amendments will have no adverse economic effect on small businesses or micro-businesses. Regardless of the fiscal effect, the department does not believe it is either legal or feasible to exempt small businesses or micro-businesses from the requirements of these proposed amendments. To do so would allow differentiation in the provision of diabetes self-management training or coverage for diabetes self-management training between small business health carriers compared to large health carriers.

To be considered, written comments on the proposal must be submitted no later than 5:00 p.m. on August 18, 2003 to Gene C. Jarmon, General Counsel and Chief Clerk, Mail Code 113-2A, Texas Department of Insurance, P. O. Box 149104, Austin, Texas 78714-9104. An additional copy of the comment must be simultaneously submitted to Bill Bingham, Deputy Commissioner for Regulatory Matters, Life, Health and Licensing Division, Mail Code 107-2A, Texas Department of Insurance, P.O. Box 149104 , Austin , Texas 78714-9104 . A request for a public hearing should be submitted separately to the Office of the Chief Clerk.

The amendments are proposed under the Insurance Code Articles 21.53G and 21.53D, and §36.001. Article 21.53G determines and defines the component or components of self-management training and provides that the commissioner shall adopt rules as necessary for the implementation of the article. Article 21.53D §3 provides that the commissioner shall by rule adopt minimum standards for benefits to enrollees with diabetes and that each health care benefit plan shall provide benefits for the care required by the minimum standards. Section 36.001 provides that the Commissioner of Insurance may adopt rules necessary and appropriate to implement the powers and duties of the Texas Department of Insurance.

The following articles are affected by this proposal: Insurance Code Articles 21.53G and 21.53D

§21.2602. Required Benefits for Persons with Diabetes.

(a) - (b) (No change.)

(c) Health benefits plans delivered, issued for delivery, or renewed on or after January 1, 1998, by an entity other than an HMO, which provide coverage limited to hospitalization expenses, shall provide coverage to each insured for diabetes equipment, diabetes supplies, and diabetes self-management training programs, in accordance with §§21.2603, 21.2605 [ §21.2603 of this title, §21.2605 of this title,] and 21.2606 [§ 21.2606 ] of this title, during hospitalization of the insured.

(d) (No change.)

§21.2604. Minimum Standards for Benefits for Persons with Diabetes, requirement for Periodic Assessment of Physician and Organizational Compliance.

(a) Health benefit plans provided by HMOs shall provide coverage for the services in paragraphs (1) through (7) of this subsection and shall contract with providers that agree to comply with the minimum practice standards outlined in subsection (b) of this section. Services to be covered include:

(1) - (5) (No change.)

(6) diabetes equipment and supplies in accordance with §21.2605 of this title (relating to Diabetes Equipment and Supplies)[,except notwithstanding §172.014, Local Government Code, or any other law, this subsection does not apply to health benefits provided by a risk pool created under Chapter 172, Local Government Code]; and

(7) diabetes self-management training, in accordance with subsection (b)(1)(A)(iii) [(b)(1)(ii)] of this section[,] and §21.2606 of this title (relating to Diabetes Self-Management Training) [or §21.2607 of this title (relating to Accessibility and Availability of Diabetes Self-Management Training Prior to January 1, 2002), except, notwithstanding §172.014, Local Government Code, or any other law, this subsection does not apply to health benefits provided by a risk pool created under Chapter 172, Local Government Code];

(b) - (c) (No change.)

(d) Health benefit plans provided by entities other than HMOs shall provide coverage at a minimum for:

(1) - (5) (No change.)

(6) diabetes equipment and supplies in accordance with §21.2605 of this title[,except notwithstanding §172.014, Local Government Code, or any other law, this subsection does not apply to health benefits provided by a risk pool created under Chapter 172, Local Government Code ];and

(7) diabetes self-management training in accordance with §21.2606 of this title [or §21.2607 of this title, except, notwithstanding §172.014, Local Government Code, or any other law, this subsection does not apply to health benefits provided by a risk pool created under Chapter 172, Local Government Code].

For more information, contact: ChiefClerk@tdi.texas.gov