28 TAC §§21.4601 - 21.4605
1. INTRODUCTION. The Texas Department of Insurance proposes new Subchapter LL, §§21.4601 - 21.4605, concerning the requirements for health benefit plan issuers' submission of information and data relating to the use of non-network providers by health benefit plan insureds and enrollees and the payments made to those providers, as well as similar information and data for in-network providers necessary to support the study of facility-based provider network adequacy of health benefit plans by the Advisory Committee on Health Network Adequacy. The proposed new subchapter is necessary to implement section 20 of Senate Bill (SB) 1731, as enacted by the 80th Legislature, Regular Session, effective September 1, 2007, and to facilitate the study of network adequacy by the Advisory Committee on Health Network Adequacy.
SB 1731 enacts new Insurance Code §1456.0065 which requires the Commissioner of Insurance to establish an advisory committee to study the facility-based provider network adequacy of health benefit plans. Pursuant to SB 1731, section 20, the Commissioner must require by rule that each health benefit plan issuer subject to Insurance Code Chapter 1456 submit information to the Department concerning the use of non-network providers by health benefit plan insureds and enrollees and the payments made to those providers. The information collected must cover a 12-month period specified by the Commissioner. The Commissioner is directed to work with the advisory committee to develop the data collection and evaluate the information collected. Proposed new §§21.4601 - 21.4605 are necessary to implement the information and data collection requirement in SB 1731, section 20 and to facilitate the study of health network adequacy mandated by the Insurance Code §1456.0065.
In accordance with the Insurance Code §1456.0065, the Commissioner appointed an advisory committee to study facility-based provider network adequacy (the Advisory Committee on Health Network Adequacy), finalizing appointments to the committee on November 28, 2007, in Order No. 07-1062. As required by the Insurance Code §1456.0065, the committee membership includes physician representatives; hospital representatives; health benefit plan representatives; and association representatives representing physicians, hospitals, and health benefit plans. The Advisory Committee on Health Network Adequacy has thus far met on December 10, 2007, January 24, 2008, February 26, 2008, April 17, 2008, May 22, 2008, and August 13, 2008, and the proposed rule incorporates the guidance provided by the committee members.
Further, the Department published an informal draft of this proposal on its website on July 11, 2008, and invited public comment. Interested parties submitted comments to the informal draft which the Department has incorporated into this proposal. Finally, consistent with the Insurance Code §1212.002(b), the Department apprised the Technical Advisory Committee on Claims Processing of progress regarding this proposal during that committee's July 30, 2008 meeting, and invited comment from those committee members, as well. The Technical Advisory Committee on Claims Processing is appointed by the Commissioner pursuant to the Insurance Code §1212.001. Pursuant to §1212.002(a) of the Insurance Code, the committee is to advise the Commissioner on technical aspects of coding of health care services and claims development, submission, processing, adjudication, and payment, as well as the impact on those processes of contractual requirements and relationships, including relationships among employers, health benefit plans, insurers, health maintenance organizations, preferred provider organizations, electronic clearinghouses, physicians and other health care providers, third-party administrators, independent physician associations, and medical groups. Section 1212.002(b) of the Insurance Code requires the Commissioner to consult with the technical advisory committee before adopting any rule described by §1212.002(a).
The following is an overview of the proposed sections.
Proposed §21.4601 states the purpose of the proposed new subchapter.
Proposed §21.4602 addresses applicability of the new subchapter, specifying the types of health benefit plans to which the subchapter does and does not apply. Pursuant to SB 1731, section 20, the Commissioner must require by rule that each health benefit plan issuer subject to the Insurance Code Chapter 1456 submit information to the Department concerning the use of non-network providers by health benefit plan insureds and enrollees and the payments made to those providers. The proposed applicability accords with the Insurance Code §1456.002 and in proposed §1456.002(b) clarifies the applicability of the proposed information and data reporting requirements to governmental employee plans. Governmental employee plans means certain of those health benefit plans under Title 8, Health Insurance and Other Health Coverages, Subtitle H, Health Benefits and Other Coverages for Governmental Employees, specifically Insurance Code Chapters 1551, 1575, 1578, 1579, and 1601. Insurance Code §1456.0065 requires the health care network adequacy advisory committee to study facility-based provider network adequacy of "health benefit plans" and broadly defines "health benefit plan" to mean "an insurance policy or a contract or evidence of coverage issued by a health maintenance organization or an employer or employee sponsored health plan." Inclusion of the designated governmental employee plans in this data and information study is consistent with the mandate in Insurance Code §1456.0065. This clarification is necessary to eliminate any ambiguity in the applicability to governmental employee plans.
Proposed §21.4603 addresses the requirement to collect the requested information and data and the time periods for which the information and data is to be provided. Proposed §21.4603(a) requires health benefit plan issuers to collect the underlying data necessary for submission of all information specified in the Health Benefit Plan/Provider Contracting Practices Survey, Form No. LHL608, that is proposed for adoption by reference in §21.4605(a) and in the Health Benefit Plan Issuer Hospital Grid, Form No. LHL609, that is proposed for adoption by reference in §21.4605(b). Proposed §21.4603(b) addresses the time periods for which the information and data is to be provided. It provides that (i) the 12-month reporting period for the information and data requested in the Health Benefit Plan/Provider Contracting Practices Survey form, including the data for the in-network and non-network claims for facility-based physicians, is calendar year 2007; (ii) the enrollment data required in the Health Benefit Plan/Provider Contracting Practices Survey form and the Health Benefit Plan Issuer Hospital Grid form for private market plans, government employee plans, and Local Government Code Chapter 172 risk pools, is for the total number of lives covered under the plans as of September 1, 2008; and (iii) the information and data requested in the Health Benefit Plan Issuer Hospital Grid form is to be based on the health benefit plan issuer's current practices and network arrangements.
Proposed §21.4604 addresses the requirements and deadlines for the submission of the requested information and data. New §21.4604(a) proposes the deadlines for the submission of the required information and data. The proposed deadline is January 9, 2009 for both the Health Benefit Plan/Provider Contracting Practices Survey, Form No. LHL608, and the Health Benefit Plan Issuer Hospital Grid, Form No. LHL609. Proposed §21.4604(b) specifies the procedures for electronic filing of the required information and data.
Section 21.4605 proposes the adoption by reference of the two forms to be used in reporting the information and data required in the new subchapter. Proposed §21.4605(a) adopts by reference Form No. LHL608, entitled Health Benefit Plan/Provider Contracting Practices Survey . Health benefit plan issuers must utilize this form to submit summary company identification and contact information and to provide general information in narrative responses regarding current contracting practices relating to the use of in-network and non-network providers by health benefit plan enrollees and the payments made to those providers. Health benefit plan issuers must also use this form, which contains detailed instructions for completion of the form, to submit individual health benefit plan issuer information for both in-network and non-network claims for facility-based physicians for calendar year 2007, including for each type of facility-based physician listed on the form (Anesthesiologist, Pathologist, Radiologist, Neonatologist, Emergency Department Physician) total claim units, total billed amount, and total allowed amount. Proposed §21.4605(a) also provides a link for accessing the form on the Department's website.
In the Health Benefit Plan/Provider Contracting Practices Survey, Form No. LHL608, which is proposed to be adopted by reference in §21.4605(a), the definitions for the terms used in the form are set forth in the instructions in Instruction No. 7. The terms in-network and non-network are defined consistent with common usage in the health insurance and medical provider communities. The definition of the term balance billing excludes patient financial responsibility amounts attributable to copayments, coinsurance or deductible amounts for the purpose of eliciting information more specifically related to the issue of network adequacy. The questions in the Health Benefit Plan/Provider Contracting Practices Survey were developed with input and assistance from the Advisory Committee on Health Network Adequacy. The questions are designed to allow for a free form narrative response and to elicit information regarding the methods and means for identifying facility-based providers at in-network facilities and how health benefit plan issuers contract with those providers. During the development of the survey questions, committee members particularly focused on the need to obtain information regarding general contracting practices between health benefit plan issuers and health care providers while respecting the need to maintain the confidential nature of specific contracting practices. The Department and the Advisory Committee on Health Network Adequacy therefore drafted the questions to obtain general information that will support the committee's statutory mandate to study facility-based provider network adequacy without infringing upon issuer or provider interests in maintaining the confidentiality of proprietary information.
Proposed §21.4605(b) adopts by reference Form No. LHL609, entitled Health Benefit Plan Issuer Hospital Grid. This form requires the same company identification and contact information required in Form No. LHL608. Health benefit plan issuers must utilize this form, which contains detailed instructions, to submit information regarding which hospitals are in-network facilities and for those hospitals, which in-network physician or physician practice groups have clinical privileges. The Department has selected 281 hospitals for which information is requested in the Health Benefit Plan Issuer Hospital Grid; these hospitals include every acute care hospital in the state with 100 or more beds and 20 percent of smaller acute care hospitals, as identified by the Texas Department of State Health Services. While not every hospital in the state is included in the survey, these hospitals constitute a representative sample that will enable the Department to collect information and data concerning hospitals ranging from the very large to the smaller hospitals. The Department is using this representative sampling to reduce the number of facilities that must be contacted for purposes of time and cost efficiency. The Department is of the opinion that the hospitals included in the survey will provide the information and data necessary to identify whether there are disparate problems in insureds and enrollees being able to access in-network providers as a result of the size or location of the facility. Proposed §21.4605(b) also provides a link for accessing the form on the Department's website.
2. FISCAL NOTE. Dianne Longley, Director of Research and Analysis, Life/Health Division, has determined that for each year of the first five years the proposed new 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 proposal. There will be no measurable effect on local employment or the local economy as a result of the proposal.
3. PUBLIC BENEFIT/ COST NOTE. Ms. Longley also has determined that the anticipated public benefit will be that the Advisory Committee on Health Network Adequacy, appointed pursuant to §1456.0065(b) of the Insurance Code, will have information regarding the use of in-network and non-network providers by health benefit plan insureds and enrollees, including contracting practices, reimbursement rate methodologies, availability of in-network hospital based physicians, and the payments made to those providers. As required by §1456.0065 of the Insurance Code, this information will assist the advisory committee and the Department to study facility-based provider network adequacy of health benefit plans and to advise the Legislature and other state officials, including the Governor, Lieutenant Governor, Speaker of the House of Representatives, Commissioner, and the Chairs of the standing committees of the Senate and House of Representatives that have primary jurisdiction over health benefit plans, of the findings. More specifically, the data collected under the proposal will enable the Advisory Committee on Health Network Adequacy to advise the Legislature and other state officials on the existence, scale, and possible sources of issues pertaining to the use of non-network providers and network adequacy. The findings may influence future actions of the Legislature, the Department, or other interested parties, potentially regarding the affordability, availability, and delivery of health care.
Section 20 of SB 1731 requires the Commissioner by rule to require each health benefit plan issuer subject to Insurance Code Chapter 1456 to submit information to the Department concerning the use of non-network providers by health benefit plan insureds and enrollees and the payments made to those providers. SB 1731, section 20, requires that the information collected cover a 12-month period specified by the Commissioner.
The Department is proposing to adopt two reporting forms by reference, the Health Benefit Plan/Provider Contracting Practices Survey form that is proposed to be adopted by reference in §21.4605(a) and the Health Benefit Plan Issuer Hospital Grid that is proposed to be adopted by reference in §21.4605(b). The completion of these forms by the health benefit plan issuers and the submission of these forms to the Department constitute the entirety of the requirements imposed under the proposal. The persons required to comply with the proposal are issuers of any health benefit plan that provides benefits for medical or surgical expenses incurred as a result of a health condition, accident, or sickness, including (i) an individual, group, blanket, or franchise insurance policy or insurance agreement, (ii) a group hospital service contract, or (iii) an individual or group evidence of coverage that is offered by an insurance company, (iv) a group hospital service corporation operating under the Insurance Code Chapter 842, (v) a fraternal benefit society operating under the Insurance Code Chapter 885, (vi) a stipulated premium company operating under the Insurance Code Chapter 884, (vii) a health maintenance organization operating under the Insurance Code Chapter 843, (viii) a multiple employer welfare arrangement that holds a certificate of authority under the Insurance Code Chapter 846, (ix) an approved nonprofit health corporation that holds a certificate of authority under the Insurance Code Chapter 844, (x) any health benefit plan that provides health and accident coverage through a risk pool created under Chapter 172, Local Government Code, (xi) a basic coverage plan under the Insurance Code Chapter 1551, (xii) a basic plan under the Insurance Code Chapter 1575, (xiii) a basic plan under the Insurance Code Chapter 1578, (xiv) a primary care coverage plan under the Insurance Code Chapter 1579, and (xv) a basic coverage plan under the Insurance Code Chapter 1601.
In estimating probable costs to comply with the proposed information and data reporting requirements, the Department considered the following mitigating factors. Because SB 1731 requires only one time data reporting by the health benefit plan issuers, the Department does not anticipate that the costs associated with the data collection will be re-occurring. Additionally, some health benefit plan issuers may report information and data on behalf of certain government employee plans or risk pools. As set forth in the proposed Health Benefit Plan/Provider Contracting Practices Survey form, Instruction Nos. 9 and 10, and in the proposed Health Benefit Plan Issuer Hospital Grid form, Instruction Nos. 6 and 7, each designated governmental employee plan and each risk pool operating under Local Government Code Chapter 172 shall either independently submit the reports required pursuant to this proposal or shall authorize and require the entity administering the governmental employee plan or risk pool to submit the information and data on its behalf. A governmental employee plan or risk pool may determine that the entity with which it contracts is most appropriately situated to provide the requested information. The proposal therefore affords some flexibility to governmental employee plans and risk pools with respect to the manner of submission of the required information and data. Health benefit plan issuers submitting the requested information and data on behalf of other entities in addition to submitting the information and data for themselves may incur some additional costs.
The probable costs to health benefit plan issuers required to comply with the proposed rules will result from the following cost components: (i) the number of staff hours required by current health benefit plan issuer employees to complete the proposed Health Benefit Plan/Provider Contracting Practices Survey form and the proposed Health Benefit Plan Issuer Hospital Grid form; (ii) the approximate average hourly wage of those employees; and (iii) the cost of additional technology or databases, if any, necessary to comply with certain of the rule reporting requirements, including the data enrollment information that is required in both of the proposed forms and the claims data information that is required in the proposed Health Benefit Plan/Provider Contracting Practices Survey form.
The Department requested cost information from health benefit plan issuer members of the Advisory Committee on Health Network Adequacy and by public comment during the posting of the informal draft of this proposal. The Department received estimates from two large, statewide health benefit plan issuers, a $2,000 estimate and a $10,000 estimate. The Department has not received cost information from smaller issuers or issuers with different administrative operations or complex network arrangements despite numerous efforts to obtain this information. However, the cost information collected for larger health benefit plan issuers provides a good basis of comparison for use in estimating the cost of compliance with this proposal for small health benefit plan issuers.
The actual total cost to each health benefit plan issuer required to comply with the proposed rule will depend on several factors but will depend primarily on the issuer's particular costs for each cost component, the availability and efficacy of the health benefit plan issuer's information technology processes and systems, the availability of provider contracting information, and differences in administrative operations. It is anticipated that the cost of compliance will not differ substantially, regardless of the size of the issuer, for completion of the information and data requested in the Health Benefit Plan/Provider Contracting Practices Survey form. The reason for this is that the information requested in Question Nos. 1 - 16 of the Health Benefit Plan/Provider Contracting Practices Survey pertains to business decisions that each issuer, regardless of size, must make at a strategic level and provide narrative responses that will not necessarily vary in complexity or length based on the size of the issuer. The cost of compliance may vary based on how an issuer operates, including whether the issuer uses more complex network arrangements. Variations in possible network arrangements may include: (i) direct contracts between the issuer and physicians and providers, (ii) rental agreements between the issuer and preferred provider networks, (iii) rental agreements between the issuer and multiple preferred provider organizations, and (iv) establishment of multiple networks with varying levels of availability to different health benefit plans. The cost of collecting contracting information and claims data may be higher for issuers without direct access to some of the information and data for the network that the survey requires. The claims data requested in Question No. 17 of the Health Benefit Plan/Provider Contracting Practices Survey will need to be determined via data queries and the time and expense will depend on the capabilities of the issuer's existing technology capabilities. Issuers without full and complete information are given the opportunity to report information and data based on the best of their ability, so long as these limitations and assumptions are disclosed. The Department does not expect issuers to recode past claims data or report information and data not readily available. It is anticipated that issuers with larger provider networks and/or multiple provider networks will incur greater costs in completing the Health Benefit Plan Issuer Hospital Grid form than those issuers with single small provider networks. The greater the number of in-network hospitals utilized by an issuer the more personnel time that will be required by issuer personnel to obtain the information and complete the form. Because information on which hospital based physicians have been granted clinical privileges by each individual hospital may not be readily available, it may be necessary for issuer personnel to contact each network hospital to obtain the necessary information. Issuers with different administrative operations, including multiple or complex network arrangements, may have higher costs to complete the Health Benefit Plan Issuer Hospital Grid form than other issuers. Issuers with multiple network arrangements are required to complete the Health Benefit Plan Issuer Hospital Grid twice, providing responsive information for both the largest and smallest network based upon enrollment. A health benefit plan issuer may have to include disclosures or limitations and assumptions in the reporting of the form as a result of its particular administrative operations or network arrangements.
Individual issuers will be able to use the Department's cost analysis approach to calculate their own costs for compliance with the rule based on their own network arrangements and estimated costs for the various individual cost components. The probable costs of compliance with the rule are primarily the result of the enactment of SB 1731, which specifically requires in section 20 the submission of information by each health benefit plan issuer subject to Insurance Code Chapter 1456 to the Department concerning the use of non-network providers by health benefit plan enrollees and the payments made to those providers, and which specifically requires in Insurance Code §1456.0065 that the Commissioner appoint an advisory committee to study facility-based provider network adequacy of health benefit plans.
4. ECONOMIC IMPACT STATEMENT AND REGULATORY FLEXIBILITY ANALYSIS FOR SMALL AND MICRO BUSINESSES. The Government Code §2006.002(c) requires that if a proposed rule may have an economic impact on small businesses, state agencies must prepare as part of the rulemaking process an economic impact statement that assesses the potential impact of the proposed rule on small businesses and a regulatory flexibility analysis that considers alternative methods of achieving the purpose of the rule. The Government Code §2006.001(2) defines "small business " as a legal entity, including a corporation, partnership, or sole proprietorship, that is formed for the purpose of making a profit; is independently owned and operated, and has fewer than 100 employees or less than $6 million in annual gross receipts. The Government Code §2006.001(1) defines "micro business" similarly to "small business" but specifies that such a business may not have more than 20 employees. The Government Code §2006.002(f) requires a state agency to adopt provisions concerning micro businesses that are uniform with those provisions outlined in Government Code §2006.002(b) - (d) for small businesses. The Department has determined that the proposal may have an adverse economic impact on approximately 10 to 25 health benefit plan issuers that qualify as small or micro businesses under the Government Code §2006.001(1) and (2) and that are required to comply with the proposed rules. The adverse economic impact of the proposed rules anticipated by the Department on these 10 to 25 health benefit plan issuers will result from the costs required to comply with the reporting requirements in the Health Benefit Plan/Provider Contracting Practices form that is proposed to be adopted by reference in §21.4605(a) and the Health Benefit Plan Issuer Hospital Grid that is proposed to be adopted by reference in §21.4605(b). The completion of these forms by the health benefit plan issuers and the submission of these forms to the Department constitute the entirety of the requirements imposed under the proposal. The cost components and cost analysis that are outlined in the Public Benefit/Cost Note part of this proposal notice also apply to those health benefit plan issuers that are small or micro businesses. The actual total cost to each small or micro business issuer required to comply with the proposed rule will depend on several factors but will depend primarily on the issuer's particular costs for each cost component, the availability and efficacy of the health benefit plan issuer's information technology processes and systems, the availability of provider contracting information, and differences in administrative operations. It is anticipated that the cost of compliance will not differ substantially between larger issuers and small or micro business issuers for completion of the information and data requested in the Health Benefit Plan/Provider Contracting Practices Survey form. The reason for this is that the information requested in Question Nos. 1-16 of the Health Benefit Plan/Provider Contracting Practices Survey pertains to business decisions that each issuer, regardless of size, must make at a strategic level and provide narrative responses that will not necessarily vary in complexity or length based on the size of the issuer. The claims data requested in Question No. 17 of the Health Benefit Plan/Provider Contracting Practices Survey will need to be determined via data queries and the time and expense will depend on the capabilities of the issuer's existing technology capabilities. The Department is giving issuers without full and complete information the opportunity to report information and data based on the best of their ability, so long as these limitations and assumptions are disclosed. The Department does not expect issuers to recode past claims data or report information and data not readily available. This should assist small and micro business issuers to reduce their costs of compliance. Also, because it is anticipated that issuers with larger provider networks and/or multiple provider networks will incur greater costs in completing the Health Benefit Plan Issuer Hospital Grid form than those issuers with single small provider networks, it is expected that small or micro business issuers will incur less costs to complete that form.
Individual small and micro business issuers will be able to use the Department's cost analysis approach to calculate their own costs for compliance with the rule based on their own network arrangements and estimated costs for the various individual cost components.
Additionally, the Department has determined that the proposal may have an indirect adverse economic impact on hospitals. Of the 281 hospitals included in the Health Benefit Plan Issuer Hospital Grid, 181 have fewer than 100 beds. In collecting the necessary information and data for the Health Benefit Plan Issuer Hospital Grid, health benefit plan issuers may contact the hospitals because hospitals may be in the best position to determine which physicians currently hold privileges. Therefore, hospitals may incur a cost for providing information to each health benefit plan issuer with which the hospital has a contract as an in-network provider as an indirect result of this rule. However, information provided by the hospital to the issuers should be the same for each issuer.
Pursuant to Government Code §2006.002(c), the Department has considered not collecting the information and data from issuers that qualify as small business or micro businesses. The Department has also considered collecting a reduced amount of information and data from issuers that qualify as small businesses or micro businesses.
The law authorizing this proposal, section 20 of SB 1731 and §1456.0065 of the Insurance Code, as enacted by the 80th Legislature, Regular Session, requires each health benefit plan issuer subject to the Insurance Code Chapter 1456 to submit information to the Department concerning the use of non-network providers by health benefit plan insureds and enrollees and the payments made to those providers. Further, Insurance Code §1456.0065(b) requires the advisory committee appointed by the Commissioner to study facility-based provider network adequacy of health benefit plans. The purpose of the proposal is to collect information regarding the use of in-network and non-network providers by health benefit plan insureds and enrollees, including contracting practices, reimbursement rate methodologies, availability of in-network hospital based physicians, and the payments made to those providers. This information, in accordance with §1456.0065 of the Insurance Code, will assist the Advisory Committee on Health Network Adequacy and the Department to study facility-based provider network adequacy of health benefit plans and to advise the Legislature and other state officials of the findings.
The data collected under the proposal will enable the Advisory Committee on Health Network Adequacy to advise the Legislature and other state officials on the existence, scale, and possible sources of issues pertaining to the use of non-network providers and network adequacy. Omitting small and micro businesses from compliance with the proposal or requesting less information from small and micro businesses may result in incomplete or misleading data that may not only frustrate the purpose of both section 20 of SB 1731 and §1456.0065 of the Insurance Code, but may also result in the Legislature and other state officials not having the necessary information to adequately study the existence, scale, and possible sources of issues pertaining to the use of non-network providers and network adequacy of health benefit plan issuers that cover a large number of Texas consumers and to develop possible legislation.
The Department has determined in accordance with §2006.002(c) of the Government Code that because the purpose of the proposal and the authorizing statute, section 20 of SB 1731 and §1456.0065 of the Insurance Code, is to collect information and data pertaining to the use of non-network providers and network adequacy, the regulatory alternative of exempting some health benefit plan issuers mandated by §1456.002 will not sufficiently provide the Legislature with the information necessary to adequately study and develop possible legislation related to the use of non-network providers and network adequacy. Collecting a reduced amount of information would also frustrate the purpose of the data collection. The Department has weighed the potential costs to small and micro businesses of compliance with this rule against the purpose of the required data collection. Absent compelling cost information from small and micro businesses, at this time the Department has determined that it is not necessary to adopt regulatory alternatives to the proposed rule. The proposal includes provisions that should assist small and micro business issuers to alleviate some of their costs of compliance. Small and micro business issuers that do not have full and complete information will have the opportunity to report information and data based on the best of their ability, so long as these limitations and assumptions are disclosed. They also will not be required to recode past claims data or report information and data not readily available.
5. TAKINGS IMPACT ASSESSMENT. The Department 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 and, therefore, does not constitute a taking or require a takings impact assessment under the Government Code §2007.043.
6. REQUEST FOR PUBLIC COMMENT. To be considered, written comments on the proposal must be submitted no later than 5:00 p.m. on November 3, 2008, 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 Dianne Longley, Director of Research and Analysis, Life/Health Division, Mail Code 107-2A, Texas Department of Insurance, P.O. Box 149104, Austin, Texas 78714-9104.
The Commissioner will consider the adoption of the proposed new sections in a public hearing under Docket Number 2697, at 9:30 a.m. October 14, 2008 in Room 100 of the William P. Hobby, Jr. State Office Building, 333 Guadalupe Street, Austin, Texas 78701. Written and oral comments presented at the hearing will be considered.
7. STATUTORY AUTHORITY. The new sections are proposed under section 20 of SB 1731, as enacted by the 80th Legislature, Regular Session, effective September 1, 2007, and the Insurance Code §§1456.0065, 1212.002, and 36.001. section 20(a) of SB 1731 provides that the Commissioner shall by rule require each health benefit plan issuer subject to Insurance Code Chapter 1456 to submit information to the Department concerning the use of non-network providers by health benefit plan enrollees and the payments made to those providers. The Commissioner is required to work with the network adequacy study group to develop the data collection and evaluate the information collected. Section 20(b) of SB 1731 provides that an issuer that fails to submit data as required under section 20 is subject to an administrative penalty under the Insurance Code Chapter 84. Further, each date the issuer fails to submit the data as required is a separate violation for purposes of penalty assessment. Section 1456.0065 requires the Commissioner to appoint an advisory committee to study facility-based provider network adequacy of health benefit plans. The advisory committee is required to be composed of one or more physician representatives; one or more hospital representatives; one or more health benefit plan representatives to equal the total number of physician and hospital representatives; and one representative each from associations representing physicians, hospitals, and health benefit plans. The advisory committee is required to advise periodically and not later than December 1, 2008, the Governor, Lieutenant Governor, Speaker of the House of Representatives, Commissioner, and the Chairs of the standing committees of the Senate and House of Representatives that have primary jurisdiction over health benefit plans, of its findings. Chapter 1212 of the Insurance Code provides for the appointment and operation of the Technical Advisory Committee on Claims Processing. Section 1212.002 requires the Commissioner to consult with the technical advisory committee before adopting any rule related to the coding of health care services and claims development, submission, processing, adjudication, and payment, as well as the impact on those processes of contractual requirements and relationships, including relationships among employers, health benefit plans, insurers, health maintenance organizations, preferred provider organizations, electric clearinghouses, physicians and other health care providers, third-party administrators, independent physician associations and medical groups. Section 36.001 authorizes the Commissioner of Insurance to adopt any rules necessary and appropriate to implement the powers and duties of the Texas Department of Insurance under the Insurance Code and other laws of this state.
8. CROSS REFERENCE TO STATUTE.
The following statutes are affected by this proposal:Rule Statute
§§21.4601 - 21.4605 Insurance Code §1456.0065
§§21.4601 - 21.4605 Section 20 of Senate Bill (SB) 1731, as enacted by
the 80th Legislature, Regular Session, effective
September 1, 2007
9. TEXT.
§21.4601. Purpose. The purpose of this subchapter is to:
(1) prescribe the requirements for the information and data to be submitted to the department concerning the use of non-network providers by insureds and enrollees of health benefit plans subject to Chapter 1456 of the Insurance Code and the payments made to those providers, as required by section 20 of SB 1731, 80th Legislature, Regular Session, effective September 1, 2007 (section 20 of SB 1731); and
(2) facilitate the study of facility-based provider network adequacy of health benefit plans by the Advisory Committee on Health Network Adequacy appointed by the commissioner, as required by the Insurance Code §1456.0065.
§21.4602. Applicability.
(a) Pursuant to section 20 of SB 1731 and the Insurance Code §1456.002(a), this subchapter applies to issuers of:
(1) any health benefit plan that provides benefits for medical or surgical expenses incurred as a result of a health condition, accident, or sickness, including an individual, group, blanket, or franchise insurance policy or insurance agreement, a group hospital service contract, or an individual or group evidence of coverage that is offered by:
(A) an insurance company;
(B) a group hospital service corporation operating under the Insurance Code Chapter 842;
(C) a fraternal benefit society operating under the Insurance Code Chapter 885;
(D) a stipulated premium company operating under the Insurance Code Chapter 884;
(E) a health maintenance organization operating under the Insurance Code Chapter 843;
(F) a multiple employer welfare arrangement that holds a certificate of authority under the Insurance Code Chapter 846; or
(G) an approved nonprofit health corporation that holds a certificate of authority under the Insurance Code Chapter 844; or
(2) any health benefit plan that provides health and accident coverage through a risk pool created under Chapter 172, Local Government Code, notwithstanding §172.014, Local Government Code, or any other law.
(b) Pursuant to section 20 of SB 1731 and the Insurance Code §1456.002(b), this subchapter applies to any person to whom a health benefit plan contracts to process or pay claims, to obtain the services of physicians or other providers to provide health care services to insureds and enrollees, or to issue verifications or preauthorizations, including:
(1) a basic coverage plan under the Insurance Code Chapter 1551;
(2) a basic plan under the Insurance Code Chapter 1575;
(3) a basic plan under the Insurance Code Chapter 1578;
(4) a primary care coverage plan under the Insurance Code Chapter 1579; and
(5) a basic coverage plan under the Insurance Code Chapter 1601.
(c) Pursuant to the Insurance Code §1456.002(c), this subchapter does not apply to:
(1) Medicaid managed care programs operated under the Government Code Chapter 533;
(2) Medicaid programs operated under the Human Resources Code Chapter 32; or
(3) the state child health plan operated under the Health and Safety Code Chapters 62 or 63.
§21.4603. Requirement to Collect Information and Data.
(a) Each health benefit plan issuer identified in §21.4602(a) and (b) of this subchapter (relating to Applicability) shall collect the information and data specified in the Health Benefit Plan/Provider Contracting Practices Survey, Form No. LHL608, that is adopted by reference in §21.4605(a) of this subchapter (relating to Report Forms) and in the Health Benefit Plan Issuer Hospital Grid, Form No. LHL609, that is adopted by reference in §21.4605(b) of this subchapter and shall prepare and file information and data in accordance with the requirements in §21.4604 of this subchapter (relating to Submission of Information and Data).
(b) The 12-month reporting period for the information and data requested in the Health Benefit Plan/Provider Contracting Practices Survey form, including the data for the in-network and non-network claims for facility-based physicians, is calendar year 2007. The enrollment data required in the Health Benefit Plan/Provider Contracting Practices form and the Health Benefit Plan Issuer Hospital Grid form for private market plans, governmental employee plans, and Local Government Code Chapter 172 risk pools, is for the total number of lives covered under the plans as of September 1, 2008. The information and data requested in the Health Benefit Plan Issuer Hospital Grid form is to be based on the health benefit plan issuer's current practices and network arrangements.
§21.4604. Submission of Information and Data.
(a) Each health benefit plan issuer identified in §21.4602(a) and (b) of this subchapter (relating to Applicability) shall submit to the department the information and data required in the Health Benefit Plan/Provider Contracting Practices Survey, Form No. LHL608, that is adopted by reference in §21.4605(a) of this subchapter (relating to Report Forms) by no later than January 9, 2009, and the information and data required in the Health Benefit Plan Issuer Hospital Grid, Form No. LHL609, that is adopted by reference in §21.4605(b) of this subchapter by no later than January 9, 2009.
(b) The information and data filed pursuant to this section shall be filed electronically by accessing a link designated on the department's website, www.tdi.state.tx.us, and by emailing the completed forms to networkadequacy@tdi.state.tx.us.
(a) The commissioner adopts by reference the Health Benefit Plan/Provider Contracting Practices Survey form, Form No. LHL608, which contains instructions for completion of the form; requires information to be provided regarding health benefit plan issuer identification; and requires narrative responses to 16 questions relating to how health benefit plan issuers contract with providers and determine reimbursement rates. The form also requests in Question No. 17 individual health benefit plan issuer information for both in-network and non-network claims for facility-based physicians for calendar year 2007, including for each type of facility-based physician listed on the form (Anesthesiologist, Pathologist, Radiologist, Neonatologist, Emergency Department Physician) total claim units, total billed amount, and total allowed amount. The form is available at www.tdi.state.tx.us/forms/form10other.html.
(b) The commissioner adopts by reference the Health Benefit Plan Issuer Hospital Grid form, Form No. LHL609, which contains instructions for completion of the form; requires information to be provided regarding health benefit plan issuer identification; and requires information to be provided by each health benefit plan issuer regarding which hospitals are in-network facilities and for those hospitals, which in-network physician or physician practice groups have clinical privileges. The 281 hospitals listed in the form include every acute care hospital in the state with 100 or more beds and 20 percent of smaller acute care hospitals, as identified by the Texas Department of State Health Services. The form is available at www.tdi.state.tx.us/forms/form10other.html.