ADOPTED RULES An agency may take final action on a section 30 days after a proposal has been published in the Texas Register. The section becomes effective 20 days after the agency files the correct document with the Texas Register, unless a later date is specified or unless a federal statute or regulation requires implementation of the action on shorter notice. If an agency adopts the section without any changes to the proposed text, only the preamble of the notice and statement of legal authority will be published. If an agency adopts the section with changes to the proposed text, the proposal will be republished with the changes. TITLE 22. EXAMINING BOARDS Part I. Texas Board of Architectural Examiners Chapter 1. Architects Subchapter A. Scope; Definitions 22 TAC sec.sec.1.3, 1.5, 1.8 The Texas Board of Architectural Examiners adopts amendments to sec.sec.1.3, 1.5, and 1.8, concerning legislative changes from Administrative Procedure and Texas Register Act (APTRA) to Administrative Procedure Act (APA), without changes to the proposed text as published in the September 1, 1995, issue of the Texas Register (20 TexReg 6787). The rules are being amended to conform to the legislative changes. The rules will clarify terminology. No comments were received regarding adoption of the amendments. The amendments are adopted under the Texas Civil Statutes, Article 249a, which provide the Texas Board of Architectural Examiners with authority to promulgate rules. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on November 16, 1995. TRD-9514892 Cathy L. Hendricks, ASID/IIDA Executive Director Texas Board of Architectural Examiners Effective date: December 6, 1995 Proposal publication date: September 1, 1995 For further information, please call: (512) 305-8535 22 TAC sec.1.9 The Texas Board of Architectural Examiners adopts an amendment to sec.1.9, concerning signatures on expenditure vouchers, without changes to the proposed text as published in the October 3, 1995, issue of the Texas Register (20 TexReg 8055). This rule is being adopted to expedite voucher processing when the executive director is absent. This rule is being amended to expedite the processing of expenditure vouchers. No comments were received regarding adoption of the amendment. The amendment is adopted under Texas Civil Statutes, Article 249a, which provide the Texas Board of Architectural Examiners with authority to promulgate rules. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on November 17, 1995. TRD-9515006 Cathy L. Hendricks, ASID/IIDA Executive Director Texas Board of Architectural Examiners Effective date: December 8, 1995 Proposal publication date: October 3, 1995 For further information, please call: (512) 305-8535 Subchapter B. Registration 22 TAC sec.sec.1.21, 1.23, 1.25 The Texas Board of Architectural Examiners adopts amendments to sec.sec.1.21, 1.23, and 1.25, to avoid duplication of applications, without changes to the proposed text as published in the October 3, 1995, issue of the Texas Register (20 TexReg 8056). These rules are being amended to prevent applicants submitting the same material to the board office and the National Council of Architectural Registration Boards. These rules will clarify confusing terminology and duplication of applications. No comments were received regarding adoption of the amendments. The amendments are adopted under the Texas Civil Statutes, Article 249a, which provide the Texas Board of Architectural Examiners with authority to promulgate rules. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on November 17, 1995. TRD-9515007 Cathy L. Hendricks, ASID/IIDA Executive Director Texas Board of Architectural Examiners Effective date: December 8, 1995 Proposal publication date: October 3, 1995 For further information, please call: (512) 305-8535 Subchapter C . Examinations 22 TAC sec.1.45 The Texas Board of Architectural Examiners adopts an amendment to sec.1.45, concerning the conditions for administration of the Architect Registration Examination, without changes to the proposed text as published in the October 3, 1995, issue of the Texas Register (20 TexReg 8056). This rule is being amended to clarify the process if the results of the examination cannot be provided to the candidate. This rule will provide the candidates with the retake of examination process should the agency be unable to provide examination results. No comments were received regarding adoption of the amendment. The amendment is adopted under the Texas Civil Statutes, Article 249a, which provide the Texas Board of Architectural Examiners with authority to promulgate rules. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on November 17, 1995. TRD-9515001 Cathy L. Hendricks, ASID/IIDA Executive Director Texas Board of Architectural Examiners Effective date: December 8, 1995 Proposal publication date: October 3, 1995 For further information, please call: (512) 305-8535 Subchapter I. Charges Against Architects: Action 22 TAC sec.1.165, sec.1.174 The Texas Board of Architectural Examiners adopts amendments to sec.1.165 and sec.1.174, concerning legislative changes from Administrative Procedure and Texas Register Act (APTRA) to Administrative Procedure Act (APA), without changes to the proposed text as published in the September 1, 1995, issue of the Texas Register 20 TexReg 6787). The rules are being amended to conform to the legislative changes. The rules will clarify terminology. No comments were received regarding adoption of the amendments. The amendments are adopted under the Texas Civil Statutes, Article 249a, which provide the Texas Board of Architectural Examiners with authority to promulgate rules. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on November 16, 1995. TRD-9514893 Cathy L. Hendricks, ASID/IIDA Executive Director Texas Board of Architectural Examiners Effective date: December 6, 1995 Proposal publication date: September 1, 1995 For further information, please call: (512) 305-8535 Chapter 3. Landscape Architects Subchapter A. Scope; Definitions 22 TAC sec.sec.3.3, 3.5, 3.8 The Texas Board of Architectural Examiners adopts amendments to sec.sec.3.3, 3.5, and 3.8, concerning legislative changes from Administrative Procedure and Texas Register Act (APTRA) to Administrative Procedure Act (APA), without changes to the proposed text as published in the September 1, 1995, issue of the Texas Register (20 TexReg 6788). The rules are being amended to conform to the legislative changes. The rules will clarify terminology. No comments were received regarding adoption of the amendments. The amendments are adopted under the Texas Civil Statutes, Article 249c, which provide the Texas Board of Architectural Examiners with authority to promulgate rules consistent with the Code. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on November 16, 1995. TRD-9514890 Cathy L. Hendricks, ASID/IIDA Executive Director Texas Board of Architectural Examiners Effective date: December 6, 1995 Proposal publication date: September 1, 1995 For further information, please call: (512) 305-8535 22 TAC sec.3.9 The Texas Board of Architectural Examiners adopts an amendment to sec.3.9, concerning signatures on expenditure vouchers, without changes to the proposed text as published in the October 3, 1995, issue of the Texas Register (20 TexReg 8057). This rule is being amended to expedite voucher processing when the executive director is absent. This rule will expedite the processing of expenditure vouchers. No comments were received regarding adoption of the amendment. The amendment is adopted under Texas Civil Statutes, Article 249c, which provide the Texas Board of Architectural Examiners with authority to promulgate rules. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on November 17, 1995. TRD-9515010 Cathy L. Hendricks, ASID/IIDA Executive Director Texas Board of Architectural Examiners Effective date: December 8, 1995 Proposal publication date: October 3, 1995 For further information, please call: (512) 305-8535 Subchapter C. Written Examinations 22 TAC sec.3.45 The Texas Board of Architectural Examiners adopts an amendment to sec.3.45, concerning the conditions for administration of the Landscape Architect Registration Examination, without changes to the proposed text as published in the October 3, 1995, issue of the Texas Register (20 TexReg 8057). This rule is being amended to clarify the process if the results of the examination cannot be provided to the candidate. This rule will provide candidates with the retake of examination process should the agency be unable to provide examination results. No comments were received regarding adoption of the amendment. The amendment is adopted under the Texas Civil Statutes, Article 249c, which provide the Texas Board of Architectural Examiners with authority to promulgate rules. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on November 17, 1995. TRD-9515002 Cathy L. Hendricks, ASID/IIDA Executive Director Texas Board of Architectural Examiners Effective date: December 8, 1995 Proposal publication date: October 3, 1995 For further information, please call: (512) 305-8535 Subchapter C. Written Examinations 22 TAC sec.3.46 The Texas Board of Architectural Examiners adopts an amendment to sec.3.46, concerning examination review for landscape architectural candidates, without changes to the proposed text as published in the September 1, 1995, issue of the Texas Register (20 TexReg 6788). The rule is being amended to conform to the Council of Landscape Architectural Registration Boards requirements. The rule will clarify confusing terminology. No comments were received regarding adoption of the amendment. The amendment is adopted under the Texas Civil Statutes, Article 249c, which provide the Texas Board of Architectural Examiners with authority to promulgate rules. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on November 16, 1995. TRD-9514889 Cathy L. Hendricks, ASID/IIDA Executive Director Texas Board of Architectural Examiners Effective date: December 6, 1995 Proposal publication date: September 1, 1995 For further information, please call: (512) 305-8535 Subchapter E. Fees 22 TAC sec.3.86 The Texas Board of Architectural Examiners adopts an amendment to sec.3.86, regarding Reciprocal Transfer fees, without changes to the proposed text as published in the October 3, 1995, issue of the Texas Register (20 TexReg 9057). This rule is being amended to increase revenue for increased appropriations. This rule will allow the agency to be more responsive to requests from the public due to the upgrading of the information resources system and allow the agency to furnish the public updated consumer information. No comments were received regarding adoption of the amendment. The amendment is adopted under the Texas Civil Statutes, Article 249c, which provide the Texas Board of Architectural Examiners with authority to promulgate rules. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on November 17, 1995. TRD-9515012 Cathy L. Hendricks, ASID/IIDA Executive Director Texas Board of Architectural Examiners Effective date: December 8, 1995 Proposal publication date: October 3, 1995 For further information, please call: (512) 305-8535 Subchapter I. Charges Against Landscape Architects: Action 22 TAC sec.3.161, sec.3.164 The Texas Board of Architectural Examiners adopts amendments to sec.3.161, and sec.3.164, concerning legislative changes from Administrative Procedure and Texas Register Act (APTRA) to Administrative Procedure Act (APA), without changes to the proposed text as published in the September 1, 1995, issue of the Texas Register (20 TexReg 6789). The rules are being amended to conform to the legislative changes. The rules will clarify terminology. No comments were received regarding adoption of the amendments. The amendments are adopted under the Texas Civil Statutes, Article 249c, which provide the Texas Board of Architectural Examiners with authority to promulgate rules consistent with the code. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on November 16, 1995. TRD-9514891 Cathy L. Hendricks, ASID/IIDA Executive Director Texas Board of Architectural Examiners Effective date: December 6, 1995 Proposal publication date: September 1, 1995 For further information, please call: (512) 305-8535 Chapter 5. Interior Designers Subchapter A. Scope; Definitions 22 TAC sec.sec.5.3, 5.5, 5.8 The Texas Board of Architectural Examiners adopts amendments to sec.sec.5.3, 5.5, and 5.8, concerning legislative changes from Administrative Procedure and Texas Register Act (APTRA) to Administrative Procedure Act (APA), without changes to the proposed text as published in the September 1, 1995, issue of the Texas Register (20 TexReg 6789). The rules are being amended to conform to the legislative changes. The rules will clarify terminology. No comments were received regarding adoption of the amendments. The amendments are adopted under the Texas Civil Statutes, Article 249e, which provide the Texas Board of Architectural Examiners with authority to promulgate rules. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on November 16, 1995. TRD-9514894 Cathy L. Hendricks, ASID/IIDA Executive Director Texas Board of Architectural Examiners Effective date: December 6, 1995 Proposal publication date: September 1, 1995 For further information, please call: (512) 305-8535 22 TAC sec.5.9 The Texas Board of Architectural Examiners adopts an amendment to sec.5.9, concerning signatures on expenditure vouchers, without changes to the proposed text as published in the October 3, 1995, issue of the Texas Register (20 TexReg 8058). This rule is being amended to expedite voucher processing when the executive director is absent. This rule will expedite processing of vouchers. No comments were received regarding adoption of the amendment. The amendment is adopted under the Texas Civil Statutes, Article 249e, which provide the Texas Board of Architectural Examiners with authority to promulgate rules. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on November 17, 1995. TRD-9515008 Cathy L. Hendricks, ASID/IIDA Executive Director Texas Board of Architectural Examiners Effective date: December 8, 1995 Proposal publication date: October 3, 1995 For further information, please call: (512) 305-8535 Subchapter C. Examinations 22 TAC sec.5.55 The Texas Board of Architectural Examiners adopts an amendment to sec.5.55, concerning the conditions for administration of the National Council for Interior Design Qualification, without changes to the proposed text as published in the October 3, 1995, issue of the Texas Register (20 TexReg 8058). This rule is being amended to clarify the process if the results of the examination cannot be provided for the candidate. This rule will provide candidates with the retake of examination process should the agency be unable to provide examination results. No comments were received regarding adoption of the amendment. The amendment is adopted under Texas Civil Statutes, Article 249e, which provide the Texas Board of Architectural Examiners with the authority to promulgate rules. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on November 17, 1995. TRD-9515005 Cathy L. Hendricks, ASID/IIDA Executive Director Texas Board of Architectural Examiners Effective date: December 8, 1995 Proposal publication date: October 3, 1995 For further information, please call: (512) 305-8535 Subchapter E. Fees 22 TAC sec.5.92 The Texas Board of Architectural Examiners adopts the repeal of sec.5.92, regarding registration without examination fee, without changes as published in the October 3, 1995, issue of the Texas Register (20 TexReg 8058). This repeal is necessary to comply with the cut off date of August 31, 1994 set by the Texas State Legislature for Grandfather applications. This rule will require all future candidates to pass the registration exam to better protect the public health, safety and welfare. No comments were received regarding adoption of the repeal. The repeal is adopted under Texas Civil Statutes, Article 249e, which provide the Texas Board of Architectural Examiners with authority to promulgate rules. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on November 17, 1995. TRD-9515009 Cathy L. Hendricks, ASID/IIDA Executive Director Texas Board of Architectural Examiners Effective date: December 8, 1995 Proposal publication date: October 3, 1995 For further information, please call: (512) 305-8535 22 TAC sec.5.93 The Texas Board of Architectural Examiners adopts an amendment to sec.5.93, regarding application and examination fees, without changes to the proposed text as published in the October 3, 1995, issue of the Texas Register (20 TexReg 8059). This rule is being amended to increase the fees the agency must charge in order to increase revenue for increased appropriations. This rule will allow the agency to be more responsive to requests from the public due to the upgrading of the information resources system and allow the agency to process information more efficiently. No comments were received regarding adoption of the amendment. The amendment is adopted under the Texas Civil Statutes, Article 249e, which provide the Texas Board of Architectural Examiners with authority to promulgate rules. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on November 17, 1995. TRD-9515011 Cathy L. Hendricks, ASID/IIDA Executive Director Texas Board of Architectural Examiners Effective date: December 8, 1995 Proposal publication date: October 3, 1995 For further information, please call: (512) 305-8535 22 TAC sec.5.97 The Texas Board of Architectural Examiners adopts an amendment to sec.5.97, regarding reciprocal transfer fees, without changes to the proposed text as published in the October 3, 1995, issue of the Texas Register (20 TexReg 8059). This rule is being amended to increase the fees the agency must charge in order to increase revenue for increased appropriations. This rule will allow the agency to be more responsive to requests from the public due to the upgrading of the information resources system and allow the agency to process information more efficiently. No comments were received regarding adoption of the amendment. The amendment is adopted under the Texas Civil Statutes, Article 249e, which provide the Texas Board of Architectural Examiners with authority to promulgate rules. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on November 17, 1995. TRD-9515013 Cathy L. Hendricks, ASID/IIDA Executive Director Texas Board of Architectural Examiners Effective date: December 8, 1995 Proposal publication date: October 3, 1995 For further information, please call: (512) 305-8535 Subchapter I. Charges Against Interior Designers: Action 22 TAC sec.5.174 The Texas Board of Architectural Examiners adopts an amendment to sec.5. 174, to reflect legislative changes from Administrative Procedure and Texas Register Act (APTRA) to Administrative Procedure Act (APA), without changes to the proposed text as published in the September 1, 1995, issue of the Texas Register (20 TexReg 6789). The rule is being amended to conform to the legislative changes. No comments were received regarding adoption of the amendment. The amendment is adopted under the Texas Civil Statutes, Article 249e, which provide the Texas Board of Architectural Examiners with authority to promulgate rules. Issued in Austin, Texas, on November 16, 1995. TRD-9514895 Cathy L. Hendricks, ASID/IIDA Executive Director Texas Board of Architectural Examiners Effective date: December 6, 1995 Proposal publication date: September 1, 1995 For further information, please call: (512) 305-8535 Part XII. Board of Vocational Nurse Examiners Chapter 231. Administration General Provisions 22 TAC sec.231.1 The Board of Vocational Nurse Examiners adopts an amendment to sec.231.1, relative to definitions, without changes to the proposed text as published in the September 22, 1995, issue of the Texas Register (20 TexReg 7572). The rule is amended to add definitions for the term "current license" and "delinquent license". The definitions will clarify these terms for individuals applying for licensure. No comments were received regarding adoption of the amendment. The amendment is adopted under Texas Civil Statutes, Article 4528c, sec.5(h), which provide the Board of Vocational Nurse Examiners with the authority to make such rules and regulations as may be necessary to carry in effect the purposes of the law. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on November 17, 1995. TRD-9514964 Marjorie A. Bronk Executive Director Board of Vocational Nurse Examiners Effective date: December 8, 1995 Proposal publication date: September 22, 1995 For further information, please call: (512) 835-2071 Chapter 233. Education Vocational Nursing Education Standards 22 TAC sec.233.65 The Board of Vocational Nurse Examiners adopts an amendment to sec.233.65, relative to admission criteria, without changes to the proposed text as published in the September 22, 1995, issue of the Texas Register (20 TexReg 7572). The rule is adopted to comply with changes in the Vocational Nurse Act. Each school already sets there own education requirements for admission and the amendment of this rule will make it consistent with those of the schools. No comments were received regarding adoption of the amendment. The amendment is adopted under Texas Civil Statutes, Article 4528c, sec.5(h), which provide the Board of Vocational Nurse Examiners with the authority to make such rules and regulations as may be necessary to carry in effect the purposes of the law. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on November 17, 1995. TRD-9514965 Marjorie A. Bronk Executive Director Board of Vocational Nurse Examiners Effective date: December 8, 1995 Proposal publication date: September 22, 1995 For further information, please call: (512) 835-2071 Chapter 235. Licensing Issuance of Licenses 22 TAC sec.235.48 The Board of Vocational Nurse Examiners adopts an amendment to sec.235.48, relative to reactivation of a license, without changes to the proposed text as published in the September 22, 1995, issue of the Texas Register (20 TexReg 7252). The rule is amended to comply with changes in the Vocational Nurse Act and to make rules consistent. The amendment will assure that nurses who have not practice for specific periods of time will have to go back to school and/or re-test prior to renewing their license. No comments were received regarding adoption of the amendment. The amendment is adopted under Texas Civil Statutes, Article 4528c, sec.5(h), which provide the Board of Vocational Nurse Examiners with the authority to make such rules and regulations as may be necessary to carry in effect the purposes of the law. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on November 17, 1995. TRD-9514966 Marjorie A. Bronk Executive Director Board of Vocational Nurse Examiners Effective date: December 8, 1995 Proposal publication date: September 22, 1995 For further information, please call: (512) 835-2071 Chapter 237. Continuing Education Continuing Education 22 TAC sec.237.19 The Board of Vocational Nurse Examiners adopts an amendment to sec.237.19, relative to relicensure process, without changes to the proposed text as published in the September 29, 1995, issue of the Texas Register (20 TexReg 7917). The rule is amended to create consistency in the rules and to comply with changes in the statute. No comments were received regarding adoption of the amendment. The amendment is adopted under Texas Civil Statutes, Article 4528c, sec.5(h), which provide the Board of Vocational Nurse Examiners with the authority to make such rules and regulations as may be necessary to carry in effect the purposes of the law. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on November 17, 1995. TRD-9514968 Marjorie A. Bronk Executive Director Board of Vocational Nurse Examiners Effective date: December 8, 1995 Proposal publication date: September 29, 1995 For further information, please call: (512) 835-2071 Chapter 239. Contested Case Procedure Definitions 22 TAC sec.239.1 The Board of Vocational Nurse Examiners adopts an amendment to sec.239.1, relating to definitions of language as used in the Rules and Regulations, without changes to the proposed text as published in the September 22, 1995, issue of the Texas Register (20 TexReg 7573). The rule is amended to reflect changes in the Vocational Nurse Act and for consistency with other sections of the rules and regulations. No comments were received regarding adoption of the amendment. The amendment is adopted under Texas Civil Statutes, Article 4528c, sec.5(h), which provide the Board of Vocational Nurse Examiners with the authority to make such rules and regulations as may be necessary to carry in effect the purposes of the law. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on November 17, 1995. TRD-9514967 Marjorie A. Bronk Executive Director Board of Vocational Nurse Examiners Effective date: December 8, 1995 Proposal publication date: September 22, 1995 For further information, please call: (512) 835-2071 Enforcement 22 TAC sec.sec.239.11-239.13 The Board of Vocational Nurse Examiners adopts amendments to sec.239.11, relating to Unprofessional Conduct, sec.239.12, relating to Licensure of Persons With Criminal Convictions, and sec.239.13, relating to Licensure of Persons With a History of Psychiatric Episodes, without changes to the proposed text as published in the September 29, 1995, issue of the Texas Register (20 TexReg 7918). Section 239.11 is amended to clarify the language and to eliminate excessive wording. Section 239.12 is amended to comply with the changes in the Vocational Nurse Act. Section 239.13 is amended for clarity. Section 239.12 relating to Licensure of Persons With Criminal Convictions will become effective January 1, 1996. However, students enrolled in a vocational nursing program who graduate prior to December 31, 1996, will be reviewed under the rules in effect prior to January 1, 1996. No comments were received regarding adoption of the amendments. The amendments are adopted under Texas Civil Statutes, Article 4528c(h), sec.5(h), which provide the Board of Vocational Nurse Examiners with the authority to make such rules and regulations as may be necessary to carry in effect the purposes of the law. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on November 17, 1995. TRD-9514969 Marjorie A. Bronk Executive Director Board of Vocational Nurse Examiners Effective date for sec.239.11 and sec.239.13: December 8, 1995 Effective date for sec.239.12: January 1, 1996 Proposal publication date: September 29, 1995 For further information, please call: (512) 835-2071 Hearings Process 22 TAC sec.sec.239.29-239.33 The Board of Vocational Nurse Examiners adopts the repeals of sec.239.29, relating to continuance, sec.239.30, relating to Computation of Time, sec.239.31, relating to Probation, sec.239.32, relating to Records Retention Schedule, and sec.239.33, relating to Release of Information, without changes to the proposed text as published in the September 29, 1995, issue of the Texas Register (20 TexReg 7920). These rules are being repealed to allow for the adoption of new rules in compliance with the Vocational Nurse Act as amended during the 74th Legislative Session and for re-numbering purposes. No comments were received regarding adoption of the repeals. The repeals are adopted under Texas Civil Statutes, Article 4528c, sec.5(h), which provide the Board of Vocational Nurse Examiners with the authority to make such rules and regulations as may be necessary to carry in effect the purposes of the law. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on November 17, 1995. TRD-9514970 Marjorie A. Bronk Executive Director Board of Vocational Nurse Examiners Effective date: December 8, 1995 Proposal publication date: September 29, 1995 For further information, please call: (512) 835-2071 22 TAC sec.sec.239.29-239.36 The Board of Vocational Nurse Examiners adopts new sec.239.29, relating to Continuance, sec.239.30, relating to Entry of Appearance; Continuance, sec.239. 31, relating to Failure to Attend Hearing, sec.239.32, relating to Computation of Time, sec.239.33, relating to Probation, sec.239.34, relating to Records Retention Schedule, sec.239.35, relating to Release of Information, and sec.239. 36, relating to Temporary Suspensions, without changes to the proposed text as published in the September 29, 1995, issue of the Texas Register (20 TexReg 7920). The new rules are adopted for clarity, for compliance with the Vocational Nurse Act, as amended during the 74th Legislative Session, and for renumbering of certain rules. No comments were received regarding adoption of the new sections. The new sections are adopted under Texas Civil Statutes, Article 4528c, sec.5(h), which provide the Board of Vocational Nurse Examiners with the authority to make such rules and regulations as may be necessary to carry in effect the purposes of the law. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on November 17, 1995. TRD-9514971 Marjorie A. Bronk Executive Director Board of Vocational Nurse Examiners Effective date: December 8, 1995 Proposal publication date: September 29, 1995 For further information, please call: (512) 835-2071 Reinstatement Process 22 TAC sec.239.51, sec.239.53 The Board of Vocational Nurse Examiners adopts amendments to sec.239.51, relating to Application for Reinstatement of License and sec.239.53, relating to Procedure Upon Request for Reinstatement, without changes to the proposed text as published in the October 17, 1995, issue of the Texas Register (20 TexReg 8386). Section 239.51 is being amended for consistency with other rules that have been amended. Section 239.53 is being amended to clarify information required in psychiatric, psychological or medical evaluations. No comments were received regarding adoption of the amendments. The amendments are adopted under Texas Civil Statutes, Article 4528c(h), sec.5(h), which provide the Board of Vocational Nurse Examiners with the authority to make such rules and regulations as may be necessary to carry in effect the purposes of the law. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on November 17, 1995. TRD-9514972 Marjorie A. Bronk Executive Director Board of Vocational Nurse Examiners Effective date: December 8, 1995 Proposal publication date: October 17, 1995 For further information, please call: (512) 835-2071 Part XXX. Texas State Board of Examiners of Perfusionists Chapter 761. Perfusionists 22 TAC sec.sec.761.2, 761.7, 61.9, 761.10, 761.13, 761.20 The Texas State Board of Examiners of Perfusionists (board) adopts amendments to sec.sec.761.2, 761.7, 761.9, 761.10, and 761.13 and new sec.761.20, concerning licensed perfusionists and provisional licensed perfusionists. Section 761.20 is adopted with changes to the proposed text as published in the September 15, 1995, issue of the Texas Register (20 TexReg 7259). Sections 761.2, 761.7, 761.9, 761.10, and 761.13 are adopted without changes to the proposed text as published in the September 15, 1995, issue of the Texas Register (20 TexReg 7258) and will not be republished. Specifically, the amendments establish a fee for reinstatement of a license suspended for failure to pay child support; permit a licensed physician to supervise provisional licensed perfusionist with board approval; extend the grandfather period for application; establishes procedures for suspension of a license for failure to pay child support under the Family Code, Chapter 232 as added by Acts 1995, 74th Legislature, Chapter 751, sec.85 (HB433). The amendments and new section assure that the regulation of perfusionists continues to identify competent practitioners. No comments were received regarding the proposed amendments or the new section. However, a change was made to sec.761.20(h). The reference to subsection (g) was incorrect. The correct reference for the reinstatement fee is sec.761.2(s)(2)(F). The amendments and new sections are adopted under the Licensed Perfusionists Act, Texas Civil Statutes, Article 4529e, sec.7, which provide the Texas State Board of Examiners of Perfusionists with the authority to adopt rules concerning the regulation and licensure of perfusionists. sec.761.20. Suspension of License for Failure to Pay Child Support. (a) On receipt of a final court or attorney general's order suspending a license due to failure to pay child support, the executive secretary shall immediately determine if the board has issued a license to the obligator named on the order. If a license has been issued, the executive secretary shall: (1) record the suspension of the license in the board's records; (2) report the suspension as appropriate; and (3) demand surrender of the suspended license. (b) The board shall implement the terms of a final court or attorney general's order suspending a license without additional review or hearing. The board will provide notice as appropriate to the licensee or to others concerned with the license. (c) The board may not modify, remand, reverse, vacate, or stay a court or attorney general's order suspending a license issued under the Family Code, Chapter 232 as added by Acts 1995, 74th Legislature Chapter 751, sec.85 (HB 433) and may not review, vacate, or reconsider the terms of an order. (d) A licensee who is the subject of a final court or attorney general's order suspending his or her license is not entitled to a refund for any fee paid to the board. (e) If a suspension overlaps a license renewal period, an individual with a license suspended under this section shall comply with the normal renewal procedures in the Act and this chapter; however, the license will not be renewed until subsections (g) and (h) of this section are met. (f) An individual who continues to use the titles "licensed perfusionist" or "provisional licensed perfusionist" after the issuance of a court or attorney general's order suspending the license is liable for the same civil and criminal penalties provided for engaging in the prohibited activity without a license or while a license is suspended as any other license holder of the board. (g) On receipt of a court or attorney general's order vacating or staying an order suspending a license, the executive secretary shall promptly issue the affected license to the individual if the individual is otherwise qualified for the license. (h) The individual must pay a reinstatement fee set out at sec.761.2(S)(w)(F) of this title (relating to The Board's Operation) prior to issuance of the license. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on November 17, 1995. TRD-9515029 Shannon E. Ballard Chairman Texas State Board of Examiners of Perfusionists Effective date: December 11, 1995 Proposal publication date: September 15, 1995 For further information, please call: (512) 458-7236 TITLE 25. HEALTH SERVICES Part I. Texas Department of Health Chapter 29. Purchased Health Services On behalf of the State Medicaid Director, the Texas Department of Health (department) adopts amendments to sec.sec.29.601, 29.1104, 29.1126, and 29.1127, concerning purchased health services, without changes to the proposed text as published in the August 22, 1995, issue of the Texas Register (20 TexReg 6391). The sections are amended to address cost-of-living adjustments applicable to reimbursements for hospital, in-home total parenteral hyperalimentation, in-home respiratory therapy services, and the Texas Medicaid reimbursement methodology which applies to physician and physician-related services. The sections specifically address cost-of-living adjustments during the 1996-1997 state biennium. The sections specify in sec.29.601 that outpatient hospital services will be reimbursed at 83.65% of cost during fiscal year 1996 and 77.6% of cost during fiscal year 1997. Based on appropriated funding, outpatient hospital rates continue to be reduced by approximately 5.0% per year which results in the compounded percentages indicated above. The amendments to sec.sec.29.1104, 29.1126, and 29.1127 remove references to the governor's cost containment provisions which expire August 31, 1995. The existing language stipulates future cost-of-living adjustments (COLAs) and will be dependent on available funding. A summary of the comments and the department's responses to the comments is as follows. Comment: The commenter recognizes that the proposed rules are taken by the department in order to comply with the limitations of the 1996-1997 appropriations adopted by the 74th Legislature, however, the commenter has not been able to identify any legislative action or any appropriation rider approved by the legislature that mandates the department to extend the discount into the current biennium. Furthermore, the commenter suggests that the legislature has made it clear in the past that access to cost-effective preventive and primary care services should be maintained and enhanced to the greatest extent possible. Response: The department agrees with the commenter that the 1996-1997 appropriations did not include a rider that mandates the department to extend the discount into the current biennium. However, the department is required to comply with the appropriations established for the next biennium, and these appropriations do not allow the department to maintain reimbursement rates at current levels. Comment: In regard to sec.29.601(a)(2) regarding payments for outpatient hospital services, the commenter expressed concern with the amount of the discount calculated by the department. The commenter estimates that the actual discount factor for outpatient hospital services is more than 7.0% per year rather than the 5.0% estimated by the department. The commenter requested that the department provide a detailed description of how the discount factors were computed. Response: The department states that the rates continue to be reduced by approximately 5.0% per year which results in the compounded percentages of 83. 65% for fiscal year 1996 and 77.6% for fiscal year 1997. It is the compounding effect of the discounting over the entire period that causes the discount applied in the final year to be slightly more than 7.0%. This estimate, while perhaps inappropriate on an individual hospital basis, is in keeping with the overall historical price behavior of this environment. The department will provide the commenter with the mathematical method of discounting to arrive at the stated percentages, however, no change will be made to the section as a result of the comment. Comment: The commenter requests that the emergency rules published in the August 22, 1995, issue of the Texas Register be withdrawn and that the outpatient payment discount factor be eliminated for all outpatient services provided on or after September 1, 1995. Response: As previously stated, the department must fund services based on the appropriations established by the legislature. In order to remain within these funding levels, the department must implement the reimbursement rates at the stated percentages. No change will be made as a result of the comment. Comments were received from the Texas Hospital Association (THA) against the amendments. Subchapter G. Hospital Services 25 TAC sec.29.601 The amendment is adopted under the Human Resources Code, sec.32.021 and Texas Civil Statutes, Article 4413(502), sec.16, which provide the Health and Human Services Commission with the authority to adopt rules to administer the state's medical assistance program and are submitted by the Texas Department of Health under its agreement with the Health and Human Services Commission to operate the purchased health services program and authorized under Chapter 15, sec.1.07, Acts of the 72nd Legislature, First Called Session (1991). This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on November 16, 1995. TRD-9514904 Susan K. Steeg General Counsel Texas Department of Health Effective date: December 7, 1995 Proposal publication date: August 22, 1995 For further information, please call: (512) 458-7236 Subchapter L. General Administration 25 TAC sec.sec.29.1104, 29.1126, 29.1127 The amendments are adopted under the Human Resources Code, sec.32.021 and Texas Civil Statutes, Article 4413(502), sec.16, which provide the Health and Human Services Commission with the authority to adopt rules to administer the state's medical assistance program and are submitted by the Texas Department of Health under its agreement with the Health and Human Services Commission to operate the purchased health services program and authorized under Chapter 15, sec.1.07, Acts of the 72nd Legislature, First Called Session (1991). This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on November 16, 1995. TRD-9514905 Susan K. Steeg General Counsel Texas Department of Health Effective date: December 7, 1995 Proposal publication date: August 22, 1995 For further information, please call: (512) 458-7236 Chapter 40. Medical Transportation On behalf of the State Medicaid Director, the Texas Department of Health (department) adopts amendments to sec.sec.40.1, 40.101, 40.103, 40.202, and 40.401, concerning medical transportation services, without changes to the proposed text as published in the August 15, 1995, issue of the Texas Register (20 TexReg 6191). Currently, medical transportation providers (MTP) are reimbursed for transporting Medicaid clients to and from allowable medical services at a rate of $.15 per mile, as established by the MTP program. The amendments will increase the mileage reimbursement rate for MTP providers to the rate established by the legislature for state employees; and authorize transportation of a client to and from a provider of services that meet the client's medical needs and who is located reasonably close to the client, whether the provider is located in the client's county of residence or elsewhere. The amendments also clarify that all Medicaid recipients up to age 21 and their attendants may be eligible for meals and lodging under the Early Periodic, Screening, Diagnosis, and Treatment Program (EPSDT). These sections as amended will improve access to medical transportation services for Medicaid clients. No comments were received during the public comment period. Program Overview 25 TAC sec.40.1 The amendment is adopted under the Human Resources Code, sec.32.021 and Texas Civil Statutes, Article 4413(502), sec.16, which authorize the Health and Human Services Commission to adopt rules to administer the state's medical assistance program, and are submitted to the Texas Department of Health under its agreement with the Health and Human Services Commission to operate the medical transportation program as authorized under Chapter 15, sec.1.07, Acts of the 72nd Legislature, First Called Session (1991). This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on November 16, 1995. TRD-9514900 Susan K. Steeg General Counsel Texas Department of Health Effective date: December 7, 1995 Proposal publication date: August 15, 1995 For further information, please call: (512) 458-7236 Eligibility for Program Services 25 TAC sec.40.101, sec.40.103 The amendments are adopted under the Human Resources Code, sec.32.021 and Texas Civil Statutes, Article 4413(502), sec.16, which authorize the Health and Human Services Commission to adopt rules to administer the state's medical assistance program, and are submitted to the Texas Department of Health under its agreement with the Health and Human Services Commission to operate the medical transportation program as authorized under Chapter 15, sec.1.07, Acts of the 72nd Legislature, First Called Session (1991). This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on November 16, 1995. TRD-9514901 Susan K. Steeg General Counsel Texas Department of Health Effective date: December 7, 1995 Proposal publication date: August 15, 1995 For further information, please call: (512) 458-7236 Program Services Limitations 25 TAC sec.40.202 The amendment is adopted under the Human Resources Code, sec.32.021 and Texas Civil Statutes, Article 4413(502), sec.16, which authorize the Health and Human Services Commission to adopt rules to administer the state's medical assistance program, and are submitted to the Texas Department of Health under its agreement with the Health and Human Services Commission to operate the medical transportation program as authorized under Chapter 15, sec.1.07, Acts of the 72nd Legislature, First Called Session (1991). This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on November 16, 1995. TRD-9514902 Susan K. Steeg General Counsel Texas Department of Health Effective date: December 7, 1995 Proposal publication date: August 15, 1995 For further information, please call: (512) 458-7236 Payment Procedures and Recordkeeping 25 TAC sec.40.401 The amendment is adopted under the Human Resources Code, sec.32.021 and Texas Civil Statutes, Article 4413(502), sec.16, which authorize the Health and Human Services Commission to adopt rules to administer the state's medical assistance program, and are submitted to the Texas Department of Health under its agreement with the Health and Human Services Commission to operate the medical transportation program as authorized under Chapter 15, sec.1.07, Acts of the 72nd Legislature, First Called Session (1991). This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on November 16, 1995. TRD-9514903 Susan K. Steeg General Counsel Texas Department of Health Effective date: December 7, 1995 Proposal publication date: August 15, 1995 For further information, please call: (512) 458-7236 TITLE 28. INSURANCE Part I. Texas Department of Insurance Chapter 3. Life, Accident and Health Insurance and Annuities Subchapter X. Preferred Provider Plans 28 TAC sec.sec.3.3701-3.3705 The Texas Department of Insurance adopts amendments to sec.sec.3.3701-3.3705, concerning health insurance policies that incorporate preferred provider plans, with changes to the proposed text as published in the July 25, 1995 issue of the Texas Register (20 TexReg 5471). These amendments address the Governor's directive that the Commissioner of Insurance enact rules to maintain quality of health care for all Texans at affordable prices and to establish procedures for fairness to health care providers. Protection of patients in the rapidly changing health care marketplace requires these updated regulations. These amendments are necessary to assist consumers in making informed choices among health care plans; to prohibit retaliation against insureds for filing complaints or appealing decisions, to provide for continuity of patient care; to provide for reimbursement for medically necessary emergency care services; to provide fairness to physicians and providers not designated as preferred providers or terminated from the preferred provider plan; and to assist the department in evaluating quality and costs of health care. The rules as adopted differ in some respects from the proposed rules as published based on further study generated by comments received. Specific changes and reasoned justification for the rule amendments and agency responses to comments are addressed in sec.4, Summary of Comments. The amendments to this subchapter shall become effective December 6, 1995. Section 3.3701, as amended, states that these rules do not create a private cause of action, deletes provisions concerning physicians and practitioners and adds a severability provision. Section 3.3702 adds a definition of emergency care, changes the definition of health care provider and practitioner, adds a definition of prospective insured and changes the definition of utilization review. Section 3.3703 amends the existing requirement for a physician panel to review denial of a designation as a preferred provider by adding that the panel is to include, if available, one member in the same or similar specialty as the physician being reviewed and requiring that the panel's and insurer's determinations be provided to the affected physician upon request. The section also requires insurers to make application information available to prospective preferred providers. The section also adds a provision restricting financial incentives to providers which would act as an inducement to limit medically necessary services. Amendments to sec.3.3703 also clarify the ability of the department to obtain information from insurers to assess accessibility, affordability, quality and costs of health care. Amendments to sec.3.3704 enhance freedom of choice for the insured relating to continuity of care by requiring an insurer to provide reasonable advance notice and to make a current list of preferred providers available to an insured upon termination of a participating provider. The section provides for continuity of ongoing treatment for patients with special circumstances for up to 90 days after the effective date of termination of the treating physician or provider. Amendments to sec.3.3704 also require the insurer to reimburse at the preferred provider rate level of benefits for certain necessary emergency care services. Amended sec.3.3704 also enhances freedom of choice by assisting prospective insureds in making informed choices when selecting health care plans. The section requires insurers to disclose certain information about the plans to prospective group contract holders and prospective insureds. Section 3.3705, as amended, prohibits retaliation against an insured for filing complaints or appealing decisions or against a physician or provider complaining on behalf of an insured. Amended sec.3.3705 also requires an insurer to provide a list of written reasons to a physician or provider before terminating a contract with a physician or provider; provides that, upon request, the insurer shall provide an advisory panel to review the termination of a physician and requires the insurer to provide the panel's and insurer's determination to the affected physician upon request. The section, as amended, also requires any economic profiling data relied upon by the insurer to admit or terminate a particular physician or provider to be made available to that physician or provider upon request. New language added to sec.3.3705 provides that an insurer may contract with a preferred provider organization in order to meet the requirements of the subchapter, but specifies that it remains the insurer's responsibility to assure that the requirements are met. General-Most commenters expressed general support for the proposed rule amendments and many offered comments or concerns on specific sections of the proposed amendments. Several commenters stated that the rules were a positive step in establishing meaningful standards for managed care and commended the agency for its efforts. A large number of commenters specifically supported the emergency care and disclosure provisions. One commenter expressed general support for the rules but cautioned that these issues call for legislative action and that the rules should not be viewed as a substitute for broad and comprehensive legislative action. Other commenters expressed generally negative comments about interference with private contractual relationships and conferring special rights on specific groups, particularly physicians and other providers of health care. Several commenters expressed concerns that the rules would drive up costs, including costs to small businesses, thus denying access to group health care for some Texas workers. Some commenters stated that the rules appeared to slant more toward fair treatment of providers rather than allowing the marketplace to set lower negotiated fees for medical care. One commenter stated that it is not clear whether fully insured plans provided by an employer would be exempt from the sections of this subchapter. A commenter stated that Medicare Supplement and Medicare Select policies should be exempt from these rules. Some commenters questioned the department's authority to promulgate specific benefits or regulate provider contracting. A commenter requested information about the applicability of the amended rules to policies that are already in force. Agency Response: The agency received approximately 200 written comments on the rules as well as numerous oral comments at the public hearing. The agency appreciates the comments received and the information provided at the public hearing. The agency will carefully monitor the operation of these rules and consumer complaints it receives to determine if additional changes need to be made to the rules in the future. The commissioner recognizes that legislative action may also change department rules in the future but believes these amendments are necessary now to maintain quality of care and protect patient freedom of choice. The agency responds to objections that the department is interfering with private contractual relationships by stating that it is carrying out the intent of the legislature and the governor in enacting rules regarding the operation of managed health care plans to ensure affordable, quality health care for Texans. Through the Insurance Code, the legislature has recognized a public interest in the regulation of health insurance and has delegated to the Commissioner of Insurance the responsibility to ensure that health insurance plans contain certain minimum standards; thus the commissioner has the authority to impose requirements on otherwise private contractual arrangements. Fairness to the actual providers of the health care is necessary to the continued availability of quality care. Staff and the commissioner have made every effort to avoid imposing measures that would significantly increase the cost of health coverage. Although several commenters expressed concerns over cost, only one commenter submitted data projecting a premium cost increase of up to 8.7%. The prohibition on financial incentives accounted for 7.5% of this projected increase and was based on the commenter's incorrect assumption that the language would prohibit all financial incentives, including those for delivering appropriate, cost effective, high quality care. At the public hearing on these proposed amendments, the commenter conceded that the proposed staff modifications to the amended language in the three provisions cited as causing expected cost increases would significantly reduce costs. He was unable to give revised figures. The rules do not themselves mandate specific benefits but rather clarify how statutory mandates shall be carried out. Fully insured plans are not exempt from this subchapter because they are insurance policies regulated by the state. Entirely self-insured ERISA plans may be subject to federal preemption and the application of state law to those plans or to other policies subject to federal law would have to be determined on a case-by-case basis. The amendments to the rules will become effective on January 1, 1996. Several commenters stated that the language in the rules relating to HMOs and the language in the rules relating to PPOs should be identical where possible. One commenter requested a definition of the word "reasonable." Another commenter stated that the term "insured" should be clarified throughout the rules. This commenter stated that in the context of group health insurance, the term insured can refer to the group contract holder and that employees or members of a group are often considered "beneficiaries." The rules should clarify that references to "insured" include all plan beneficiaries. A commenter asked that "clinically appropriate" be substituted wherever "medically necessary" appears. A commenter recommended deletion of the words "nor do they sanction" from the scope sec.3.3701, which states that the rules do not apply to or sanction plans by any entity other than one authorized to engage in the business of health insurance in the state. Agency Response: The agency has made the HMO rules and the PPO rules consistent wherever possible. Differences occur, however, based upon the sometimes significant differences in the statutes that govern each type of managed care plan, in the way each type of plan functions and the structure of the existing rules concerning each type of managed care plan. The agency disagrees that a general definition of the word "reasonable" should be added to the rules. The use of this word must be considered in the context of a determination under or application of a particular rule and therefore does not lend itself to being defined generally and for all purposes. The agency disagrees that it is necessary to clarify the term "insured" throughout the rules. The agency agrees that the term may refer to the group contract holder in some sections and to the "beneficiary " in others. In some rules, the term refers to both. The agency believes that it is clear from the context of each section to whom the term "insured" applies. The rules used the term "insured" prior to these amendments and this has not resulted in any complaints to the agency or reported confusion regarding the intent of the rules. Nevertheless, the agency has added the words "group contract holder" to sec.3.3704(7) to ensure that complete information about the PPO plan is disclosed to both the prospective group contract holder and the prospective insured upon request so that each can make informed choices among health care plans. The commissioner has not adopted the suggestion that "clinically appropriate" be substituted for "medically necessary" wherever it appears in the rules, but has reviewed the rules carefully to ensure that the intended standard is stated. In some cases, the word "medically" was deleted. The agency will not remove the words "nor do they sanction" from sec.3.3701. The sentence in which this appears correctly states that the rules do not permit or allow the unauthorized business of insurance to be transacted in the state. This sentence was not proposed to be amended. Several commenters requested that the rules be modified to account for agreements between insurers and third party preferred provider organizations under which the preferred provider organization contracts with individual providers and administers items such as quality assessment. A few commenters stated that the sole reference to this type of arrangement which appeared in sec.3.3705 was confusing. Agency Response: The department recognizes the market place practice of contracting with a third party preferred provider organization for the purposes of offering a network of participating practitioners. In sec.3.3705 of the prior rules, the phrase "anyone contracting on the insurer's behalf" was used to designate a third party preferred provider network. These words have now been deleted from that section and, for clarification, new language has been added to paragraph (9), which acknowledges the ability of an insurer to contract with preferred provider organizations while confirming that the responsibility for compliance with the rules rests with the insurer. One commenter requested the addition of "any willing provider" provisions. Another commenter recommended the inclusion of a provision permitting the use of a gatekeeper provision in a preferred provider plan so that a preferred provider plan would operate like an HMO: that is, for non-emergency care, patients would be directed to a primary care physician or provider who would provide initial and primary care to patients, maintain continuity of patient care and initiate any referrals to a specialist. Another commenter suggested the addition of a provision requiring the mandatory crediting of a calendar year deductible from one plan to another in instances of replacement in the middle of a calendar year. Agency Response: The agency disagrees with these comments. It is the department's position that these provisions would need to be addressed through legislative change and would not currently be within the rulemaking authority of the department. Mandating the admission to a managed care plan network of any willing providers would fundamentally change the managed care system. Additionally, the suggested gatekeeper provisions would completely change the nature of health insurance policies containing PPO plans and would violate Insurance Code Articles 3.51-6, sec.sec.3; 3.70-3 and 21.52. Gatekeeper arrangements are appropriate for HMOs but not for PPO plans. A commenter stated that the rules should include provisions requiring insurers to contract with Centers of Excellence because these facilities have higher medical outcomes and are more cost efficient in delivering specialty care. Agency response: Access by insureds to Centers of Excellence is partially addressed in sec.3.3704(6) which provides that if services are not available through preferred providers, the insurer must reimburse for treatment by non- preferred providers at the preferred provider rate. This subsection was not proposed to be changed. The agency is considering whether further rulemaking would be appropriate concerning this issue, however. One commenter requested the addition of a requirement that the department issue a Study and Report of Services on an annual basis to ensure that the public is properly served by PPOs. Another commenter suggested the addition of a provision requiring the Office of Public Insurance Counsel (OPIC) to issue an annual performance report to consumers which would be available to the public at a nominal cost and to allow OPIC access to department statistical information regarding utilization, quality assurance and complaints. One commenter asked that the rules specify that information provided to the department is an open record unless the department determines the information to be proprietary and recommended that the department work with the Texas Health Care Information Counsel to provide data to facilitate consumer decisions. Agency response: The Office of Public Insurance Counsel (OPIC) is not part of the department but is a separate state agency. Although House Bill 2766 (the Patient Protection bill) contained a provision requiring an annual report by OPIC, the department cannot require actions by another state agency. The agency does intend to publish information regarding the performance of managed care plans and OPIC will have access to all information collected by the department except that which is exempt from disclosure under the Texas Open Records Act. Section 3.3701 Private Cause of Action. Some commenters supported inclusion of language specifying that the rules do not create a private cause of action or create a standard of care. Other commenters objected strongly to this language, stating that the department has no authority to limit private causes of action or restrict a standard of care set forth in agency rules. Some commenters emphasized that the lack of a private right of action places all enforcement responsibility on the department and urged the department to create data categories to analyze complaints. Agency Response: This language does not change any existing law but only emphasizes that these rules are administrative rules. Violation subjects the violator to administrative action by the commissioner but does not affect private causes of action. In other words, these rules cannot form the basis of a private lawsuit, nor can they diminish other rights of action or defenses. They do not create a standard of care upon which a private action can be based unless they are specifically incorporated by reference into a private contractual arrangement. Because of recent legislative action regarding private actions based on department rules, the commissioner believes it is important to emphasize the nature of these rules and rejects suggestions that the provision be deleted. The commissioner and staff recognize that it is the department's responsibility to collect data and enforce these rules. Section 3.3702 Emergency Care. Several commenters stated that the definition of "emergency care" needs clarification because the definition does not specify in whose mind (the patient's, the treating physician's or the utilization review agent's) a medical condition could reasonably be expected to result in the adverse consequences set out in the definition. These commenters requested the express inclusion of a prudent layperson standard against which the reasonableness of the expectation could be judged. A few commenters suggested that the words "sudden onset" be deleted from the definition of emergency care or that the definition be amended to include situations in which a condition can build gradually over time and steadily worsen to the point a patient seeks emergency treatment. Another commenter requested that the definition be broadened to expressly include dental emergencies. Other commenters recommended that the definition of emergency care be adopted as proposed. Agency response: The definition of emergency care adopts by reference the definition contained in Insurance Code, Article 3.70-2. The agency believes that the existing definition includes the expectation of a prudent layperson. The definition also encompasses, in appropriate circumstances, dental emergencies and situations requiring treatment for an acute medical condition in the case where a condition began several days earlier but gradually worsens over time to the point at which a patient seeks emergency care. Section 3.3702. Health Insurance Policy. A few commenters recommended deleting the words "or individual" from the definition of "health insurance policy." A commenter believed that the real purpose of the rules is to regulate group policies rather than individual policies. Agency response: Individual policies have been included within the scope of the definition of "health insurance policy" since the inception of the PPO rules. These rules apply to any policy containing a preferred provider benefit plan, regardless of whether or not the plan is offered through a group or to an individual. The agency does not believe any change to this definition is necessary. Section 3.3702 Practitioner, Health Care Provider, Institutional Provider. Numerous comments were received relating to the definition of "practitioner" as used in the rules. Many of these commenters believed that the sections concerning fairness to providers should not be confined to only those practitioners within the scope of Articles 3.70-2(B) and 21.52, Texas Insurance Code. Many commenters requested that the definition of "practitioner" be expanded to include all licensed or certified health care providers. Some commenters recommended the inclusion of specific providers by name. Others requested that the term "health care provider" be defined as in the HMO rules. Some commenters recommended expanding the definition of "practitioner" but limiting the applicability of procedures to appeal denials of admissions to or terminations from a network to physicians only as a cost containment measure. Several commenters expressed concerns about potentially broadening the scope of the practitioners with whom insurers or PPOs would be required to contract. A commenter recommended including "home and community support services agency" within the definition of "institutional provider". Agency response: The agency intends to extend certain protections and requirements concerning physicians and practitioners to all health care providers with which an insurer or third party entity may contract. Accordingly, changes have been made to the definition of "health care provider" to include any other licensed provider that furnishes health care services. Also, the word "medicine" has been deleted from the definition of "practitioner" as unnecessary in light of the definition of "physician." In addition, changes have been made to sec. sec.3.3701, 3.3703, 3.3704, and 3.3705 to clarify the applicability of each provision to physicians, practitioners, institutional providers, and other health care providers. Some provisions remain unchanged, however. The kinds of providers with whom insurers or PPOs are required to contract is governed by Articles 3.70-2 and 21.52, Texas Insurance Code. It is not the agency's intent to broaden or expand these statutory provisions. Therefore, changes have not been made to any rules that are, by their nature, limited by the statutory provisions. Section 3.3702 Prospective Insured. Several commenters requested a definition of "prospective insured" in order to clarify persons to whom information about the PPO plans must be disclosed. Several of these commenters suggested the term be defined to include only persons "eligible" for coverage. Agency Response: The agency has added a definition of "prospective insured" in response to the comments. This definition is intended to be expansive so that the information will be available to all persons who meet the basic requirements for coverage under the plan. The agency does not intend for insurers to limit the application of this definition to persons who are eligible for coverage after underwriting standards are applied. Section 3.3703 Composition of Advisory Review Panel. Numerous comments were received with respect to the members of the advisory review panel. Many commenters recommended that the panel consist of at least three physicians. Several commenters felt that the panel should not be comprised solely of physicians who contract with the insurer. Other commenters stated that the affected physician should be permitted to select at least one member of the panel. A few commenters objected to the requirement that the panel include one member who is a physician in the same or similar specialty, if available. Several commenters recommended that the advisory review panel process be made available to all health care providers and not limited to physicians. Conversely, several commenters expressed concerns that any expansion of the panel to include other health care providers would unnecessarily increase costs which would ultimately be passed along to insureds. Agency response: The existence of a three-member review panel consisting of physicians who contract with the insured was in the previous non-amended section and should not be changed. The agency believes that expanding the availability of the advisory review panel to review admission and termination decisions with regard to all health care providers would be time consuming and costly. All health care providers are entitled to written reasons for denial or termination under the section, however. Adding the requirement that the panel include a specialist, if available, however, is not burdensome and will make the panel's recommendation more meaningful in cases in which a specialist appeals an adverse decision. Section 3.3703 Admission of Preferred Providers. One commenter objected to the provision in the rules requiring annual publication of a provider application period. The commenter believed this to be an unnecessary administrative expense when plans have sufficient providers. A few commenters generally objected to any requirements for disclosure to providers of admission and qualification criteria on the basis that it interferes with market based contracting practices. A commenter stated that it is bad public policy to require an insurer to disclose proprietary information regarding specific economic data used in management practices. Several commenters recommended that insurers or PPOs be required to respond to requests for information concerning the application process within a designated time frame. Suggested time frames ranged from within ten days of request to within 60 days of request. One commenter stated that the section should only require insurers to give written responses for denial of an "initial" application. A few commenters recommended prescribing the time frame within which written reasons for denial of an application must be given. Suggested time frames range from within ten days of denial of application to within 90 days of receipt of application. A few commenters objected to the provision allowing denial of an application on the basis that the plan has sufficient participating providers and requested that insurers be required to prove to the rejected provider that the network does, in fact, have sufficient providers. One commenter stated that the use of this reason for denial of an application should not be allowed if more than 20% of the plan's participating providers are no longer accepting new patients. A commenter requested that the rule prohibit rejecting the application of a physician or provider solely because of the anticipated characteristics of the patients of that applicant. Another commenter suggested deletion of the reference to sec.21.52B, Insurance Code as being confusing. Several commenters recommended that in the case of an appeal to the advisory review panel by a physician whose application is rejected, the panel's recommendation should be disclosed to the affected physician, along with an explanation if the insurer rejects the panel's recommendation. Others recommended that this information should only be made available upon request. A commenter recommended requiring the insurer or PPO to accept certification of hospitals, home health, or hospice providers by the Medicare program as an alternative to accreditation by the Joint Commission on Accreditation of Healthcare Organizations (JCAHO) during any credentialing process conducted since a similar requirement is currently applicable to HMOs. Agency response: The agency disagrees that application procedures and qualification requirements should be withheld from disclosure to providers. In order to maintain a fair and reasonable contracting environment, it is necessary for providers to be informed of the application and qualifications requirements. This subsection does not require the release of proprietary information; it simply requires the disclosure of information concerning the application and qualification requirements upon request. Annual notification to physicians and practitioners is not a new requirement and the agency believes it should be retained to provide fair and reasonable opportunities to contract. The agency has not added specific response times for providing application materials or denying applications believing that the existing requirements are adequate to produce timely responses; the department will monitor complaints to determine if insurers are failing to respond timely to applicants. In response to comments the agency has retained the requirement for written reasons for denial to be provided on "initial" application. The agency believes that insurers must be allowed to limit the participation of preferred providers when they have sufficient preferred providers of a particular type to have an economically viable managed care network. The department believes that requiring the insurer to prove to the rejected provider that the network has sufficient providers would be costly and burdensome to insurers. The department has not articulated any prohibited bases for excluding a physician or provider from a PPO network but will monitor complaints to determine if such prohibition may be advisable in future legislation or rulemaking. The agency agrees that the recommendations of the advisory review panel and any decision of the insurer if contrary to the panel's recommendation should be provided to the affected physician upon request in order to ensure a more meaningful appeals process. The section has been modified accordingly. The agency disagrees that the reference to Insurance Code, sec.21.52B is confusing. This statute has established a procedure different from that set out in the rule and the agency believes the reference to this statute in the subsection is helpful. The acceptance of either Medicare or JCAHO certification during any credentialing process for HMOs is a recent legislative mandate. Whether a similar process should be applied to insurance policies containing preferred provider benefit plans is outside of the scope of this rulemaking. Additional research and evaluation will be necessary to determine whether it is appropriate to address this in a separate rulemaking effort, or whether this is more appropriate for legislative action. Section sec.3.3703(3) Requirements-Financial Incentives. Many commenters supported restrictions on the use of financial incentives that would limit availability of medically necessary care. Some commenters preferred the language contained in the PPO rules to that contained in the HMO rules. A few commenters requested the addition of the language "or clinically appropriate" in addition to "medically necessary." Suggestions were made to more clearly define unacceptable financial arrangements because certain financial incentives may be an appropriate aspect of cost containment. Specifically, many commenters wanted it clearly stated that the rule does not prohibit rewards to providers who reduce the cost of unnecessary care and provide appropriate medical care. Agency response: The agency agrees that restrictions are needed on the use of financial incentives that would limit the provision of medically necessary care. The agency does not intend to prohibit reasonable cost containment and managed care features of a PPO plan that do not adversely affect the provision of medically necessary services. The agency agrees that some clarification is needed, however, and the subsection has been changed accordingly. The language as modified is intended to broaden the scope of the financial incentives that may be considered unacceptable and to include both positive and negative incentives. Although the agency has eliminated the more specific prohibitions contained in the subsection prior to these amendments, those activities would still be unacceptable under the language of the amended subsection. Section 3.3703(5)-Data Collection. Some commenters stated that the data to be made available to the department under this section is inadequate. Other commenters stated that the section's ambiguous reporting requirements would result in increased administrative expense and inefficiency. Agency response: The agency disagrees with the comments concerning data collection. The amended rule merely clarifies language in the prior rule, substitutes Texas Department of Insurance for Board, and maintains the same categories of data already subject to department request. In making a request for data, the agency will identify the information to be provided and the manner in which it is to be provided to eliminate concerns relating to ambiguous reporting requirements or duplicative efforts. Section 3.3704(3)-Continuity of Treatment. Many commenters strongly supported the provision requiring continuity of care for patients with special circumstances whose physicians or providers are terminated from the preferred provider network. Several commenters who generally supported the provision also suggested that the subsection require advance notice to the patient; some suggested a specific period for advance notice such as 90 days. Other commenters stated that the requirement in the proposed subsection for "immediate notice" to the insured is unworkable. Several commenters objected to the 90-day limit for continuing care by the terminating provider, arguing that continuity requires reference to clinical standards rather than an arbitrary deadline; these commenters suggested that the physician or provider continue to be compensated by the plan until the conclusion of the "episode of care" or an "episode of acute care". Some commenters stated that the insurer should reimburse the terminated provider at the contract amount unless it is based on a discounted fee, in which case reimbursement should be based on reasonable and customary charges and that the provider should be required to accept the plan's payment as payment in full and not seek additional compensation from the patient. A few commenters requested that "special circumstances" include women at or beyond the 24th week of pregnancy or the second trimester rather than "in the third trimester". Many commenters requested that the subsection specify that a plan need not continue payment to a physician or provider removed for quality of care reasons. Some commenters requested that the continuity of care provision be available to all patients, not just those with special circumstances. An opponent of the provision commented that the contract terms, not "medical prudence" should govern continuity of care provisions and they should apply to all insureds. Many commenters requested that the rule clarify that a provider removed for quality of care reasons need not be compensated for continuing to see a patient. Several commenters stated that the language should be clarified, specifying such things as who will make final decision as to when continuity of care is required, who will monitor the process, and further defining special circumstances. Some commenters supported including the term "disability"; others suggested it be deleted as being vague. A few commenters suggested that the subsection require that continuity of care be requested by the treating physician or health care provider. Some commenters stated that the insurer should not be responsible for payment after a provider voluntarily drops from a network. A few commenters recommended that the words "plan termination" be deleted from the subsection because those words are used in a situation in which a group contract holder terminates the contract rather than the situation in which a preferred provider or provider network is terminated by the insurer. Agency response: There is general agreement that some provision for continuity of treatment is desirable. The agency disagrees that contract terms rather than medical prudence should govern continuity of care; contract provisions must not undermine the exercise of medical prudence. The agency agrees that the subsection should require pre-termination notice to the patients so that patients may begin to make arrangements with other providers or request continuity of treatment through their current providers. The agency agrees that immediate notice is unworkable but has rejected the comments that an advance notice period, such as 90 days, should be specified in the subsection because this is too inflexible. The subsection has been changed to require reasonable advance notice to the insured of an impending termination of a provider currently treating the insured. The department will monitor complaints to determine if more specific requirement of advance notice is necessary. In response to comments, the commissioner has adopted language clarifying that the provisions do not apply to a physician or provider removed for quality of care reasons and clarifying the meaning of "special circumstance." For clarification, the commissioner has changed "third trimester" to "24th week" of pregnancy. "Second trimester" has not been added because this would require continued reimbursement at the preferred provider rate long beyond that required for other conditions and the agency believes that the requirement for reimbursement at the preferred provider rate after the 24th week of pregnancy along with the reasonable advance notice that must be given to the insured will give the insured sufficient time to find a qualified preferred provider. The subsection has been changed to specify that the physician or provider must identify a patient's special circumstances to the plan and request that the patient continue under his or her care, and to prohibit the physician or provider from seeking compensation from the patient beyond what the patient would have been responsible for under the plan. These changes have been made in response to comments to clarify the procedures by which the continuity of care requirements will be applied. The agency disagrees with comments suggesting that compensation should be at a rate different than the physician or provider received under the plan (preferred provider rate) because that would impose additional costs on the plan and it is reasonable for the physician or provider to continue to accept compensation at the preferred provider rate for the limited time required to complete the patient's care or arrange for the patient's safe transfer to another treating physician or provider. The 90-day limit on continued reimbursement to the terminated provider is the maximum time required by the subsection but plans and physicians or providers may extend this time period by contract or by agreement on a case-by-case basis as needed. Based on information received by the department, the commissioner believes that many managed care plans currently negotiate continuity of treatment based on the needs of the patient and hopes that arrangements beyond those mandated by the rules based on the needs of individual patients will continue. The agency disagrees with the suggestion that continuity of care be required to continue until the conclusion of an episode of care because this could be such a long period of time that this provision would undermine the managed care plan's control of its preferred provider network. The agency believes, based upon the definition of acute care provided by the commenter, that an "episode of acute care" would be covered by the 90-day period in the proposed language. The agency believes that the subsection should apply for the benefit of the patient, whether the plan or the health care provider initiates the termination and therefore rejects the suggestion that the provisions should not apply if a physician or provider voluntarily terminates from the network. "Plan termination" will be deleted from the subsection. References to termination of preferred providers includes termination by the insurer or either an individual provider or a network of preferred providers. The provision is not intended to apply to a situation where the group or individual contract holder terminates the contract with the insurer because the insurer would not be receiving any premium payments. Section 3.3704(4) (changed to sec.3.3704(5))-Emergency care services Many commenters expressed strong support for the rules relating to emergency care services. This issue, stated many commenters, is a crucial one to consumers of managed care plans. According to these commenters, the subsection will prevent unnecessary delays in providing emergency care service, avoid inappropriate denials of coverage and improve the overall health care provided by managed care plans. Some commenters expressed their concern that the emergency care provisions will impose costly burdens upon managed care plans to pay for non-emergency care rendered in a hospital emergency department. As an illustration, one commenter stated that if a patient presents at the emergency department with an ordinary cold, potentially costly emergency medical screening examinations and treatment would be required to be covered. A few commenters stated that the subsection should not impose any requirement for coverage for emergency care services stating that this would undermine the insurer's plan of benefits and the preferred provider organization's contracting arrangements. Several commenters stated that the agency should not enact any rules concerning emergency care because the Governor's veto message did not specifically mention emergency care. Several commenters recommended that the subsection clarify that coverage for emergency care services must be provided without regard to whether the provider is a preferred provider. Several commenters stated that the term "emergency department" used in the subsection should be changed to "emergency room" to make it clear that only emergency medical conditions are intended to be covered. One commenter suggested that use of the term "emergency department" is too restrictive and that the reimbursement obligation should be imposed regardless of where patients receive emergency care. Some commenters stated that in general emergency care requirements could increase costs to managed care plans if services are unnecessarily utilized for non-emergency situations. A few commenters suggested that reimbursement for emergency care services should be determined retrospectively in light of whether an emergency medical condition actually existed or, for the emergency medical screening examination, whether a prudent layperson would have reasonably believed a medical screening examination was necessary. Another commenter stated that reimbursement should be withheld unless the treating provider certifies that an actual emergency medical condition existed. Many of the commenters addressed the portion of the subsection prohibiting denial of reimbursement for medical screening examinations to determine whether an emergency medical condition exists. Some commenters recommended deletion of the word "initial" used to describe the medical screening examination to determine whether an emergency medical condition exists. These commenters stated that the word "initial" is not used in either federal or state regulations concerning emergency services. Other commenters requested the insertion of the word "necessary" before the phrase "to determine whether an emergency medical condition exists" in order to clarify that only screening tests that are necessary to the determination of whether an emergency medical condition exists must be covered by insurer. Other commenters requested that the term "appropriate" be inserted to modify medical screening examinations because that term is used in federal law which mandates the provision of emergency services by hospitals. Several commenters recommended that the subsection require coverage of not only a screening examination but also diagnostic tests and other procedures to determine whether an emergency condition exists. Several commenters requested that the subsection provide for medical screening examinations to be conducted only by or at the direction of a physician. Several commenters requested that the term "medically necessary" be removed from the portion of the subsection prohibiting denial of reimbursement for treatment and stabilization of an emergency medical condition. These commenters stated that the definition of emergency care in sec.3.3702 already establishes medical necessity making the use of the term here redundant. With regard to post-stabilization care, some commenters requested that a requirement be imposed on insurers to respond to inquires of a treating provider concerning post-stabilization care within a defined time period like that required under the proposed department rules concerning HMOs. One commenter stated that language in the existing subsection requiring reimbursement for post-stabilization care at the preferred provider rate if the insured "cannot reasonably reach a preferred provider" is vague. Several commenters recommended that the words "for an emergency condition" be inserted after "or services originating in a hospital emergency department following treatment and stabilization" in order to clarify that the required reimbursement is for post-stabilization of an emergency condition. One commenter recommended insertion of the words "the insured" before "cannot reasonably reach" in the post-stabilization care provision while another commenter suggested that the words "the treating physician" should be inserted here. Some commenters recommended substitution of the words "emergency care services" or "care for an emergency medical condition" for the words "under emergency conditions" in the post-stabilization care provision. These commenters stated that the words "under emergency conditions " were ill-defined and that this provision should be consistent with the provision requiring reimbursement for treatment and stabilization of an emergency medical condition. A few commenters stated that the subsection should require post-stabilization care to be reimbursed at the treating provider's rate rather than at the preferred provider rate. Agency response: The agency agrees that the subsection will help clarify coverage for emergency care services and should provide greater assurances to consumers of managed care products. The subsection will also address some of the questions that have arisen in this area and provide greater direction to insurers. The emergency care provisions are consistent with the Governor's proclamation which addressed the need to provide patient protection and quality assurance and to expand patient freedom of choice. The subsection is not intended to mandate coverage for situations which are clearly non-emergencies. The agency believes that definition of "emergency care" in sec.3.3702, together with other language in this subsection, should avoid payment for inappropriate uses of emergency care services. Moreover, managed care plans already do and should continue to educate their members concerning the appropriate use of emergency care services. Also, the disclosure provisions in sec.3.3704(7) require the insurer to give information to prospective insureds about access to after-hours care. The availability of, and information about after-hours care should also help direct patients away from emergency departments for non-emergency situations. As suggested by one commenter, if a patient comes to the emergency department with a cold, a screening examination necessary to determine whether an emergency medical condition exists should not be costly, if needed at all under such circumstances. Once it is determined that the patient has a cold, emergency care services would not be considered necessary and would not be covered. No coverage would be required for treatment after stabilization because no emergency condition existed to which this treatment would relate. The agency disagrees that these requirements disrupt an insurer's plan of benefits and a preferred provider organization's contracting arrangements. Emergency care services are already required to be provided in health insurance policies and the subsection is intended to clarify what services must be reimbursed and under what circumstances. The subsection has been reorganized and renumbered to clarify that the emergency services specified must be covered at the preferred provider level of benefits without regard to whether the provider furnishing the services has contractual or other arrangement with the insurer or preferred provider plan. The subsection as reorganized more closely resembles the HMO rules on this subject while maintaining differences which reflect the distinctions between HMO and PPO plans. The agency disagrees that the term "emergency room" should be substituted for "emergency department" because it believes the term "emergency room" is too restrictive. On the other hand, the agency does not believe the term "emergency department" is unduly restrictive. These rules are intended for general application and the agency believes they are adequate because most patients present to the emergency department of a hospital in a medical emergency situation. The agency expects that for rare circumstances when a true emergency is handled outside a hospital, reimbursement will be determined on a case-by- case basis. The subsection is not intended to prohibit or limit reimbursement for emergency care services rendered outside the emergency department of a hospital. The commissioner disagrees that reimbursement for emergency care services should be determined retrospectively by the insurer or based on certification by the treating provider. This can create a chilling effect on patients which can cause delays in patients seeking needed emergency care. The agency disagrees that a prudent layperson standard should be applied to a decision concerning the necessity for an emergency screening examination. This kind of determination is best made by a practitioner under the circumstances of each medical emergency. The agency agrees that the term "initial" should be deleted from the subsection because it is not a term used in either federal or state regulation and may be interpreted to inappropriately restrict reimbursement. The agency further agrees that the term "necessary" should be inserted to modify "to determine whether the emergency condition exists." The agency believes that the addition of this term will clarify that the screening examination must be related to a determination of whether an emergency medical condition exists. The agency disagrees with adding the term "appropriate" or that the subsection must specify coverage of diagnostic testing in order to be consistent with federal law. The subsection provides that a health care plan must cover any medical screening examination or "other evaluation required by state or federal law" which is necessary to determine whether a medical emergency condition exists. This would include an examination as described by the Emergency Medical Treatment and Active Labor Act, 42 United States Code, sec.1395dd. The agency disagrees that the subsection should limit persons who can conduct emergency screening examinations to physicians. Such a provision would be unduly restrictive and, under some circumstances, it may be more appropriate for another type of health care provider to conduct a screening examination. The agency agrees that the term "medically" used to modify necessary emergency care is redundant and its use could be confusing because the term "medically necessary" may be defined differently in different health policies. The word has been deleted. The subsection will retain the word "necessary," however. The agency disagrees with the comments that a time limit similar to that found in the HMO rules needs to be imposed on the insurer or PPO plan within which either of those entities must respond to inquires from a treating provider concerning post-stabilization care. The subsection requires payment at the preferred provider rate if the insured "cannot reasonably reach a preferred provider." Under circumstances in which an insured can reasonably reach a preferred provider, an insurer must still pay reimbursement for the services but reimbursement would be at the non-preferred provider rate. The phrase "cannot reasonably reach a preferred provider" was in the subsection prior to the proposed amendments and the agency has not received any complaints or information that this language has caused problems or been misunderstood. The subsection already provides for payment to the treating provider for post- stabilization care under circumstances in which the insured cannot reasonably reach a preferred provider or reasonably be expected to transfer to a preferred provider at the treating provider's rate rather than at a discounted rate by requiring reimbursement to the insured at the preferred provider level of benefits; no change to the subsection is necessary. In response to comments the agency will add "of an emergency medical condition" after the words "treatment and stabilization" to clarify that reimbursement at the preferred provider level of benefits applies to post-stabilization care related to an emergency condition. The subsection as reorganized has deleted "under emergency conditions" and inserted "the insured" before the phrase "cannot reasonably reach," as requested by the commenters. Section 3.3704(5) (changes to sec.3.3704(7))-Disclosure Requirements. Many commenters strongly supported the disclosure of information concerning PPO plan terms and conditions in a uniform and consistent manner to enable consumers to make informed decisions when choosing among plans. Some commenters made suggested language changes to this subsection while others supported the subsection as proposed. Some commenters did not support the inclusion of this subsection. A commenter stated that the information required to be disclosed would be of no interest to the public. Another commenter stated that the requirement would duplicate what is required under ERISA. Several commenters requested that the disclosure form also be provided to the employer or other group contract holder contracting for the insurance not just to "prospective insureds." Another commenter stated that for group coverage, the subsection should require the insurer to provide an employer or other prospective group contract holder with sufficient copies of the disclosure information for distribution to all employees or members. Many commenters requested that the information be required to be in a particular "format" rather than in a "form prescribed by the department" because, these commenters stated, use of a form prescribed by the department would be costly and businesses should not be required to follow government prescribed forms. A few commenters disagreed that the information should be required to be provided in a particular "form" or "format" and recommended that the subsection only state the information to be disclosed and allow the insurer to determine the format. Some commenters stated that the types of information required to be disclosed by the subsection are already currently available upon request from some insurers and thus the subsection is unnecessary. A few commenters suggested that the department allow insurers to make available a certificate of insurance or an outline of coverage in lieu of the disclosure information. Several commenters suggested that the words "shall make available" be changed to "shall provide." Others recommended that the form be provided "upon request." Other commenters requested that "upon request" not be added. Several commenters stated that the subsection should require all marketing materials to contain the required disclosure information. One commenter suggested that the subsection require the disclosure information to be mailed within two working days of a request for it. A commenter suggested that the disclosures be required to be available in a variety of language formats including in the primary language of 10% or more the of the residents of the service area, in Braille and on audio tape. A commenter stated that the subsection would impose greater readability requirements on PPOs than on other kinds of health policies. Many commenters suggested changes to the list of items required to be disclosed by the subsection. A few commenters recommended that the list be reordered to provide consumers with the more important information first. Several commenters stated that the insurer's phone number required to be included in the disclosure information for insureds to obtain additional information should be a toll-free number. A commenter recommended that the disclosure form also specify what other types of information are available as well as giving a toll-free number. A commenter suggested the disclosure include an explanation of the difference between a PPO and an HMO and a statement in 12 point type that the disclosures are required to be in a standard format for comparison. A commenter requested that the item requiring disclosure of emergency care benefits specify that the disclosure include language that emergency care will be covered no matter where it is delivered. Another commenter requested that the disclosure include information on obtaining after-hours care. Numerous commenters stated that the requirement for disclosure of the drug formulary as proposed was too broad and would require insurers to produce long lists of drugs that would be constantly changing and would not be meaningful to consumers. Several of these commenters recommended that the words "existence of" be added to modify "drug formulary" to clarify that the entire drug formulary need not be reproduced in the disclosure forms. Several commenters requested specific language to clarify that preexisting condition limitations must be disclosed. One of these commenters also requested disclosure of the number of years of medical history that will be considered in determining preexisting conditions. A commenter requested deletion of the words "plan termination" from the requirement to disclose continuity of treatment provisions for the same reasons the commenter requested the words be deleted from sec.3.3703(3). A commenter recommended that the provision concerning continuation of coverage in the event of discontinuance or replacement of the policy should be deleted. Some commenters requested that complaint and grievance procedures be required to be disclosed including information concerning the prohibition against retaliation and the names and numbers of individuals responsible for processing complaints. Several commenters requested that the names of providers not accepting new patients should be disclosed along with the names of providers contracting with more than one plan and the total number of patients treated by each provider. A commenter suggested that the requirement for disclosure of the service area should include a statement that if the insured has to drive more than 20 minutes to obtain preferred provider benefits, the plan would be required to reimburse a non-preferred provider closer to the insured at the preferred provider rate. Several commenters requested mandated disclosure of preferred provider-to- insured ratios and information related to hold-harmless requirements. Agency response: The agency agrees that requiring the disclosure of information about PPO plans to be made available in an uniform and consistent manner will assist consumers in making informed choices when choosing among plans and enhance their freedom of choice. The agency disagrees that the information will be of no interest to the public. The agency recognizes that some of the information required to be disclosed may duplicate disclosure requirements contained in federal law but not all of the information required by this subsection is disclosed under federal law. All prospective group contract holders and prospective insureds should be able to receive the same information, not just those covered by plans subject to federal law. The agency agrees that an employer should be provided with the disclosure information upon request. The words "group contract holder" have been added to the subsection to clarify the commissioner's intent that an insurer must also provide the disclosure information to an employer or other group contract holder. The agency does not agree, however, that the subsection should expressly mandate insurers to provide employers or other prospective group contract holders with sufficient numbers of disclosure statements to distribute to all of their employees or members due to the costs this would impose; however, the agency encourages insurers to cooperate with prospective group contract holders when they make such a request. The insurer must respond, however, to requests for information from prospective insureds. The agency agrees that the required disclosures need not be "in a form prescribed by the department." The term "format" has been substituted. The agency believes that requiring the information to be disclosed in a set format will help consumers make comparisons from plan to plan. The agency disagrees with the suggestions that an insurer should be able to substitute a certificate of insurance or outline of coverage for the required information. The layout and format of certificates of insurance are not prescribed and providing these to consumers would not facilitate plan comparison. Outlines of coverage may not provide all of the information required to be included by this subsection again defeating the purpose of facilitating ease of comparison. The agency agrees that "shall make available" should be changed to "shall provide" for clarification. The agency also agrees that "upon request" should be added to be consistent with the HMO rules and to reduce costs by requiring the information to be provided only to persons interested in the coverage. The agency believes that the requirement to include the disclosure statement in all marketing materials would be too costly and would duplicate some of the information already made available by the insurer. The suggestion that the disclosure form be mailed within two working days of the request has not been adopted; however, the department will monitor complaints in this regard, if any, to determine if further amendment of the subsection may be appropriate. To keep costs at a minimum, the subsection will not require that disclosures be provided in different languages, in Braille or on audio tape; however, the department encourages insurers to make the disclosure information accessible and otherwise to provide assistance to those who request it. The subsection does not put any greater readability requirements on insurance contracts with preferred provider provisions than are required for any other health benefit plans that must comply with the department's rules. In response to comments the agency has revised the list of items required to be disclosed to prospective group contract holders and prospective insureds and has reordered the items. Although the agency believes disclosure of all of these items is important to consumers, the agency believes it has put the items of more general interest first. The agency agrees that a toll-free number should be provided. Although certain insurers who transact only a small amount of business in the state are exempted by statute (Insurance Code Article 21.71) and rule (28 Texas Administration Code, sec.1.601) from the requirement of maintaining a toll-free number, the department believes that most of these insurers currently provide a toll-free number. The department encourages all insurers otherwise exempt from this requirement to maintain a toll-free number for prospective as well as existing insureds to obtain information about their PPO plans. The agency disagrees that the disclosure should contain an explanation of the difference between HMOs and PPOs and a statement that the disclosures are required to be in standard format. Information concerning HMOs in a PPO disclosure form might be confusing to consumers. Instead, the agency has added a requirement that the insurer disclose that the coverage is provided by an insurance company, the name of the insurance company and that the insurance contract contains preferred provider benefits. The requested 12 point type statement is unnecessary because the format requirement in this subsection will allow consumers to make comparisons. The agency disagrees that the disclosure needs to explicitly state that emergency care benefits will be provided no matter where delivered. This is implicit in requiring a disclosure of these benefits. The agency agrees that information about after-hours care should be disclosed. Disclosure of this information can help direct insureds away from emergency departments for non- emergency conditions. The agency does not intend to require disclosure of an entire drug formulary because it would be costly to do so and the formulary would need to be updated constantly. The subsection has been reworded to require disclosure of the existence of any drug formulary limitations. The agency has added language clarifying that any preexisting condition limitation must be disclosed. It is unnecessary to specify that this information must include the number of years of medical history used to determine preexisting conditions because full disclosure will require the inclusion of this information. "Plan termination" has been deleted from the subsection to be consistent with the deletion to these words in sec.3.3703(3). The agency agrees that disclosure concerning continuation of coverage in the event of discontinuance or replacement of a policy should be deleted because such provisions would be lengthy, complicated and of interest to only a small number of prospective insureds. Also, statutes and other agency rules fully address these requirements. The agency has modified the subsection to require disclosure of complaint and grievance procedures as requested by the commenters. The agency agrees that information concerning which providers are not accepting new patients is important to consumers and should be disclosed. The subsection has been modified accordingly. The agency disagrees, however, that providers contracting with more than one plan and the total number of patients treated should be disclosed as this information would constantly change, would be too costly to implement and would be only of limited use to the consumer. The agency disagrees with the comment that the service area disclosure should include a requirement for reimbursement at the preferred provider rate if an insured has to drive more than 20 minutes to reach a preferred provider. This would be a substantive requirement rather than a disclosure requirement. The agency has not received complaints concerning this issue; nevertheless the agency will continue to monitor complaints to determine whether future rulemaking may be necessary concerning this issue. The agency disagrees that disclosure of preferred provider-to-insured ratios should be required because this information alone could be misleading to consumers. The department will monitor complaints that sufficient preferred providers are not available to insureds. The requested disclosure of hold-harmless requirements has raised a new substantive issue. This comment was related to one requesting a new provision in the subchapter concerning hold-harmless clauses in provider contracts in which the provider would agree to look only to the insurer for payment and not to the insured. The department will study this issue to determine whehter it may be appropriate for future rulemaking. Section 3.3704(6) (changed to sec.3.3704(8))-Filing Requirements A commenter questioned the authority to require information which must be disclosed to prospective group contract holders and insureds to be filed with the department. A commenter asked whether insurers would be required to file all advertising for their PPO plans. A commenter requested the agency to delete this subsection. Another commenter requested the agency to add a date on which the list of providers must be filed annually with the department. Agency response: The subsection does not mandate the filing of all advertising with the department but requires an insurer to file the information provided to prospective group contract holders and insureds and to file annually their provider lists and service areas. The agency is considering the appropriateness of rules requiring the filing of all advertising for managed care plans, however. In the meantime, the agency will retain this subsection because it is necessary for the agency to monitor compliance with the disclosure requirements. The subsection has been amended to include a date by which insurers must file their annual list of providers. Section 3.3704(7) (changed to sec.3.3704(9))-Provider directory to be sent to insureds quarterly. Several commenters stated that the requirement for a current provider directory to be sent to insureds quarterly would drive up costs significantly and is not necessary because the subsection also requires a toll- free number for insureds to obtain that information. A commenter stated that because networks provide toll-free numbers, insurers should not have to provide one. Another commenter stated an that exception from the quarterly provider list and toll-free number should be made for small employer carriers. Agency response: The agency agrees that a complete provider list sent quarterly to all enrollees would be more costly than it would be useful. In order to reduce costs, the agency has rewritten the subsection to require this list to be sent annually. Supplying insureds with an updated provider list annually plus providing a toll-free number for insureds to call to obtain a current provider list should suffice. Insurers may use the same toll-free number as that used to provide insureds with other information, for example by sec.3.3704(5). The agency does not agree that small employer carriers should be exempt from the subsection as revised. Insureds need access to current information about available providers to be able to make informed choices. Section 3.3704(8) (changed to sec.3.3704(10))-Prohibition on Misleading Information. A commenter stated that this subsection, which appeared to be derived from various statutes prohibiting the dissemination of false or misleading consumer information, was unnecessary in light of the existing statutory provisions and would create confusion over whether the intent was to create a new type of cause of action. The commenter recommended deletion of the subsection. Agency Response: The agency agrees that the language in this subsection should be simplified but does not agree that the subsection should be deleted. The language has been changed accordingly and is substantially the same as that in the HMO rules. The intent in adding this subsection was not to create a new or different cause of action but to emphasize that consumers must be given thorough and accurate information about PPO plans and the failure to do so may result in agency enforcement. Section 3.3705(2) (changed to sec.3.3705(3))-Retaliation. Most commenters support this proposed subsection. Several commenters suggested that the subsection should extend protection against retaliatory actions to physicians and providers who complain or appeal a decision on behalf of their patients, especially in utilization review situations. Other commenters suggested that complaints and appeals should be uniformly recorded and monitored by the department and that the proposed rule should be aggressively enforced. A commenter stressed that this rule is very important for persons with disabilities since, based upon information from other states, disabled persons expect to experience more barriers to quality services than other individuals. Some commenters argued that insertion of the word "solely" before the words "before the insured" clarifies that there are other acceptable reasons for termination of coverage and avoids a situation where an insured or employer might complain in anticipation of termination of coverage to prevent it. Agency response: The department agrees that the proposed section should be expanded to prohibit retaliatory actions against physicians and providers who, on behalf of their patients, complain or appeal a decision of an insurer. The department strongly believes that a physician or provider should feel free to act as an advocate on behalf of a patient who the physician or provider reasonably believes has been or will be denied medically necessary and appropriate health care services covered by an insurer. For this reason, the department has amended this section to clarify an insurer may not retaliate against a physician, provider or insured for complaining or appealing a decision of the insurer on behalf of the insured. The department agrees that complaints against insurers should be uniformly recorded and monitored. The department disagrees that the word "solely" should be inserted before the words "because the insured." The department believes insertion of the word "solely" would make the provision unenforceable by the department because an insurer could easily establish more than one reason for taking the retaliatory action other than a complaint or appeal of a decision. The department disagrees that the provision as worded would effectively prevent an insurer from terminating a provider who had complained on behalf of an insured in anticipation of the provider's termination from the plan in order to prevent termination. There can be many legitimate reasons to terminate a provider, but retaliation for a complaint on behalf of a patient is not one of them. Section 3.3705(2) (changed to sec.3.3705(4))-Provider Termination. Several commenters supported the requirement that written reasons be given prior to termination of a contract with a preferred provider. Some commenters, however, objected to this requirement as costly. These commenters stated that the contract should be terminated in accordance with contractual provisions and that any additional requirements would create a special employment class for physicians and health care providers. A few commenters recommended prescribing the time frame in which written reasons must be provided. One commenter suggested that the PPO or insurer be required to provide written reasons for termination within ten days of notification of termination. Many commenters supported the idea of an advisory review panel to review termination decisions but stated that the advisory review panels should be available to all providers, not just to physicians. Several commenters requested language requiring the insurer to disclose the advisory review panel's recommendation to the affected physician, along with an explanation by the insurer if the insurer rejected the panel's recommendation. Other comments suggested that an explanation should only be required to be made available upon request by the affected physician. Some commenters expressed concern that the requirement for a pretermination advisory panel review would prohibit an insurer from terminating a physician where continued practice constitutes imminent threat of harm to patients or against whom license action is pending and suggested that the rule allow summary suspension for patient safety reasons. A commenter objected to the requirement of the advisory review panel process in the event of termination due to economic considerations. One commenter stated that the rule should set out the proper reasons for termination. Agency response: The agency agrees that the requirement to provide written reasons for termination of a physician or provider should be retained and will not add significant administrative cost because the insurer is simply required to inform the terminated physician or provider of the reasons for its decision. This requirement is consistent with the goal of maintaining availability of quality care and coverage. The department has not added specific response times for providing written reasons for termination believing that the existing requirements are adequate to produce timely responses; the department will monitor complaints to determine if insurers are failing to respond timely to terminated physicians or providers. The subsection is designed to provide a review process for a physician before termination without imposing additional cost on the insurer by requiring the advisory review panel only if requested by the affected physician. The agency agrees that the recommendations of the panel and any decision of the insurer if contrary to the panel's recommendation should be provided to the affected physician upon request, and the subsection has been changed accordingly. Provisions have been included which would permit immediate action in the event of imminent threat of harm to patients. The commissioner rejects the suggestion that review panels not be used when a termination is for economic reasons because a meaningful review mechanism must apply equally to all terminations. If the review panel were required only when a physician is terminated for non- economic (quality of care) reasons review would rarely be afforded because most insurers would simply state that the termination is for economic reasons thus the insurer could avoid detailing a quality of care reason for termination and review. There may be many appropriate reasons for termination of a physician or provider's participation in a PPO plan and the department does not believe it is necessary or advisable to attempt to list them in an agency rule. Section 3.3705(4) (changed to sec.3.3705(5))-Economic Profiling. Many commenters supported the disclosure of economic profiling information to physicians and providers. Supporters of disclosure also opposed the "market strategies" exception as unclear or as a loophole which would defeat the purpose of the subsection and requested additional language requiring that economic profiling be adjusted for case mix and other factors which may affect higher or lower costs. Other commenters opposed the section as vague, burdensome and costly, requiring the disclosure of private business information and benefiting providers rather than patients. Several commenters suggested that the entire section be deleted. Some commenters who objected to the disclosure of economic profiling stated that the types of risk adjustment mechanisms used by insurers are crude, uncertainty about their effectiveness of practicality exists and that the meaning of economic profiling is unclear. One commenter suggested that if economic profiling information is shared with physicians, it should also be made available to purchasers. Some commenters requested that if the section is retained, it should be narrowed to be provided only upon written request to require only that an insurer provide written criteria to a terminated provider if economic profiling is part of the reason for termination. Agency Response: Commenters have explained that the term "economic profiling" is a term of art used to describe the evaluation of a particular physician or provider based on comparisons of money expended by that physician or provider in relation to other physicians or providers in the network. The department accepts that definition for the term as used in this subsection. The department accepts the objection that mandated disclosure of detailed economic measurements of individual performance by all preferred physicians or providers to any requesting physician or provider could be burdensome to the insurer. However, if such evaluations are used, an affected physician or provider should have access to the criteria by which the physician or provider is measured and to the physician's or provider's own economic profile. The language of the subsection has been amended to limit required disclosure accordingly. Narrowing the information available to that pertinent only to a requesting physician or provider obviates the need for the "market strategies" exception, which has been deleted. Section 3.3705(6)-Deleted Section Deeming Compliance. One commenter supported the deletion of the subsection deeming insurers to be in compliance with the requirements of the subchapter upon approval of policy forms. One commenter opposed the deletion of this subsection. Agency Response: The agency agrees that the provision should be deleted. The agency believes that this provision as written was not binding on the agency and was unnecessary. Also, several amended and new sections of the subchapter create ongoing obligations which cannot be met merely upon review and approval of a policy form. Section 3.3705(6) (changed to sec.3.3705)-Utilization Review. One commenter opposed the language referencing the provisions of Article 21.58A on the basis that it removes opportunities for the participating community practitioner to have input into the insurer's utilization review process. Agency response: The agency believes that changes should be made to the prior subsection concerning utilization review. Actions taken related to utilization review are governed by the provisions of Article 21.58A, Texas Insurance Code and Subchapter R of Chapter 19 of Texas Administrative Code. The original adoption of this subsection predates those laws. The changes to this subsection are necessary to avoid discrepancies or duplication in the requirements related to utilization review. Upon review of this comment, however, the agency believes that as defined in sec.3.3702, the term "utilization review" is inconsistent with the definition contained in Article 21.58A and should be revised to be consistent with that article. The agency has revised this definition accordingly. The agency believes the commenter may have misunderstood the agency's intent in revising this subsection. The agency does not intend for the revised subsection to diminish the treating physician's role in the utilization review process and does not believe the revised subsection will have that effect. Section 3.3705(7) (changed to sec.3.3705(8))-Hold-harmless provision. A few commenters requested that the hold-harmless provision be expanded to include a provision similar to that in the HMO rules 28 Texas Administrative Code, sec.11. 1102 in which a provider would agree to look only to the insurer for payment and not to the insured. Agency response: Expanding the hold-harmless provision as requested is a new issue that is beyond the scope of this rulemaking. The agency will study this issue to determine whether it may be appropriate for future rulemaking. Because of the number of proposed amendments to these rules and the complexity of the issues raised, it is difficult to categorize the comments as either "for" or "against" adoption of the rules. Most commenters expressed some level of support for the amendments and offered some criticisms or suggested changes; those commenters are listed as "for with changes". A few commenters offered no positive comments and objected to certain provisions in the rules; those commenters are listed as "against". No commenter suggested that the proposed amendments be withdrawn. For with changes: Advocacy, Inc., Alliance for Managed Care-Aetna, American Medical Security, American National Insurance Company, Baylor University Medical Center, The Beacon, Blue Cross and Blue Shield of Texas, Brinker International, Center for Public Policy Priorities, City of Houston, Clark, Thomas & Winters, Clear Lake Rehabilitation Association, Consortium of Texas Certified Nurse- Midwives, Consumers Union, Coronado Hospital, Disability Policy Consortium, Doctors Hospital, DuPont Human Resources, EmCare, Group Health Association of America, Harris County Medical Society, Haynes & Boone, Health Insurance Association of America, Holy Family Services, individual advanced practice nurses, individual certified nurse-midwives, individual consumers, individual emergency physicians, Jenkens & Gilchrist, John Hancock Mutual Life Insurance Company, Kaiser Foundation Health Plan of Texas, M. D. Anderson Cancer Center, Mental Health Association in Texas, Metroplex Emergency Physician Association, National Association of Dental Plans, Office of Public Insurance Counsel, Parkland School of Nurse-Midwifery, Pharmaceutical Research, Scott & White Hospital, Society of Oral and Maxillofacial Surgeons, Texas Academy of Family Physicians, Texas Association of Home Care, Texas Association of Insurance Officials, Texas Association of Nurse Anesthetists, Inc., Texas Association of Retail Optometry, Texas Business Group on Health, Texas Citizens for a Sound Economy, Texas College of Emergency Physicians, Texas Dental Association, Texas Disability Consortium, Texas HMO Association, Texas Hospital Association, Texas Legal Reserve Officials Association, Texas Life Insurance Association, Texas Medical Association, Texas Nurses Association, Texas Occupational Therapy Association, Texas Osteopathic Medical Association, Texas Planning Council for Developmental Disabilities, Texas Psychological Association, Texas Society of Pathologists, Texas Speech-Language-Hearing Association, Third Coast Emergency Physicians, United Cerebral Palsy of Texas, Inc. Against: Boon-Chapman, Golden Rule Insurance Co., Texas Association of Business & Chambers of Commerce, United Healthcare Dental, Inc., USA Health Network, Wadley Regional Clinic. The amendments are adopted under the Insurance Code, Articles 1.03A, 3.42(i) and (p) (as amended by Senate Bill 1637 enacted by the 74th Legislature; 3. 51- 6, sec.3 and sec.5; 3.70-2(B); 3.70-3(A)(9); 21.21, sec.3, sec.4(1) and (2) and sec.13; 21.21-6, sec.1 and sec.3 (as added by House Bill 1367 enacted by the 74th Legislature); 21.21-8, sec.2 (as added by House Bill 668 enacted by the 74th Legislature); 21.52; 21.58A, sec.13; 26.08; 26.71 (as amended by House Bill 369 enacted by the 74th Legislature); 26.75 (as amended by House Bill 369 enacted by the 74th Legislature) and the Government Code sec.2001.004 et seq. (Administrative Procedure Act). Article 3.42(i) authorizes the Commissioner of Insurance to disapprove any policy form which is unjust or which does not comply with the Insurance Code. Article 3.42(p) authorizes the commissioner to adopt reasonable rules to implement and accomplish the purposes of Article 3. 42, concerning review and approval of policy forms. Article 3.51-6, sec.3 provides that a group accident and health policy may not require that a service be rendered by a particular hospital or person. Article 3.51-6 sec.5 authorizes the commissioner to issue rules to carry out the provisions of Article 3.51-6, concerning group accident and health insurance. Article 3. 70-3(A)(9) provides that payment of claims other than indemnity for loss of life or accrued indemnities remaining unpaid at the death of the insured shall be payable to the insured. Articles 21.21 sec.3 and sec.4(1) and (2) prohibit untrue, deceptive or misleading statements with respect to the business of insurance. Article 21.21, sec.13 authorizes the commissioner to promulgate rules as necessary to accomplish the purposes of Article 21.21, concerning unfair practices. Article 21.21-6, sec.1 and sec.3 define and prohibit unfair discrimination in the business of insurance. Article 21.21-8, sec.2 prohibits the making or permitting of any unfair discrimination between individuals of the same class and of essentially the same hazard in the amount of premium, policy fees or rates charged for any policy of insurance, or in the benefits payable thereunder, or in any of the terms or conditions of the contract, or in any other manner whatever. Articles 3.70-2(B) and 21.52 require freedom of choice for the insured in selecting a practitioner under health and accident insurance policies. Article 21.58A, sec.13 authorizes the commissioner to adopt rules to implement the provisions of that article, concerning utilization review to determine the medical necessity and appropriateness of health care services. Article 26.08 provides that small employer health benefit plan carriers may use cost containment and managed care features in a small employer health benefit plan, including different benefits applicable to providers that participate or do not participated in restricted network arrangements, and provides that utilization review must comply with Article 21. 58A. Article 26.71 requires the fair marketing of small employer health benefit plans and authorizes the department to require submission of data concerning those plans. Article 26.75 authorizes the commissioner to adopt rules providing for the fair marketing and broad availability of small employer health benefit plans. Article 1.03A provides that the Commissioner of Insurance may adopt rules and regulations to execute the duties and functions of the Texas Department of Insurance. The Government Code, sec.2001.004 et seq. authorizes and requires each state agency to adopt rules of practice setting forth the nature and requirement of available procedures and prescribes the procedures for adoption of rules by a state administrative agency. The following statues are affected by these sections: Articles 3.42, 3.51-6; 3.70-2; 3.70-3; 21.21; 21.21-6; 21.21-8; 21.52; 21.58A; 26.08; 26.71 and 26. 75. sec.3.3701. Scope. The sections of this subchapter apply to a preferred provider plan in which an insurer, as defined in sec.3.3702 of this title (relating to Definitions) provides through its health insurance policy for the payment of a level of coverage which is different from the basic level of coverage provided by the health insurance policy, if the insured uses a preferred provider. The sections of this subchapter do not apply to nor do they sanction any plan arranged or provided for by any provider, employer, union, third-party entity, or any person or entity other than an insurer authorized to engage in the business of health insurance in this state. The sections of this subchapter do not apply to provisions for dental care benefits in any health insurance policy. This subchapter is not an interpretation of and has no application to any law requiring licensure to act as a principal or agent in the insurance or related businesses including, but not limited to, health maintenance organizations. The provisions of this subchapter shall be subject to the Insurance Code, Articles 3.70-2(B) and 21. 52, as they relate to insurers and the practitioners named therein. These sections do not create a private cause of action for damages or create a standard of care, obligation or duty that provides a basis for a private cause of action. These sections do not abrogate a statutory or common law cause of action, administrative remedy or defense otherwise available. If any terms, sections or subsections of this subchapter are determined by a court of competent jurisdiction to be inconsistent with the Texas Insurance Code or invalid for any reason, the remaining terms, sections or subsections of this subchapter will continue in effect. sec.3.3702. Definitions. The following words and terms, when used in this subchapter, have the following meanings, unless the context clearly indicates otherwise. Emergency care -As defined in Insurance Code Article 3. 70-2(I). Health care provider or provider-Any practitioner (other than a physician), institutional provider, or any other person or organization that furnishes health care services, and that is licensed or otherwise authorized to practice in this state. Health insurance policy-A group or individual insurance policy or contract providing benefits for medical or surgical expenses incurred as a result of an accident or sickness, which is approved under the Insurance Code, Article 3.42. Hospital-A licensed public or private institution as defined by the Texas Hospital Licensing Law, Texas Civil Statutes, Article 4437f, or by the Texas Mental Health Code, sec.88, Texas Civil Statutes, Article 5547-88. Institutional provider -A hospital, nursing home, or any other medical or health-related service facility caring for the sick or injured or providing care for other coverage which may be provided in a health insurance policy. Insurer-Any life, health, and accident; health and accident; or health insurance company or company operating pursuant to the Insurance Code, Chapters 3, 10, 20, 22 and 26, as amended, authorized to issue, deliver, or issue for delivery in this state health insurance policies approved under the Insurance Code, Article 3.42. Medical care-Furnishing those services defined as the practice of medicine in the Medical Practice Act of Texas, Texas Civil Statutes, Article 4495b. Physician-Anyone licensed to practice medicine in the State of Texas. Practitioner-One who practices a healing art and is specified in the Insurance Code, Article 3.70-2(B) or 21.52. Preferred provider -A physician, practitioner, hospital, institutional provider, or health care provider, or an organization of physicians or health care providers who contracts with an insurer to provide medical care or health care to insureds covered by a health insurance policy as authorized by law and this subchapter. Prospective insured -For group coverage, an individual, including dependents, eligible for coverage under a health insurance policy issued to the group. For individual coverage, an individual, including dependents, eligible for coverage who has expressed an interest in purchasing an individual health insurance policy. Quality assessment -A mechanism which is in place or put into place and utilized by an insurer for the purposes of evaluating, monitoring, or improving the quality and effectiveness of the medical care delivered by physicians or health care providers to persons covered by a health insurance policy to insure that such care delivered is consistent with that delivered by an ordinary, reasonable, prudent physician or health care provider under the same or similar circumstances. Service area-A geographic area or areas set forth in the health insurance policy or preferred provider contract. Utilization Review -A system for prospective or concurrent review of the medical necessity and appropriateness of health care services being provided or proposed to be provided to an individual within this state. Utilization review shall not include elective requests for clarification of coverage. sec.3.3703. Requirements. A health insurance policy that includes different benefits from the basic level of coverage for use of preferred providers shall not be considered unjust under the Insurance Code, Article 3.42, or unfair discrimination under the Insurance Code, Articles 21. 21-6 or 21.21-8, or to violate Article 3.70-2(B) or 21.52 of the Insurance Code, if: (1) physicians, practitioners, institutional providers and health care providers other than physicians, practitioners and institutional providers, if such other health care providers are included by the insurer as preferred providers, licensed to treat injuries or illnesses or to provide services covered by the health insurance policy that comply with the terms and conditions established by the insurer for designation as preferred providers may apply for and shall be afforded a fair, reasonable, and equivalent opportunity to become preferred providers. Such designation shall not be unreasonably withheld. If such designation is withheld relating to a physician, the insurer shall provide a reasonable review mechanism that incorporates an advisory role only by a physician panel. Any recommendation of the physician panel shall be provided upon request to the affected physician. In the event of an insurer determination which is contrary to any recommendation of the physician panel, a written explanation of the insurer's determination shall also be provided upon request to the affected physician. The panel shall be composed of not less than three physicians selected by the insurer from a list of those physicians contracting with the insurer, and shall include one member who is a physician in the same or similar specialty, if available. The list of physicians is to be provided to the insurer by those physicians contracting with the insurer in the applicable service area. The insurer must give a physician or health care provider not designated upon initial application written reasons for denial of the designation; however, unless otherwise limited by Insurance Code, Article 21.52B, this subsection does not prohibit an insurer from rejecting an application from a physician or health care provider based on the determination that the preferred provider plan has sufficient qualified providers. Any insurer, when sponsoring a preferred provider plan, shall notify immediately all physicians and practitioners in the geographic area covered by the plan of its intent to offer such a plan by publication, or in writing to each physician and practitioner of the opportunities to participate. Such notice and opportunities to noncontracting physicians and practitioners as described above shall be provided on a yearly basis thereafter. The insurer shall, upon request, make available information concerning the application process and qualification requirements for participation as a provider in the plan to any physician or health care provider; (2) the terms and conditions of the contract between the insurer and the preferred providers shall be reasonable, shall not violate any law or any section of this subchapter, shall be based solely on economic, quality, and accessibility considerations, and shall be applied in accordance with reasonable business judgment. Exclusive preferred provider contracts under which a physician or health care provider is prevented from contracting with others to provide similar services shall not be permitted under this subchapter. Any term or condition limiting participation on the basis of quality shall be consistent with established standards of care for the profession. In the case of physicians or practitioners with hospital or institutional privileges who provide a significant portion of care in a hospital or institutional setting, terms and conditions may include the possession of practice privileges at preferred hospitals or institutions, except that if no preferred hospital or institution offers privileges to members of a class of physicians or practitioners, the lack of hospital or institutional privileges shall not be a basis for denial of participation to such practitioners of that class. No insurer may contract with a hospital or institutional provider which, as a condition of staff membership or privileges, requires a practitioner to enter into a preferred provider contract. The preferred provider may agree with an insurer to not bill the insured for unnecessary care, if a physician or practitioner panel has determined the care was unnecessary, but the plan shall not require the preferred provider to pay hospital, institutional, laboratory, x-ray, or like charges resulting from the provision of services lawfully ordered by a physician or health care provider, even though such service may be determined to be unnecessary; (3) under the preferred provider plan, the insured shall be provided with direct and reasonable access to all classes of physicians and practitioners licensed to treat illnesses or injuries and to provide services covered by the health insurance policy. There shall be no requirement that the insured be referred by a physician or practitioner of another class or by a subspecialty within the same class, except that a plan may provide for a different level of coverage for use of a nonpreferred provider if a referral is made by a preferred provider. The referring physician or practitioner may not be required to bear the expenses of referral for specialty care in or out of the preferred provider panel. Savings from cost-effective utilization of health services by contracting physicians or health care providers may be shared with physicians or health care providers in the aggregate. An insurer shall not use any financial incentive or make payment to a physician or health care provider which acts directly or indirectly as an inducement to limit medically necessary services. (4) in addition to all other contract rights, violations of these rules shall be treated for purposes of complaint and action in accordance with the Insurance Code, Article 21.21-2, and the provisions of that article shall be utilized insofar as practicable, as it relates to the power of the department, hearings, orders, enforcement, and penalties; (5) the insurer offering preferred provider plans shall, upon request, file with the Texas Department of Insurance all data and information on activities of preferred provider plans in order to assess the impact of these plans on: (A) quality of care; (B) access to care; (C) cost of care; (D) the availability and affordability of accident and health insurance; and (E) the provision of care of the uninsurable or medically indigent sec.3.3704. Freedom of Choice. Pursuant to the Insurance Code, Article 3.51-6, sec.3, and Article 3.70-3(A)(9), no health insurance policy may require that a service be rendered by a particular physician or health care provider. A health insurance policy that includes different benefits from the basic level of coverage for use of preferred providers shall not be considered to unlawfully restrict freedom of choice in the selection of physicians or health care providers by insureds provided: (1) (No change.) (2) the rights of an insured to exercise full freedom of choice in the selection of physician, hospital or practitioner are not restricted by the insurer, and physicians and health care providers shall be free to join one or more insurance plans or other preferred provider plans or HMOs whether or not sponsored by an insurance carrier or HMO; (3) the insurer shall establish reasonable procedures for assuring a transition of insureds to physicians or health care providers and for continuity of treatment, including providing reasonable advance notice to the insured of the impending termination from the plan of a physician or health care provider who is currently treating the insured and making available to the insured a current listing of preferred providers, in the event of termination of a preferred provider's participation in the plan. Each contract between an insurer and a physician or health care provider must provide that the termination of a preferred provider's participation in the plan, except for reason of medical competence or professional behavior, shall not release the physician or health care provider from the generally recognized obligation to treat the insured and cooperate in arranging for appropriate referrals or release the obligation of the insurer to reimburse the physician or health care provider or, if applicable, the insured at the same preferred provider rate if, at the time of preferred provider termination, the insured has special circumstances such as a disability, acute condition, or life threatening illness or is past the 24th week of pregnancy and is receiving treatment in accordance with the dictates of medical prudence. Special circumstances mean a condition such that the treating physician or health care provider reasonably believes that discontinuing care by the treating physician or provider could cause harm to the patient. Special circumstances shall be identified by the treating physician or health care provider who must request that the insured be permitted to continue treatment under the physician or provider's care and agree not to seek payment from the patient of any amounts for which the insured would not be responsible if the physician or health care provider were still a preferred provider. Contracts between an insurer and physicians and health care providers shall include procedures for resolving disputes regarding the necessity for continued treatment by the physician or health care provider. This section does not extend the obligation of the insurer to reimburse, at the preferred provider rate, the terminated physician or health care provider or, if applicable, the insured for ongoing treatment of an insured beyond 90 days from the effective date of the termination; (4) if the insurer is issuing other health insurance policies in the service area that do not provide for the use of preferred providers, then the basic level of coverage must be reasonably consistent with such other health insurance policies offered by the insurer which do not provide for a different level of coverage for use of a preferred provider. (5) an insurer shall provide reimbursement for the following emergency care services at the preferred provider level of benefits if the insured cannot reasonably reach a preferred provider and until the insured can reasonably be expected to transfer to a preferred provider: (A) any medical screening examination or other evaluation required by state or federal law to be provided in the emergency department of a hospital which is necessary to determine whether a medical emergency condition exists; (B) necessary emergency care services including the treatment and stabilization of an emergency medical condition; and (C) services originating in a hospital emergency department following treatment or stabilization of an emergency medical condition. (6) Physicians or health care providers may refer an insured to other than preferred providers, provided that the insured is advised that a different indemnity payment may apply. If services are not available through preferred providers, nonpreferred providers shall be reimbursed at the same rate as the preferred providers would have been reimbursed had the insured been treated by them; (7) all health insurance policies, health benefit plan certificates, endorsements, amendments, applications or riders shall be written in plain language, must be in a readable and understandable format and must comply with Texas Department of Insurance rules found in 28 Texas Administrative Code, Chapter 3, Subchapter G. The insurer shall provide to a prospective group contract holder and prospective insured upon request an accurate written description of the terms and conditions of the policy to allow the prospective group contract holder or prospective insured to make comparisons and informed decisions before selecting among health care plans. The written description must be in a readable and understandable format, by category, and must include a clear, complete and accurate description of these items in the following order: (A) a statement that the entity providing the coverage is an insurance company, the name of the insurance company, and that the insurance contract contains preferred provider benefits; (B) a toll free number, unless exempted by statute or rule, and address for the prospective group contract holder or prospective insured to obtain additional information; (C) an explanation of the distinction between preferred and nonpreferred providers; (D) all covered services and benefits, including payment for services of a preferred provider and a nonpreferred provider, and prescription drug coverage, both generic and name brand; (E) emergency care services and benefits and information on access to after- hours care; (F) out of area services and benefits; (G) an explanation of the insured's financial responsibility for payment for premiums, deductibles, coinsurance or any other out-of-pocket expenses for noncovered or nonpreferred services; (H) any limitations and exclusions, including the existence of any drug formulary limitations, and any limitations regarding preexisting conditions; (I) any prior authorizations, including preauthorization review, concurrent review, post-service review, and postpayment review and any penalties or reductions in benefits resulting from the failure to obtain any required authorizations; (J) provision for continuity of treatment in the event of termination of a preferred provider's participation in the plan; (K) summary of complaint resolution procedures, if any, and a statement that the insurer is prohibited from retaliating against the insured because the insured or other person has filed a complaint on behalf of the insured and against a physician or provider who, on behalf of the insured, has reasonably filed a complaint against the insurer or appealed a decision of the insurer; (L) 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; (M) service area; (8) A copy of the written description of the terms and conditions of the policy to be made available to prospective group contract holders and prospective insureds as required in paragraph (5) of this subsection shall be filed with the department. A current list of preferred providers and the insurer's service area shall be filed with the department annually by June 1; (9) the health insurance policy and all promotional, solicitation, and advertising material concerning the health insurance policy shall clearly describe the distinction between preferred and nonpreferred providers. Any illustration of preferred provider benefits must be in close proximity to an equally prominent description of basic benefits. A list of preferred providers shall be distributed to all prospective insureds. Any change in the list of preferred providers shall be provided to all insureds no less than annually to all insureds. Unless exempted by statute or rule, the insurer shall provide to each insured a toll free number to be maintained 40 hours per week during regular business hours that the insured can call to obtain a current up-to-date list of preferred providers; (10) no insurer, or agent or representative thereof, may cause or permit the use or distribution of prospective insured information which is untrue or misleading; (11) both preferred provider benefits and basic level benefits must be reasonably available to all insureds within a designated service area; (12) payment by the insurer shall be made for services of a nonpreferred provider in the same prompt and efficient manner as to a preferred provider; (13) the insurer will make a good faith effort to have a mix of for-profit, non-profit, and tax-supported institutional providers under contract as preferred providers in the plan's service area to afford all persons insured under such plan freedom of choice in the selection of institutional providers at which they will receive care, unless such a mix proves to be not feasible due to geographic, economic, or other operational factors. In addition, special consideration shall be given to contracting with teaching hospitals and hospitals providing indigent care or care for uninsured individuals as a significant percentage of their overall patient load. sec.3.3705. Procedure to Assure Adequate Treatment. Insurers which market a preferred provider plan must contract with physicians and health care providers to assure 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 assuring both availability and accessibility of adequate personnel, specialty care, and facilities. (1) Each insured patient shall have the right to treatment and diagnostic techniques as prescribed by the physician, or other health care provider included in the plan. (2) Every contract by an insurer with a physician or physician group shall have a mechanism for the resolution of complaints initiated by the insured, physicians, or physician organization. Such mechanism shall provide for reasonable due process which includes and advisory role only by a physician panel selected in the manner provided in sec.3.3703(1) of this title (relating to Requirements). (3) No insurer shall engage in any retaliatory action against an insured, including cancellation or refusal to renew a policy, because the insured, or person acting on behalf of the insured, has filed a complaint against the insurer or against a preferred provider or has appealed a decision of the insurer. No insurer shall engage in any retaliatory action against a physician or provider, including termination or refusal to renew a contract, because the physician or provider has, on behalf of an insured, reasonably filed a complaint against the insurer or has appealed a decision of the insurer. (4) Before terminating a contract with a preferred provider, the insurer shall provide written reasons for termination. Prior to termination of a physician, the insurer shall, upon request, provide a reasonable review mechanism that incorporates an advisory role only by a panel selected in the manner provided in sec.3.3703(1) of this title (relating to Requirements), except in cases in which there is imminent harm to patient health or an action by a state medical or other physician licensing board or other government agency that effectively impairs the physician's ability to practice medicine or in cases of fraud or malfeasance. Any recommendation of the physician panel shall be provided to the affected physician. In the event of an insurer determination which is contrary to any recommendation of the physician panel, a written explanation of the insurer's determination shall also be provided upon request to the affected physician. (5) An insurer that conducts, uses or relies upon economic profiling to admit or terminate physicians or health care providers shall make available to a physician or health care provider upon request, the economic profile of that physician or health care provider, including the written criteria by which the physician or health care provider's performance is to measured. An economic profile must be adjusted to recognize the characteristics of a physician's or health care provider's practice that may account for variations from expected costs. (6) No insurer shall engage in quality assessment, as defined herein, unless the insurer does so through a physician panel of not less than three physicians selected by the insurer from among a list of physicians contracting with the insurer, which list is to be provided by those physicians contracting with the insurer in the applicable service area. (7) Actions taken by an insurer engaged in utilization review, as defined in sec.3.3702 of this title (relating to Definitions), shall be taken pursuant to Insurance Code, Article 21.58A, and Subchapter R of Chapter 19 of this title. (8) A preferred provider contract may not require any health care provider, physician or physician group to execute hold-harmless clauses in order to shift the insurer's tort liability to the preferred provider. (9) An insurer may enter into an agreement with a preferred provider organization for the purposes of offering a network of preferred providers. The agreement may provide that the notice and other insurer requirements of this subchapter may be complied with by either the insurer or the preferred provider organization on behalf of the insurer. If an insurer enters into an agreement with a preferred provider under this section, it is the insurer's responsibility to meet the requirements of this subchapter or to assure that the requirements are met. All preferred provider insurance benefit plans offered in this state shall comply with the requirements of this subchapter. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on November 15, 1995. TRD-9514859 Alicia M. Fechtel General Counsel and Chief Clerk Texas Department of Insurance Effective date: December 6, 1995 Proposal publication date: July 25, 1995 For further information, please call: (512) 463-6327 Chapter 11. HMO's The Texas Department of Insurance adopts amendments to Chapter 11, sec.sec.11. 1, 11.2, 11.204, 11.301 and new sec. sec.11.1103, 11.1500, 11.1501, and 11.1600- 11. 1603, concerning health maintenance organizations, with changes to the proposed text as published in the July 25, 1995 issue of the Texas Register (20 TexReg 5475). These amendments address the Governor's directive that the Commissioner of Insurance enact rules to maintain quality of health care for all Texans at affordable prices and to establish procedures for fairness to health care providers. Protection of patients in the rapidly changing health care marketplace requires these updated regulations. These amendments are necessary to assist consumers in making informed choices among health maintenance organization (HMO) health care plans; to prohibit retaliation against enrollees and group contract holders (employers) for filing complaints or appealing decisions of an HMO; to provide for continuity of patient care; to provide for reimbursement of necessary emergency care services; to provide fairness to physicians and providers not designated as HMO plan providers or terminated from the HMO plan and to assist the department in evaluating quality and costs of health care. The amendments as adopted differ in some respect from the proposed published amendments based on further study generated by comments received. Specific changes and reasoned justification for the amendments and agency responses to comments are addressed in Section 4, Summary of Comments. The amendments to this chapter shall become effective on December 6, 1995. Section 11.1, as amended, provides that Subchapter C, sec.11.204(17)-(20) (relating to Contents); Subchapter D, sec.11.301(4)(L) and (5)(I), (J) and (K) (relating to Filing Requirements); Subchapter L, sec.11.1103 (relating to Continuity of Treatment); Subchapter P, sec.11.1500 (relating to Retaliation) and sec.11.1501 (relating to Prohibited Payments); and Subchapter Q, sec.sec.11. 1600 (relating to Information to Prospective Group Contract Holders and Enrollees), 11.1601 (relating to Admissions and Terminations of Physicians and Providers), 11.1602 (relating to Primary Care Selection) and 11.1603 (relating to Capitation) do not create a private cause of action. Section 11.2(b), as amended, defines "dentist" and "emergency care", and changes the definition of "capitation". These terms are necessary to clarify the meaning of these amendments. New sec.11.2(b)(14) changes the definition of "primary care physician" to include physicians and providers. In addition, new sec.11.2(b)(15) defines "prospective enrollee" to clarify the meaning of this term used in new sec.11.1600 (relating to Information to Prospective Group Contract Holders and Enrollees), 11.11.204(17) (relating to Contents) and sec.11.301(5)(I) (relating to Filing Requirements). Proposed new sec.11.2(b)(19), a definition of "single health care service plan", was deleted and will be published for proposal in the future in conjunction with additional rules which will address additional issues raised in comments related to this proposed definition. Section 11.204, as amended, adds paragraphs (17) through (20) to require that the contents of the application for a certificate of authority include a written description of health care plan terms and conditions to be provided prospective enrollees, provider network configuration information, written disclosure of types of compensation arrangements, and documentation demonstrating the health care plan contains certain prescribed procedures and provisions for coverage of emergency care services. Section 11.301, as amended, adds a sentence to paragraph (4) to require an HMO, after receiving its certificate of authority, to file information required by any amendment to sec.11.204 (relating to Contents) which has not been previously filed with and approved by the commissioner. Section 11.301, as amended, adds paragraph (4)(L) to require an HMO, after receiving its certificate of authority, to file with the commissioner for approval any material change in the plan's emergency care procedures. Section 11.301, as amended, adds paragraphs (5)(I), (J) and (K) to require an HMO, after receiving its certificate of authority, to file with the commissioner for information any modifications to the written description of health care plan terms and conditions for prospective group contract holders and enrollees, any types of compensation arrangements made to physicians and providers, and any material change in network configuration. New sec.11.1103 requires each contract between an HMO and a physician or provider of health care services to provide for reasonable advance notice to an enrollee of the impending termination of a treating physician or provider from the network and, upon request by the treating physician or provider, for continuity of ongoing treatment for enrollees with special circumstances for up to 90 days after the effective date of termination of the treating physician or provider. New sec.11.1500(a) provides an HMO may not take retaliatory action against a group contract holder or an enrollee because the group contract holder or enrollee has complained about the HMO. New sec.11.1500(b) provides an HMO may not take retaliatory action against a physician or provider who has reasonably complained on behalf of an enrollee. New sec.11.1501 provides that an HMO may not use any financial incentive or make payment to a physician or provider which acts as an inducement to limit medically necessary services. Proposed new sec.11.1502 was deleted based on comments that the section is unnecessary and redundant. New sec.11.1600 requires an HMO to provide to any group contract holder or enrollee upon request a written disclosure of certain information about the HMO health care plan. This section enhances the ability of consumers and their employers to make informed choices among HMO plans. New sec.11.1601 requires an HMO to make application information available to interested providers, offer written reasons for denial or termination of providers, and make available to physicians and providers economic profiling information used by the HMO. New sec.11.1602 requires an HMO to include a space on each plan application form for an enrollee to make a selection of a primary care physician or provider. New sec.11.1602 further provides an HMO must offer enrollees the opportunity to select or change a primary care physician or provider within the HMO network of available primary care physicians and providers, and provides for a limitation of an enrollee's request to change a primary care physician or provider to four changes in any 12-month period. New sec.11.1603(1) provides that capitation payments to a primary care physician or provider must begin within 90 days of selection or assignment, calculated from the date of enrollment, or if selection does not occur, the HMO must reserve the capitation payable until a selection or assignment is made. New sec.11.1603(2) provides that if an enrollee does not select a primary care physician or provider, the HMO must assign an enrollee to a primary care physician or provider who is located in a zip code nearest to the enrollee's residence or place of employment. Assignments must be in a manner that result in a fair and equal distribution of enrollees among primary physicians or providers. New sec.11.1603(3) provides an HMO may propose to the department an alternative capitation plan that provides for immediate availability and accessibility to a primary care physician or provider and adequately compensates the primary care physician or provider for risk assumed. Most commenters expressed general support for the proposed rule amendments and offered comments or concerns on specific sections of the proposed amendments. Several commenters stated that the rules were a positive step in establishing meaningful standards for managed care; a large number of commenters specifically supported the emergency care and disclosure provisions. Several commenters asked that language in the PPO and HMO rules be made as consistent as possible. Some commenters asked that the department work closely with the Texas Department of Health to clarify the roles of each agency in the regulation of HMOs and one commenter asked that the written agreement between the two agencies be made public so that people would know which agency has responsibility for which issue. One commenter asked that "clinically appropriate" be substituted wherever "medically necessary" appears. One commenter expressed general support for the rules but cautioned that these issues really call for legislative action and that the rules should not be viewed as a substitute for broad and comprehensive legislative action. Other commenters expressed generally negative comments about interference with private contractual relationships and conferring special rights on specific groups, particularly physicians and other providers of health care. Several commenters expressed concerns that the rules would drive up costs, including costs to small businesses, thus denying access to group health care for some Texas workers. Some commenters stated that the rules appeared to slant more toward fair treatment of providers rather than allowing the marketplace to set lower negotiated fees for medical care. Some commenters questioned the department's authority to promulgate specific benefits or regulate HMO provider contracting. Agency response: The agency received approximately 200 written comments on the rules as well as numerous oral comments at the public hearing. The agency appreciates the comments received and the information provided at the public hearing. The agency will carefully monitor the operation of these rules and consumer complaints it receives to determine if additional changes need to be made to the rules in the future. The commissioner recognizes that legislative action may also change department rules in the future but believes these amendments are necessary now to maintain quality of care and protect patient freedom of choice. The department has attempted to make the rule requirements consistent for both PPOs and HMOs. However, because there were already rules in place for one type of plan or the other and because of the differences in how the different types of plans operate, it was not always possible to use identical language. If existing rule language in the Chapter 3 (PPO) rules, for example, had not generated problems, staff's goal was not to disturb those provisions even if the corresponding new provisions in the HMO rules were somewhat different. The department and the Texas Department of Health have already worked to ensure the compatibility of the two agencies' rules and will continue to coordinate compliance efforts. The memorandum of understanding between the two agencies will be a public document. The commissioner has not adopted the suggestion that "clinically appropriate" be substituted for "medically necessary" wherever it appears in the rules, but has reviewed the rules carefully to ensure that the intended standard is stated. In many cases, the word "medically" was deleted. The agency responds to objections that the department is interfering with private contractual relationships by stating that it is carrying out the intent of the legislature and the governor that the department enact rules regarding the operation of managed health care plans to ensure affordable, quality health care for Texans. Through the Insurance Code, the legislature has recognized a public interest in the regulation of health insurance and has delegated to the commissioner the responsibility to ensure managed care plans contain minimum standards; thus the commissioner has the authority to impose requirements on otherwise private contractual arrangements. Fairness to the actual providers of the health care is necessary to the continued availability of quality care. Staff and the commissioner have made every effort to avoid imposing measures that would significantly increase the cost of health coverage. Although several commenters expressed concerns over cost, only one commenter submitted data projecting a premium cost increase of up to 17.2%. The prohibition on financial incentives accounted for 15% of this projected increase and was based on the commenter's incorrect assumption that the language would prohibit all financial incentives, including those for delivering appropriate, cost effective, high quality care. At the public hearing on these proposed amendments, the commenter conceded that the proposed staff modifications to the amended language in the three provisions cited as causing expected cost increases would significantly reduce costs. He was unable to give revised figures. The rules do not themselves mandate specific benefits but rather clarify how statutory mandates shall be carried out. Additional provisions requested. Several commenters suggested that the rules require the Office of Public Insurance Counsel (OPIC) to issue an annual HMO performance report which would be available to the public at a nominal cost and to allow OPIC access to the department and Texas Department of Health statistical information regarding utilization, quality assurance and complaints. One commenter requested that the department issue an annual report on the performance of HMOs in Texas. One commenter asked for special attention to elderly enrollees including specific rules governing Medicare HMOs. Another commenter recommended that the agency promulgate rules to require HMOs that serve Medicare enrollees, who are residents of a nursing facility or retirement community to choose from among any skilled nursing care provider in an HMO's network that can best meet the enrollees' needs, including the need to remain within the enrollees' own retirement communities. This commenter also recommended that residents of Continuing Care Retirement Communities (CCRCs) be allowed to use the skilled nursing care they receive in their residential facility regardless of whether or not the CCRC is a network provider. Some commenters asked that "any willing provider" or "point of service" provisions be included in the rules. One commenter asked that the rules specify that information provided to the department is an open record unless the department determines the information to be proprietary and recommended that the department work with the Texas Health Care Information Counsel to provide data to facilitate consumer decisions. One commenter asked that a section be added prohibiting "hold-harmless" clauses shifting any of the HMO's tort liability to the provider. Several commenters suggested that the term "dentist" be included in these amendments, including use of the term "dentist" in addition to, or in lieu of, the term "provider". Some commenters have requested that providers offering certain specialized services be required on all HMO networks. A commenter stated that access numbers for emergency numbers (on patient cards) and information provided to hospitals should be required. Agency response: House Bill 2766 (The Patient Protection Act) contained a provision requiring an annual report by OPIC, but department rules cannot require actions by another state agency. The department does intend to publish information regarding the performance of HMOs and OPIC will have access to all information collected by the department and the Texas Department of Health except that which is exempt from disclosure under the Texas Open Records Act. These rules are for general application; the department shares the commenter's concern over HMOs offering coverage to Medicare beneficiaries and will be monitoring activities and complaints to determine if additional rulemaking is necessary. The department will examine the issue of tort liability shifting by HMOs for possible future rulemaking. The agency believes that use of the term "dentist" in these sections in addition to the term "provider" is not necessary unless the agency intends to refer to "a dentist" or "dentists" specifically. The definition of "provider" in the HMO Act includes dentists. The Texas Department of Health examines the sufficiency of network providers for certain specialized covered services, but this department is considering for future rules provisions that HMO enrollees have access to appropriate physicians and providers for all covered services. The agency believes that certain information should be required to be on enrollee cards and such recommendation will be considered for future revisions to the HMO rules. Section 11.1(4)-Cause of action. Some commenters supported inclusion of language specifying that rules do not create a private cause of action or create a standard of care. Other commenters objected strongly to this language, stating that the department has no authority to limit private causes of action or restrict a standard of care set forth in agency rules. Some commenters emphasized that the lack of a private right of action places all enforcement responsibility on the department and urged the department to create data categories to analyze complaints and to coordinate with the Texas Department of Health to compile information, investigate complaints and take enforcement action. Agency response: This language does not change any existing law but only emphasizes that these rules are administrative rules. Violation subjects the violator to administrative action by the commissioner but does not affect private causes of action. In other words, these rules cannot form the basis of a private lawsuit, nor can they diminish other rights of action or defenses. They do not create a standard of care upon which a private action can be based unless they are specifically incorporated by reference into a private contractual arrangement. Because of recent legislative action regarding private actions based on department rules, the commissioner believes it is important to emphasize the nature of these rules and rejects suggestions that the provision be deleted. The commissioner and staff recognize that the burden of collecting data and enforcing these rules is with this agency and the Texas Department of Health and both agencies have committed to working together to ensure compliance with the laws and rules governing managed care plans. Section 11.2(B)(5)-Definitions-Capitation. While no commenters opposed the new definition of capitation, some commenters criticized deleting the prior definition of capitation (average amount of money required per enrollee to administer health plan and provide services for specified time period), stating that it is also an accurate definition of capitation. The amended definition, (method of compensation-per member/per month) is only one way capitation is used and commenters argue that both definitions should be retained. Several commenters state that the phrase "and guaranteeing payment of " should be deleted because it is confusing. Other commenters suggested that specifying "per month" is too restrictive and that the definition should be broadened to "specified time period". Agency response: Capitation payments are key to the operation of HMOs and must be defined; while the old definition is also "capitation", the new definition defines how "capitation" is used in these rules. The "guarantee" phrase was inserted to clarify that payment was for agreement to provide services and providing them as needed regardless of whether the services were actually used. The phrase is not necessary to the definition and has been deleted as suggested by commenters. The commissioner agrees with commenters that "per month" should be changed to "specified period of time" to allow flexibility. Section 11.2(B)(9)-Definitions-Emergency care. Several commenters stated that the definition of "emergency care" needs clarification because the definition does not specify in whose mind (the patient's, the treating physician's or the utilization review agent's) a medical condition could reasonably be expected to result in the adverse consequences set out in the definition. These commenters requested the inclusion of a prudent layperson standard against which the reasonableness of the expectation could be judged. A few commenters suggested that the words "sudden onset" be deleted from the definition or defined to include situations in which a condition can build gradually over time and steadily worsen to the point a patient seeks emergency treatment. Another commenter requested that the definition be broadened to expressly include dental emergencies. Other commenters recommended that the definition be adopted as proposed. Agency response: The definition of emergency care in the rules is taken from the HMO Act, Insurance Code, Article 20A.02(t). The agency does not believe it is necessary to clarify this statutory definition. The agency believes that the existing definition includes the expectation of a prudent layperson. The definition also encompasses, in appropriate circumstances, dental emergencies and situations requiring treatment for an acute medical condition in the case where a condition began several days earlier but gradually worsened over time to the point at which a patient seeks emergency care. Section 11.2(B)(14)-Definitions-Primary care physician. A commenter argued that a definition of "primary care provider" is necessary because practitioners other than physicians may provide primary care to patients, maintain continuity of care and initiate referrals for care. Agency response: The agency agrees with the commenter and will add "provider" to the definition of "primary care physician". The agency recognizes that practitioners other than physicians may contract to provide primary care to patients, maintain continuity of patient care, and initiate referrals for care. For example, a dentist may provide primary care in a dental HMO. Section 11.2(B)(15)-Definitions-Prospective enrollee. One commenter suggested adding a definition of "prospective enrollee" to clarify the meaning of the term used throughout the rules and include individuals not in a group. Agency response: The agency agrees that adding a definition of "prospective enrollee" will clarify the meaning of the term used throughout the rules. Accordingly, the agency has amended sec.11.2 (relating to Definitions) to include a definition of "prospective enrollee". Section 11.2(B)(19)-Definitions-Single health care service plan. A few commenters do not support mental health and chemical dependency single health care service HMOs. The commenters stated that it may stigmatize the users and segregate services for persons with disabilities. One commenter strongly supports mental health and chemical dependency single health care service HMOs. One commenter wants further clarification concerning contracting issues. A few commenters raised significant issues concerning contracting and minimum benefit standards that have not been addressed by the published definition of "single health care service plan" or other rules. Agency response: The department believes that, under current law, an entity which provides both mental health and chemical dependency services may obtain a certificate of authority to operate as a single health care service HMO rather than being required to obtain two separate certificates of authority, one for mental health and the other for chemical dependency. An additional sentence was added to the statutory definition of "single health care service plan" to clarify the agency's interpretation. However, the agency agrees that additional clarification is necessary concerning contracting minimum benefit standards and possibly other issues. For this reason, the agency recommends removing the definition of single health care service plan from the rules. The agency intends to study the additional by commenters and to propose additional rules in the future. Section 11.204-Filing requirements in general. One commenter questioned whether the additional items to be included with the application for certificate of authority means that a currently licensed HMO must amend its certificate of authority, and if so, when? Agency response: The agency agrees that the rules as proposed do not clarify additional filing requirements for HMOs currently licensed. A sentence has been added to paragraph (4) of sec.11.301 of this title (relating to Filing Requirements) to clarify that after the issuance of a certificate of authority, each HMO shall file for approval any information required by any amendment to sec.11.204 of this title (relating to Contents). The agency intends for all currently licensed HMOs to file for approval with the department the written description of health care plan terms and conditions, network configuration information, written disclosure of types of compensation arrangements, and documentation demonstrating that the health care plan contains certain provisions and procedures for coverage of emergency care services. Thereafter, any changes to this information must be filed for information pursuant to paragraph (5) of sec.11.301 (relating to Filing Requirements), except for any material change to the plan's emergency care procedures, which must be filed for approval pursuant to paragraph (4) of sec.11.301 (relating to Filing Requirements). The agency believes it is necessary that these rules apply equally and fairly to all HMOs operating in this state in order to provide a "level playing field" for all HMOs, to maintain quality of health care for all Texans at affordable prices, and to establish procedures for fairness to providers. Section 11.204(17)-Contents-Disclosure requirements. Many commenters support the required submission of written descriptions of health care plan terms and conditions required pursuant to sec.11.1600 of this title (relating to Information to Prospective Group Contract Holders and Enrollees ). Many commenters requested that not only the information required in sec.11.1600 (relating to Information to Prospective Group Contract Holders and Enrollees) be submitted as part of the application process but all advertising and promotional materials be submitted as part of the application process. Several commenters requested that the disclosure form be approved, not just filed with the department, while other commenters stated that providing the disclosure statement to the department will increase cost. Agency response: The agency agrees that advertising material should be submitted as part of the application process; however, this requirement could delay the issuance of the certificate of authority because the advertising material must be reviewed in conjunction with the evidence of coverage and cannot be reviewed until the evidence of coverage is in an approvable form. The agency is concerned with HMO advertising and is considering the appropriateness of rules requiring the filing of all advertising for managed care plans in the future. The agency disagrees that the required filing of the disclosure statement will increase costs significantly because HMOs are already required to file numerous other items as part of the application process. Section 11.204(18)-Contents-Provider network, accessibility or referral information. Many commenters strongly support the requirement of filing with the department maximum provider-to-enrollee ratios for both primary care and specialty care providers. Some commenters stated that the definition of "network configuration" should be changed to clarify the intent of the rules to determine the adequacy of the provider network and to mandate disclosure of information by zip code. A commenter stated the network configuration information in the HMO application should specify provider identification by zip code and delete the identification by specialty and other providers. Another commenter stated that network configuration information should include all providers and geographic areas the providers serve. A commenter stated that the proposed regulation does not clarify that dental services are not required to be offered or covered by an HMO. Agency response: The agency agrees that the intent of the subsection should be clarified to require an explanation of the adequacy of the physician and other provider network configuration. The proposed subsection, which required an "explanation of the contracted or targeted physician, dentist, and as appropriate, other provider network configuration" was unclear and unnecessary. However, the department needs to know network configuration information, including the location of network primary care physicians, specialists and other providers, so that the agency and the Texas Department of Health can monitor the availability and accessibility of health care services offered by an HMO. The department has modified this subsection to more clearly specify the information necessary for the department to determine the adequacy of the physician and other provider network configuration. The department may determine provider to enrollee ratios from the network configuration information filed and current enrollment statistics filed with the department. Section 11.204(19)-Contents-types of compensation arrangements. Some commenters objected to this provision as an intrusion into private contractual arrangements of independent businesses. Others requested that the application require only types of risk-sharing compensation arrangements and not individual provider compensation arrangements. These commenters stated that disclosure of individual compensation arrangements would be onerous and require disclosure of proprietary information. Several commenters suggested limiting the disclosure to require only "general" types of compensation arrangements and changing "any financial incentives" to "types of risk-sharing arrangements, if any." Agency response: This new subsection does not require disclosure of individual provider compensation arrangements. The agency believes the subsection clearly requires "types of compensation arrangements." The commissioner disagrees with the suggestion to change "any financial incentives" to "types of risk-sharing arrangements" because the intent of this subsection is to require broad disclosure of types of financial incentive arrangements, both to examine financial viability and to ensure that no financial incentives prohibited by sec.11.1501 of this title (related to Financial Incentive Programs) are used by an HMO. The phrase, "and the guaranty of the provision of", has been deleted because it may cause confusion, the same reason this phrase was deleted from the definition of capitation in sec.11.2 of this title (relating to Definitions) . Section 11.204(20)-Contents-emergency care services. Many commenters expressed strong support for the paragraph relating to emergency care services. This issue, stated many commenters, is a crucial one to consumers of managed care plans. According to these commenters, the paragraph will prevent unnecessary delays in providing emergency care services, avoid inappropriate denials of coverage and improve the overall health care provided by managed care plans. Several commenters stated that the agency should not enact rules concerning emergency care because the Governor's veto message did not specifically mention this area. Some commenters expressed their concern that the emergency care provisions will impose costly burdens upon managed care plans to pay for non-emergency care rendered in a hospital emergency department. As an illustration, one commenter stated that if a patient presents at the emergency department with an ordinary cold, potentially costly emergency medical screening examination and treatment would be required to be covered. Several commenters recommended that the paragraph clarify that coverage for emergency care services must be provided without regard to whether the emergency care services provider has a contractual or other arrangements with the HMO. Several commenters stated that the term "emergency department" used in the paragraph should be changed to "emergency room" to make it clear that only emergency medical conditions are intended to be covered. Some commenters stated that in general emergency care requirements could increase costs to managed care plans if such services are unnecessarily utilized for non-emergency situations. Several commenters stated that coverage for emergency care services should be determined restrospectively by the HMO in light of whether an emergency medical condition actually existed and, for an emergency medical screening examination, whether a prudent layperson would have reasonably believed medical screening was necessary. Agency response: The agency agrees that the paragraph will help clarify coverage for emergency care services and should provide greater assurances to consumers of managed care products. A significant number of complaints received by the agency concerning managed care plans have been related to coverage for emergency care services. The paragraph is intended to address some of the problems that have arisen in this area and to provide greater direction to the HMOs. The emergency care provisions are consistent with the Governor's proclamation which addressed the need to provide patient protection and quality assurance and to expand patient freedom of choice. The paragraph is not intended to mandate coverage for situations which are clearly non-emergencies. The agency believes that the definition of "emergency care," together with other language in the paragraph, should not require payment for inappropriate use of emergency care services. Moreover, managed care plans already do and should continue to educate their members concerning the appropriate use of emergency care services. Also, the disclosure provision in subsection (b)(4) of sec.11.1600 of this title (related to Information to Prospective Group Contract Holders and Enrollees) require the HMO to give information to prospective enrollees about access to after hours care. HMOs require a copayment for emergency services of $50 or more from many of their enrollees. This higher copayment also helps to avoid presentations at the emergency department for non-emergency services. If a patient, as suggested by one commenter, comes to the emergency department with a cold, a screening examination necessary to determine whether an emergency medical condition exists should not be costly. Once it is determined that the patient has a cold, emergency care services would not be considered necessary and would not be covered. No coverage would be required for treatment after stabilization because no medical emergency condition existed to which this treatment would relate. The paragraph has been modified to clarify that the emergency services specified must be covered without regard to whether the provider furnishing the services has contractual or other arrangements with the HMO. Although language to this effect appeared in one part of the paragraph concerning emergency care services, the agency intended for it to apply to all of the emergency care provisions. The agency disagrees that the term "emergency room" should be substituted for "emergency department" because it believes the term "emergency room" is too restrictive. The agency does not believe the term "emergency department" is unduly restrictive. This paragraph is intended for general application because most patients present to the emergency department of a hospital in a medical emergency situation. The commissioner disagrees that coverage for emergency care services should be determined restrospectively by the HMO. Such practices can create a "chilling effect" on patients which can cause delays in patients seeking needed emergency care. The agency will consider it to be an unacceptable practice subject to enforcement action for an HMO to approve the provision of emergency care services during the patient's visit and then retroactively refuse to pay for the services. When contacted by the emergency department or treating provider the HMO must either approve or deny payment. Section 11.204(20)(A)-Contents-medical screening examinations. Many of the commenters addressed the requirements concerning emergency medical screening examinations. Some commenters recommended deletion of the word "initial" used to describe the medical screening examination to determine whether an emergency medical condition exists. These commenters stated that the word "initial" is not used in either federal or state regulations concerning emergency services. Other commenters requested the insertion of the word "necessary" before the phrase "to determine whether an emergency medical condition exists" in order to clarify that only screening examinations that are necessary to the determination of whether an emergency medical condition exists must be covered by the HMO. Other commenters requested the term "appropriate" be inserted to modify medical screening examinations because that term is used in federal law which mandates the provision of emergency services by hospitals. Several commenters recommended that the subparagraph require coverage of not only an examination and but also diagnostic tests and other procedures to determine whether an emergency condition exists. Several commenters requested that the subparagraph provide for medical screening examinations to be conducted only by or at the direction of a physician. One commenter suggested limiting HMO liability for payment for an emergency medical screening exam to $50, including the patient's copayment, and only to services performed in the emergency department of a licensed hospital. This commenter further suggested that the medical screening examination should be billed separately. Agency response: The agency agrees that the term "initial" should be deleted from the rule because it is not a term used in either federal or state regulation. The agency further agrees that the term "necessary" should be inserted to modify "to determine whether the emergency condition exists." The agency believes that the addition of this term will clarify that the screening examination must be related to a determination of whether an emergency medical condition exists. The agency disagrees with adding the term "appropriate" to the rule or that the rule must specifically require coverage of diagnostic testing or other procedures in order to be consistent with federal law. The rule provides that a health care plan must cover any medical screening examination or "other evaluation required by state or federal law." This would include an examination as described by the Emergency Medical Treatment and Active Labor Act, 42 United States Code, sec.1395dd. The agency believes that a $50 limit on payments for medical screening examinations would be unreasonably low. The agency disagrees that the rule should limit persons who can conduct emergency screening examinations to physicians. Such a provision would be unduly restrictive and, under some circumstances, it may be appropriate for another type of health care provider to conduct screening. Section 11.204(20)(B)-Contents-emergency care services. Many commenters requested that the term "medically necessary" be removed from this subparagraph requiring that an HMO plan contain a provision for emergency care to be provided to covered enrollees. These commenters stated that the definition of emergency care in the rules already establishes medical necessity making the use of the term in this subparagraph redundant. Agency response: The agency agrees that the term "medically" used to modify necessary emergency care is redundant and may create confusion in light of the definition of emergency care. The term "medically necessary" may also be defined differently in different health care plans. This word will be removed. The subparagraph will retain the word "necessary." Section 11.204(20)(C)-Contents-post-stabilization care. Many commenters addressed the requirements concerning care following treatment or stabilization of an emergency medical condition. Many of the commenters support the requirement that the HMO be responsible for answering calls for assistance in a timely fashion stating that this will prevent unnecessary delays of post- stabilization care. A large number of the commenters, however, disagreed with the three hour time limit provided for in this subparagraph. A large number of these commenters requested that a shorter response time be imposed (for example, either thirty minutes or one hour), while a few commenters suggested a longer response time (for example, two days). One commenter stated that the subsection should require the primary care provider to respond rather than the HMO. Several commenters stated that the post-stabilization care should be deemed to be covered if the HMO does not respond within the time limit. These commenters state that addition of this provision would make the subparagraph self-enforcing and that without it, the subparagraph will not be as meaningful. Agency response: The subparagraph concerning coverage for post-stabilization care is intended to apply only to care rendered after the patient is stabilized and to the services related to the emergency condition. Under this subparagraph, the HMO must respond to inquiries from the treating provider within the time appropriate to the circumstances and no later than an outside time limit. The commissioner agrees that the maximum time for an HMO to respond should be shortened to one hour. This request will avoid unnecessary delays in treatment and can also avoid costs associated with holding patients in an emergency department rather than transferring them to post-stabilization care facilities within the hospital. The department disagrees that the rule should require a primary care provider to respond rather than the HMO. The HMO should determine how to best provide responses to inquiries from treating providers. A response from the patient's primary care provider would satisfy the rule but is not mandated by it. Situations may arise, however, in which no primary care provider has been selected by or assigned to the enrollee or the primary care provider is unavailable. In those situations, the HMO must make other arrangements for a response to an inquiry regarding post-stabilization care. The department disagrees that the rule should provide that if the HMO fails to respond by the maximum time, the HMO will deem coverage for post-stabilization care approved. The commissioner intends to handle HMO non-compliance with this subsection through enforcement action. Section 11.301-Filing Requirements. Section 11.301(4)L)-Filing requirements-changes in network configuration A few commenters expressed support for requiring commissioner approval before implementing changes in network configuration. Several commenters stated that changes in network configuration should not require prior approval for a variety of reasons, including reasons that unreasonable burdens would be imposed on an HMO's ability to develop its networks and to contract with providers; filing every change for approval would be cost prohibitive and burdensome; and initial network configuration is approved with the application for a certificate of authority. Some commenters suggested that modifications to network configuration information should be moved to paragraph (5) of sec.11.301 (relating to Filing Requirements) to require filing with the department for information only. Some commenters suggested a requirement that "substantial modifications" be filed for information only and one commenter suggested that network configuration information be filed for information only "at least annually". A commenter requested a separate sentence be added to the proposed paragraph to clarify that HMOs are not required to offer dental services. Agency response: The agency agrees that filing all changes to network configuration information may impose an unreasonable burden on HMOs, especially a requirement that all changes be filed for approval before effectuation of changes. For this reason, the agency has deleted the requirement that modifications to network configuration information be filed for prior approval. A new paragraph (5)(K) has been added to sec.11.301 (relating to Filing Requirements) to require that any material change in network configuration be filed with the department for information only. The type of material changes to network configuration information required by new sec.11.301(5)(K) will include the type of information required to be filed pursuant to new paragraph (17) of sec.11.204 (relating to Contents). Regular examinations will determine if HMOs have made material changes without notifying the department, and material changes that are filed can be examined to ensure that provision of services to enrollees is not impaired. The reference to "dentist" in the network configuration information required to be filed has been deleted, and, therefore, the agency does not believe it is necessary to add a sentence to clarify that HMOs are not required to offer dental services. Section 11.301(4)(M) Filing requirements-emergency care services Several commenters stated that restating the language from amended sec.11. 204(20) of the rules was unnecessarily repetitive. The commenters recommended that instead of restating the emergency care provisions, the agency should require that HMOs file for approval any material change in the plan's emergency care provisions. One commenter suggested that changes to the HMO's emergency care services plan should be filed for information only rather than for approval by the commissioner. Agency response: The agency agrees that it is unnecessary to repeat the provisions of amended paragraph (20) of sec.11.204 of this title (relating to Contents) in this paragraph. The agency intends for changes relating to the plan's emergency care services to be filed for approval and will change the language of the proposed paragraph to require an HMO to submit material changes in the plan's emergency care procedures. The agency disagrees that material changes to the plan's emergency care services provisions should be filed for information only because of the importance of these provisions to the enrollee. The agency believes that commissioner approval is necessary to ensure that material changes in a plan's emergency care provisions comply with the rules. Section 11.301(5)(I) Filing requirements-disclosure requirements A commenter suggested that the language in paragraph (5)(I) of sec.11.301 (relating to Filing Requirements) be changed from "any written description..." to "the written description..." Several commenters requested a requirement that amendments to the disclosure statement be filed for approval. Numerous commenters suggested that all advertising and promotional materials be submitted after issuance of the certificate of authority. Agency response: The agency agrees with the commenter and has changed sec.11. 301(5)(I) to read "the written description". The agency also agrees that promotional and advertising material should be filed for information with the department. Having the advertising material on file with the department will enable department staff to have immediate access to the advertising and stop deceptive advertising quickly. The staff will consider rules in the future to require HMOs to file all promotional and advertising material with the department. The agency does not agree with the recommendation that amendments to the disclosure statement should be filed for approval. The agency intends to monitor the amendments to disclosure statements that are filed for information only. Section 11.1103-Continuity of Treatment Agreements. Many commenters strongly supported the provision requiring continuity of care for patients with special circumstances whose physicians or providers are terminated from the HMO. Several commenters who generally supported the provision also suggested that the rule should require advance notice to the patient; some suggested a specific period for advance notice such as 90 days. Several commenters objected to the 90-day limit for continuing care by the terminating physician or provider, arguing that continuity requires reference to clinical standards rather than an arbitrary deadline; these commenters suggested that the physician or provider continue to be compensated by the HMO until the conclusion of the "episode of care" or an "episode of acute care". Some commenters stated that the HMO should pay the terminated provider at the contract amount unless it is based on capitation or a discounted fee, in which care reimbursement should be based on reasonable and customary charges and that the provider should be required to accept the HMO's payment as payment in full and not seek additional compensation from the patient. One commenter requested that the HMO be required to assist the patient in finding a new participating physician and to assure orderly transfer of records. A few commenters requested that "special circumstances" include women at or beyond the 24th week of pregnancy, or "the second trimester" rather than "in the third trimester". Many commenters requested that the rules specify that an HMO need not continue payment to a physician or provider removed for quality of care reasons. Some commenters requested that the continuity of care provision be available to all patients, not just those with special circumstances. An opponent of the provision commented that the contract terms, not "medical prudence" should govern continuity of care provisions and they should apply to all enrollees. Many commenters requested that the rule clarify that a provider removed for quality of care reasons need not be compensated for continuing to see a patient. Several commenters stated that the language should be clarified, specifying such things as who will make final decision as to when continuity of care is required, who will monitor the process, and defining special circumstances. Some commenters supported including the term "disability"; others suggested it be deleted as vague. A few commenters suggested that the rule require that continuity of care be requested by the treating physician, dentist or provider. One commenter suggested that the enrollee, with the concurrence of the treating physician or provider could identify the special circumstance to the HMO. Some commenters stated that the HMO should not be responsible for payment after a provider voluntarily drops from a network. Agency response: The agency disagrees that contract terms rather than medical prudence should govern continuity of care; contract provisions must not undermine the exercise of medical prudence. The final rule adopts the suggestion of many commenters that the rule require pre-termination notice to the patients so that patients may begin to make arrangements with other providers or request continuity of treatment through their current providers. Reasonable advance notice is required by the PPO rules as published, and similar language has been added to the HMO rule. The commissioner has rejected the comment that an advance notice period, such as 60 or 90 days, be specified in the rule as too inflexible. The department will monitor complaints to determine if more specific requirement of advance notice is necessary. In response to comments, the commissioner has adopted language clarifying that the provisions do not apply to a physician or provider removed for quality of care reasons, clarifying the meaning of "special circumstance." For clarification the commissioner has changed "third trimester" to "24th week" of pregnancy. "Second trimester" has not been added because this would require continued reimbursement long beyond that required for other conditions and the agency believes that the requirement for reimbursement after the 24th week of pregnancy along with the reasonable advance notice that must be given to the enrollee will give the enrollee sufficient time to find a qualified physician or provider. The section has been changed to specify that the physician or provider must identify a patient's special circumstances to the HMO and request that the patient continue under his or her care, and to prohibit the physician or provider from seeking compensation from the patient beyond what the patient would have been responsible for under the plan. The changes have been made in response to comments to clarify the procedures by which the continuity of care requirements will be applied. The commissioner has not adopted the comment that the enrollee, with the concurrence of the treating physician or provider identify the special circumstance to the HMO because the determination of special circumstance involves both the medical judgment and the agreement to continue treatment of the treating physician or provider. Therefore, it is appropriate to require the treating physician or provider to request the continuing care. The commissioner has not adopted comments suggesting that compensation should be at a rate different than the physician or provider received from the HMO because that would impose additional cost on the HMO and it seems reasonable for the physician or provider to continue to accept compensation at the plan rate for the limited time required to complete the patient's care or arrange for the patient's safe transfer to another treating physician or provider. The 90-day limit on continued reimbursement to the terminated provider is the maximum time required by the rules but plans and physicians or providers may extend this time period by contract or by agreement on a case-by-case basis as needed. Based on information received by the department, the agency believes that many managed care plans currently negotiate continuity of treatment based on the needs of the patient and hopes that arrangements beyond those mandated by the rules based on the needs of individual patients will continue. The commissioner has not adopted the suggestion that continuity be required until the conclusion of an episode of care because this could be such a long period of time that such a provision would undermine the HMO's control of its provider network; the agency believes that an "episode of acute care" would be covered by the 90-day period in the proposed language. The agency believes that the provisions should apply for the benefit of the patient, whether the plan or the physician or provider initiates the termination and therefore rejects the suggestion that the provisions should not apply if a physician or provider voluntarily terminates from the network. Section 11.1500-Retaliation. Most commenters support this proposed section. Several commenters suggested that the proposed rule should extend protection against retaliatory actions to physicians and providers who complain or appeal a decision on behalf of their patients, especially in utilization review situations. Other commenters suggested that complaints and appeals should be uniformly recorded and monitored by both the department and the Texas Department of Health and that the proposed rule should be aggressively enforced. Some commenters argued that insertion of the word "solely" after the word "enrollee" clarifies there are other acceptable reasons for termination of coverage and avoids a situation where an enrollee or employer might complain in anticipation of termination of coverage to prevent it. Agency response: The department agrees that the proposed section should be expanded to prohibit retaliatory actions against physicians and providers who, on behalf of their patients, complain or appeal a decision of an HMO. The department strongly believes that a physician or provider should feel free to act as an advocate on behalf of a patient who the physician or provider reasonably believes has been or will be denied medically necessary and appropriate health care services covered by an HMO. For this reason, the department has amended this section to clarify an HMO may not retaliate against a physician, provider, group contract holder or individual enrollee for complaining or appealing a decision of the HMO relating to the group or individual enrollee. The department agrees that the department and Texas Department of Health should coordinate to assure complaints against HMOs are uniformly recorded and monitored. The department is working with the Texas Department of Health to achieve this objective. The department disagrees that the word "solely" should be inserted after the word "enrollee." The department believes insertion of the word "solely" would make the provision unenforceable by the department because an HMO could easily establish more than one reason for taking the retaliatory action other than a complaint or appeal of a decision. The department disagrees that the provision as worded would effectively prevent an HMO from terminating a physician or provider who had complained on behalf of an enrollee in anticipation of the physician's and provider's termination from the plan in order to prevent termination. There can be many legitimate reasons to terminate a physician or provider, but retaliation for a complaint on behalf of a patient is not one of them. Section 11.1501-Prohibited Payments. Numerous commenters supported restrictions on the use of financial incentives that would restrict availability of medically necessary care. Many commenters preferred the language contained in the PPO rules to that contained in the HMO rules. A few commenters requested the addition of the language "or clinically appropriate" in addition to medically necessary. In addition, numerous commenters objected to the language as too vague. Suggestions were made to more clearly define unacceptable financial arrangements, since certain financial incentives may be an appropriate aspect of cost containment. Specifically, many commenters wanted it clearly stated that the rule does not prohibit rewards to providers who reduce cost of unnecessary care and provide appropriate medical care. Agency response: The agency agrees that restrictions are needed on the use of financial incentives that would limit the provision of medically necessary care. The agency does not intend to prohibit reasonable cost containment and managed care features of an HMO plan that do not adversely affect the provision of medically necessary services. The agency agrees that some clarification is needed, however, and the section has been changed accordingly. The language as modified is intended to broaden the scope of the financial incentives that may be considered unacceptable and to include both positive and negative incentives. Section 11.1502-Emergency Care. One commenter stated that proposed sec.11. 1502 (relating to Emergency Care) which requires an HMO to respond to inquiries from a treating physician or provider concerning services following treatment and stabilization of an emergency medical condition in compliance with its plan is redundant and unnecessary. This commenter states that it is obviously prohibited conduct to violate the terms of the contract and plan and recommends that the provision be deleted. Agency response: The agency agrees with the comment recommending deletion of sec.11.1502. It is clear from sec.11.204 (relating to Contents) that an HMO plan must provide for emergency care services for its enrollees. If an HMO fails to comply with these provisions of its plan, the agency may take enforcement action. Section 11.1502 neither adds to nor takes anything away from the agency's ability to take enforcement action and it is therefore unnecessary. The section will be deleted. Section 11.1600-Information to prospective enrollees. Section 11.1600(a). Many commenters supported the disclosure of information concerning HMO plan terms and conditions in a uniform and consistent manner to enable consumers to make informed decisions when choosing among plans. Some commenters did not support the inclusion of this subsection. Several commenters made suggested language changes to this subsection while others supported the language as proposed. Suggested changes include (a) "shall make available" be changed to "shall provide"; (b) "upon request" be deleted so that all consumers will receive the same information; and (c) "to allow groups and individuals eligible for enrollment" be changed to "to allow prospective enrollees." A comment was made that the rules should require two disclosures; one which would be made available to everyone and one to only those who request information. Several suggestions were made that all marketing materials should include the disclosure information or at least a listing of the information available and how to receive it. A commenter suggested that the subsection require the disclosure information to be required to be mailed within two working days of the request for it. A commenter suggested that the disclosures be required to be available in a variety of language formats including the language which is the primary language of 10% or more the of the residents of the service area, in Braille and on audio tape. A comment was made that for group coverage, the HMO should be required to provide the prospective group contract holder with sufficient copies of the disclosure information for distribution to all employees or members of the group. Another commenter suggested adding a provision that an HMO marketing to an employer group may satisfy this subsection by supplying the disclosures directly to the employer. Agency response: The agency agrees that requiring the disclosure of information about HMO plans to be made available in a uniform and consistent manner will assist consumers in making informed choices when choosing among plans and will enhance their freedom of choice. The agency agrees that the language "shall make available" should be changed to "shall provide" because this clarifies that the HMO is to provide the information, not just make it available. The subsection has been modified accordingly. The agency does not agree that the language "upon request" should be deleted. To require disclosure to consumers who are not applying for or even interested in the coverage would increase costs. Additionally, the agency does not agree that the language "to allow groups and individuals eligible for enrollment" should be deleted. The agency believes that requiring two disclosure forms and inclusion of all marketing materials would be too costly and would duplicate some of the information already made available by HMOs; therefore, no change in the subsection has been made requiring this. The suggestion that marketing materials include a statement that other information is available and how to receive it has not been incorporated in these rules but will be considered in future amendments to HMO advertising regulations. The suggestion that the disclosure form be mailed within two working days of the request has not been incorporated; however, if the department receives complaints that HMOs are not promptly providing the required disclosures, consideration will be given to amending the subsection to establish a timeline for compliance. To keep costs at a minimum, the agency does not agree that the rules should mandate the disclosures to be provided in different languages, Braille or on audio tape; however, HMOs are encouraged to make the disclosure information accessible and otherwise to provide assistance to those who request it. The agency does not agree that the subsection should expressly mandate HMOs to provide prospective group contract holders with sufficient disclosure statements to distribute to all employees or members due to the costs this would impose; however, the agency encourages HMOs to cooperate with prospective group contract holders when they make such a request. Additionally, the agency does not agree with the suggestion that an HMO marketing to a group may satisfy the subsection by supplying the disclosures directly to the group. HMOs may provide the disclosures to the group; however, this action will not release the HMO from supplying the disclosure to a prospective enrollee who requests the information. Section 11.1600(b). Many commenters stated that the requirement that the disclosures be in a form prescribed by the department was costly and that businesses should not be required to follow government prescribed forms or even a set order. A commenter stated that the rule should require the basic information to be provided and allow the HMO to determine the method and the format for distribution. Other commenters recommended that the rules require disclosure statements to be uniform and consistent to promote effective comparison. Additionally, comments were made that the disclosures required by this subsection and similar provisions of the PPO rules should be as uniform as possible. A commenter stated that the information required to be disclosed would be of no interest to the public. Another commenter stated that the requirements would duplicate what is required under ERISA. Several commenters stated that the information required to be disclosed is already available but not in the order required by the subsection and that most of the items contained in the disclosure form are already contained in brochures. Many commenters suggested changes to the list of items required to be disclosed by the subsection. A few commenters recommended that the list be reordered to provide consumers with the more important information first. Several commenters stated that the HMO's phone number required to be included in the disclosure information for prospective enrollees to obtain additional information should be a toll-free number. A commenter recommended that the disclosure also specify what other types of information are available as well as giving a toll-free number. A commenter suggested the disclosure include an explanation of the difference between an HMO and a PPO and a statement in 12 point type that the disclosures are required to be in a standard format for comparison. A commenter requested a provision requiring the identification of the plan as an HMO. A commenter requested that the item requiring disclosure of emergency care benefits include disclosure of out-of-area emergency care. Another commenter requested that the disclosure include information on obtaining after-hours care. Numerous commenters stated that the requirement for disclosure of the drug formulary as proposed was too broad and would require insurers to produce long lists of drugs that would be constantly changing and would not be meaningful to consumers. Several of these commenters recommended that the words "existence of" be added to modify "drug formulary" to clarify that the entire drug formulary need not be reproduced in the disclosure forms. Some commenters requested that complaint and grievance procedures be required to be disclosed including information concerning the prohibition against retaliation and the names and numbers of individuals responsible for processing complaints. Several commenters requested that the names of providers not accepting new patients should be disclosed along with the names of providers contracting with more than one plan and the total number of patients treated by each provider. Several commenters requested disclosure of provider-to-enrollee ratios for both primary care providers and by specialty, including maximum provider-to-enrollee ratios. It was also recommended that this information be required to be disclosed in the application for a certificate of authority and that the agency should monitor these ratios and compare them with data on consumer complaints regarding access to providers. These commenters also requested mandated disclosure of information related to hold-harmless requirements. Additional disclosure requirements requested by several commenters included information about network configuration; compensation arrangements; percentage of premiums allocated for medical or dental care, administrative costs and profits; the information in a paragraph entitled YOUR RIGHTS UNDER TEXAS LAW from the vetoed Patient Protection bill and mental health benefits and limitations. Agency response: The agency agrees that the required disclosures need not be in a form prescribed by the department; however, to facilitate comparison and consumer understanding, the agency believes the order in which the disclosures are to be made should be uniform. Additionally, the agency agrees that the disclosures required in this subsection and in similar provisions of the PPO rules should be as uniform as possible and the required disclosures have been reorganized accordingly. The agency disagrees the information will be of no interest to the public. The agency recognizes that some information required to be disclosed may duplicate disclosure requirements contained in federal law, but not all of the information required by this section is disclosed under federal law. All prospective group contract holders and prospective enrollees should be able to receive the same information, not just those covered by plans subject to federal law. Although some HMOs may currently make the disclosure information available to prospective enrollees, not all of them may do so. The subsection will ensure that this information is available to all prospective group contract holders and prospective enrollees to facilitate consumer choices among plans. In response to comments the agency has revised the list of items required to be disclosed to prospective group contract holders and prospective enrollees and has reordered the items. Although the agency believes disclosure of all of these items is important to consumers, the agency believes it has put the items of more general interest first. The agency agrees that a toll-free number should be provided. Although certain HMOs who transact only a small amount of business in the state are exempted by statute (Insurance Code, Article 21.71) and rule (28 Texas Administrative Code sec.1.601) from the requirement of maintaining a toll- free number, the department believes that most of these HMOs currently provide a toll-free number. The department encourages all HMOs otherwise exempt from this requirement to maintain a toll-free number for prospective as well as existing enrollees to obtain information. The agency disagrees that the disclosure should contain an explanation of the difference between HMOs and PPOs and a statement that the disclosures are required to be in standard format. Information concerning PPOs in an HMO disclosure might be confusing to consumers. Instead, the agency has added a requirement that the HMO disclose that the entity providing coverage is a Health Maintenance Organization. The requested 12 point type statement is unnecessary because the format requirement in this subsection will allow consumers to make comparisons. The agency agrees that this subsection needs to be amended to clarify that the disclosure of emergency care services and benefits is to include out-of-area emergency care. The language of the rule has been amended accordingly. The agency agrees that information about after-hours care should be disclosed. Disclosure of this information can help direct enrollees away from emergency departments for non-emergency conditions. The agency does not intend to require disclosure of an entire drug formulary because it would be costly to do so and the formulary would need to be updated constantly. The subsection has been reworded to require disclosure of the existence of any drug formulary limitations. The agency has modified the subsection to require disclosure of complaint and grievance procedures as requested by the commenters. The agency agrees that information concerning which physicians or providers are not accepting new patients is important to consumers and should be disclosed. The subsection has been modified accordingly. The agency disagrees, however, that providers contracting with more than one plan and the total number of patients treated should be disclosed as this information would constantly change, would be too costly to implement and would be only of limited use to the consumer. The agency disagrees that disclosure of provider-to-enrollee ratios should be required because this information alone could be misleading to consumers. The department will monitor complaints that sufficient physicians and providers are not available to enrollees. The requested disclosure of hold harmless requirements has raised a new substantive issue. This comment was related to one requesting a new provision in the subchapter concerning hold harmless clauses in physician and provider contracts. The department will study this issue for possible future rulemaking. The agency disagrees with the recommended disclosure of percentage of premiums allocated for medical or dental care, administrative costs, and profits because this information constantly changes and can be obtained by calling the HMO. The suggested change to mandate disclosure of mental health benefits and limitations was not added as this information is already required to be disclosed by provisions addressing disclosure of the HMO plan's benefits, limitations and exclusions. Section 11.1601 Admissions and Terminations of Physicians and Providers. Some commenters supported the standards for admission and termination of providers. A commenter objected to this section as offering special protections and procedures to one class of workers which interfere unreasonably with a market based contracting system and impose burdensome and restrictive regulatory controls. One commenter stated, in regard to this section, that it is bad public policy to require a company to disclose proprietary information regarding specific economic data used in management practices. Agency response: This section is designed to provide basic guidelines for the admission and termination of physicians and providers to help assure a stable and adequate provider network of providers available to the enrollee. This subsection does not require the release of proprietary information; it simply requires a response to an application from a physician or provider and that the HMO provide reasons for denying an application or terminating a physician or provider. Section 11.1601(a)-Admissions. A commenter requested the addition of "any willing provider" provisions; another specifically commented that there should be no such provision. Other commenters suggested the deletion of the reference to Article 21.52B as confusing. Several commenters recommended that HMOs be required to respond to requests for applications within a designated time frame; suggested time frames ranged from within 10 days of request to within 60 days of request. Other commenters suggested that applications should be available at any time. A few commenters recommended prescribing a time frame within which the HMO must provide written reasons for denying an application; suggested time frames ranged from within 10 days of denial of an application to within 90 days of receipt of an application. Some commenters objected to allowing denial of an application based on sufficiency of providers and requested that HMOs be required to prove to the rejected provider that the network does in fact have sufficient providers. A commenter requested that the rule prohibit excluding a physician or provider solely because of the anticipated characteristics of the patients of that applicant and suggested that unsuccessful applicants be afforded an appeals process as they are under the rules governing PPOs. Agency response: Mandating the admission to a managed care network of any willing provider would fundamentally change the character of the managed care system established by Chapter 20A; such a change requires legislative action. Through Article 21.52B, the legislature has established a procedure different from that set out in the section and the agency believes the specific reference to the statute in this subsection is helpful. The department has not added specific response times for providing application materials or denying applications believing that the existing requirements are adequate to produce timely responses; the department will monitor complaints to determine if HMOs are failing to respond timely to applicants. HMOs must be allowed to limit the participation of providers when they have sufficient providers of a particular type to have an economically viable managed care network. The department believes that requiring the HMO to prove to the rejected provider that the network has sufficient providers is unnecessary because complaints from rejected providers that an HMO is using sufficiency of providers as a pretext to deny admission could be reviewed by the state. The department has not articulated any prohibited bases for excluding a physician or provider from an HMO network but will monitor complaints to determine if such prohibition may be advisable in future legislation or rulemaking. The department has rejected the suggestion that unsuccessful applicants be provided an appeals process as too costly. Section 11.1601(b)-Terminations. Several commenters supported requiring that the HMO provide written reasons for terminating a physician or provider; others objected to the requirement as costly. A few commenters recommended prescribing the time frame for providing written reasons for termination. One commenter recommended that physicians terminating their contracts be required to notify the HMO and affected patients with written reasons for termination. Many commenters supported the idea of advisory review panels but stated that the advisory review panels should be available to all providers, not just to physicians and dentists. Other commenters objected to the provision of advisory review panels or to any expansion of the applicability of the panel as an unnecessary cost driver. Many commenters had specific suggestions for the composition of the advisory review panel, such as including a member chosen by the affected physician or dentist, off-network members, retired physicians or educators, or all network specialists. Several commenters requested language requiring the HMO to disclose the advisory review panel's recommendation to the affected physician and dentist, along with an explanation if the HMO rejected the panel's recommendation. Other comments recommended that an explanation should only be required to be made available upon request. Some commenters expressed concern that the requirement of a before termination advisory review would prohibit an HMO from terminating a physician where continued practice constitutes imminent threat of harm to patients or against whom license action is pending and suggested that the rule allow summary suspension for patient safety reasons. One commenter objected to the requirement of the advisory review panel process in the event of termination due to economic considerations. A commenter requested the addition of a requirement that procedural standards in the federal Health Care Quality Improvement Act of 1986 be followed in any action of a type that must be reported to the National Practitioner Data Bank. One commenter stated that the rule should set out the proper reasons for termination. Agency response: The department believes that requiring an HMO to provide written reasons for terminating a physician or provider will not add significant administrative cost because the HMO is simply required to inform the terminated physician or provider of the reasons for its decision. The department has not added specific response times for providing written reasons for termination believing that the existing requirements are adequate to produce timely responses; the department will monitor complaints to determine if HMOs are failing to respond timely to terminated physicians or providers. The proposed rules are designed to provide a review process for a physician or dentist before termination without imposing additional cost on the HMO by requiring the panel only if requested by the affected physician or dentist and by allowing the HMO to use a standing committee as its advisory review panel. The commissioner agrees with commenters that the recommendations of the panel should be available to the affected physician or dentist upon request and the subsection has been amended accordingly. Provisions are specifically included which would permit immediate action in the event of imminent threat of harm. The commissioner rejects the suggestion that review panels not be used when a termination is for economic reasons because a meaningful review mechanism must apply equally to all terminations. If the review panel is required only when a physician or dentist is terminated for non-economic (quality of care) reasons, review would rarely be afforded because most HMOs would simply state that the termination is for economic reasons thus the HMO could avoid detailing a quality of care reason for termination and a review. The procedures in the federal act cited by the commenter are standards the use of which insulates participants in a professional review process from liability based on their professional review activities. These standards are far more detailed than the advisory review panel required by this subsection and would not be appropriate for non-quality of care terminations. There may be many appropriate reasons for termination of a physician or provider's participation in an HMO network and the department does not believe it is necessary or advisable to attempt to list them in an agency rule. Section 11.1601(c)-Economic profiling. Many commenters supported the disclosure of economic profiling information to physicians and providers. Supporters of disclosure also opposed the "market strategies" exception as unclear or as a loophole which would defeat the purpose of the subsection and requested additional language requiring that economic profiling be adjusted for case mix and other factors which may affect higher or lower costs. Other commenters opposed the section as vague, burdensome and costly, requiring the disclosure of private business information and benefiting providers rather than patients. Several commenters suggested that the entire section be deleted. Some commenters who objected to the disclosure of economic profiling stated that the types of risk adjustment mechanisms used by HMOs are crude, and uncertainty about their effectiveness of practicality exists and that the meaning of economic profiling is unclear. One commenter suggested that if economic profiling information is shared with physicians, it should also be made available to purchasers of the HMO plan. Some commenters requested that if the section is retained, it should be narrowed to be provided only upon written request or to require only that an HMO provide written criteria to a terminated provider if economic profiling is part of the reason for termination. Agency response: Commenters have explained that the term "economic profiling" is a term of art used to describe the evaluation of a particular physician or provider based on comparisons of money expended by that physician or provider in relation to other physicians or providers in the network. The department accepts that definition for the term as used in this subsection. The department accepts the objection that mandated disclosure of detailed economic measurements of individual performance by all HMO physicians or providers to any requesting physician or provider could be burdensome to the HMO. However, if such evaluations are used, an affected physician or provider should have access to the criteria by which that physician or provider is measured and to the physician or provider's own economic profile; the language of the rule has been amended to limit required disclosure accordingly. Narrowing the information available to that pertinent only to a requesting physician or provider obviates the need for the "market strategies" exception, which has been deleted. Section 11.1602-Primary care selection. Some commenters expressed strong support for protecting the enrollees right to choose providers and to change providers at any time. Other commenters criticized the section as increasing costs and suggested that the provision be stricken or that enrollees should be allowed to select or change providers only during the open enrollment period. Others suggested that the right to change be limited to no more than once a year other than the enrollment period or four times a year and once a month. One commenter suggested that the right to change providers up to four times per year might conflict with the continuity of treatment provisions extending treatment by a terminated provider for up to 90 days. Several commenters asked that the rule specify that the right to select is from network providers only. One commenter requested that the phrase "upon reasonable notice to the HMO" be added to the section and another asked that the rule specify that the effective date of a change may occur within a reasonable time frame, for example, the first day of the month following the month in which the change request was received. Some commenters suggested that this section be combined with the section on capitation. Agency response: The rule specifies that an enrollee has a right to select and change a primary care physician from within the HMO network, but, as suggested by several commenters, has been amended to allow the HMO to limit the changes to no more than four times per year to alleviate potential administrative burden and cost. The commissioner does not believe that this provision conflicts with the 90-day continuity of treatment requirement because in one case the enrollee seeks to change and in the other the enrollee seeks to continue treatment by the same provider, so it is difficult to imagine the two provisions colliding. The commissioner believes that the suggested reasonable notice and change date provisions are implied in the language of the rule. While staff initially recommended combining sec.11.1602 and sec.11.1603 as suggested, upon further study, staff recommended and the commissioner agreed that the rule provisions are clearer if the two sections remain separated. Section 11.1603-Capitation. Some commenters expressed general support for the section, stating that it would remedy current abuses by some HMOs. Some commenters who expressed general support for the section requested that the provisions extend to all providers, not just physicians and dentists. Many commenters requested that HMOs be required to notify enrollees of any assignment made by the HMO. Some commenters stated that the section be deleted, arguing that it is an inappropriate and harmful intrusion into private contractual relationships or that the commissioner has no statutory authority to require assignment of enrollees or dictate terms of payment of providers. Many commenters objected to requiring assignment of a primary care provider because such a requirement interferes with an enrollee's freedom to choose, arguing that an enrollee may wish to delay selection until care is needed, and that it would drive up costs. Several commenters objected to the requirement that assignments be on a rotational basis and suggested that there should be only a requirement that an assigned primary care provider be within a reasonable travel distance of the enrollee's residence or work. A few commenters objected to the requirement that capitation payments be made retroactively with one commenter arguing that retroactive capitation payments deprive the HMO of revenue used to pay specialists, stipends to dentists in underserved areas and emergency dental reimbursements for out of area service. That commenter estimated that retroactive capitation payments would increase premium costs by 7.5%. Another HMO argued that the rule as proposed would defeat its arrangement of paying reduced capitation fees to a group practice which provides primary care services to all enrollees who have not selected a primary care physician. Several commenters stated that requiring that capitation payments begin within 30 days is too short; some suggested a 90-day time period. Agency response: The amended rule is necessary to ensure that primary care providers are immediately available and accessible to HMO enrollees and to ensure that premium payments are used as necessary to compensate primary care physicians and providers who assume the risk of providing health care services to the plan's enrollees. When enrollees do not have a selected or assigned primary care provider, they may find themselves in need of immediate care with nowhere to turn but expensive emergency care. Likewise, when an HMO is allowed to retain premium payments until the enrollee actually visits a primary care provider, providers may not receive adequate compensation to provide the services they have contracted to provide. The commissioner therefore rejects the comments which propose deleting this section. In response to commenters, the adopted rule reflects some changes to the rule as proposed. The amended rule lengthens the maximum time period for beginning capitation payments from 30 to 90 days, eliminates the mandatory assignment provision, requires notice of assignment to the enrollee and allows an HMO to seek approval of an alternative plan for capitation payments. The commissioner has retained the requirement that capitation payments be made retroactively because he believes this to be the most sound way to ensure that providers are receiving compensation in proportion to their risk. The department staff believe that only a small number of HMOs currently retain premium payments of unassigned enrollees, thus the overall increase in premium, if any, should be negligible. Also, the provision for seeking approval of an alternative capitation payment plan gives HMOs the opportunity to satisfy the department that the HMO has a structure other than the one set out in the section for providing immediate access to a primary care physician or provider and adequate compensation to the physicians and providers. The department's statutory authority to regulate the payment of capitation is the general authority granted in Article 20A.22 along with the department's specific responsibility to ensure that an HMO has a financially sound plan to provide health care services as set forth in Article 20A.05(a)(2)(A) and (b)(B) , (C). The department has used nearest zip code rather than "reasonable travel distance" to define the location of any assigned primary care physician or provider because the department believes it to be more advantageous to the enrollee to have the closest possible provider assigned. The department has not extended the capitation provisions to other physicians and providers as requested by one commenter because the availability and accessibility of a primary care physician or provider is of critical importance to the enrollee and the department does not believe that more comprehensive language is necessary at this time. Because of the number of proposed amendments to these rules and the complexity of the issues raised, it is difficult to categorize the comments as either "for" or "against" adoption of the rules. Most commenters expressed some level of support for the amendments and offered some criticisms or suggested changes; those commenters are listed as "for with changes". A few commenters offered no positive comments and objected to certain provisions in the rules; those commenters are listed as "against". No commenter suggested that the proposed amendments be withdrawn. For with changes: Advocacy, Inc., Alliance for Managed Care-Aetna, American Medical Security, Baylor University Medical Center, The Beacon, Blue Cross and Blue Shield of Texas, Brinker International, CIGNA, Center for Public Policy Priorities, City of Houston, Clear Lake Rehabilitation Association, Consumers Union, Coronado Hospital, DeLeon & Boggins, Disability Policy Consortium, Doctors Hospital, DuPont Human Resources, EmCare, Group Health Association of America, Group Plan Clinic, doing business as Benesys, Harris County Medical Society, Harris Methodist Health System, Haynes & Boone, Health Insurance Association of America, Holy Family Services, individual advanced practice nurses, individual certified nurses, individual certified nurse midwives, individual consumers, individual emergency physicians, Jenkens & Gilchrist, John Hancock Mutual Life Insurance Company, Kaiser Foundation Health Plan of Texas, Kaiser Permanante, Third Coast Emergency, M. D. Anderson Cancer Center, Medco Behavioral Care Corporation, Mental Health Association in Texas, Metroplex Emergency Physician Association, National Association of Dental Plans, New York Life SANUS, Office of Public Insurance Counsel, Parkland School of Nurse- Midwifery, Pharmaceutical Research, Prudential and Metra Health, Rio Grande HMO, Inc., Scott & White Hospital, Honorable John Smithee, Society of Oral and Maxillofacial Surgeons, Texas Academy of Family Physicians, Texas Association of Homes and Services for the Aging, Texas Association of Home Care, Texas Association of Nurse Anesthetists, Inc., Texas Association of Retail Optometry, Texas Business Group on Health, Texas Chapter of the National Association of Social Workers, Texas Citizens for a Sound Economy, Texas College of Emergency Physicians, Texas Counseling Association, Texas Dental Association, Texas Dermatologic Society, Texas HMO Association, Texas Hospital Association, Texas Life Insurance Association, Texas Medical Association, Texas Nurses Association, Texas Optometric Association, Texas Planning Counsel for Development Disabilities, Texas Psychological Association, Texas Society of Pathologists, Texas Speech-Language-Hearing Association, Third Coast Emergency Physicians, United Cerebral Palsy of Texas, Inc., United Dental Care of Texas. Against: PCA Health Plans, Texas Association of Business & Chambers of Commerce, United Dental Care, United Healthcare Dental, Inc., Wadley Regional Clinic. Subchapter A. General Provisions 28 TAC sec.11.1, sec.11.2 The amendments are adopted under the Insurance Code, Articles 20A.22, 20A. 04(a)(13) and (b); 20A.05(b) and (d); 20A.14(a), (b) and (c); 21.21, sec.3, sec.4(1) and (2) and 13; 21.21-6, sec.1 and sec.3 (as added by House Bill 1367 enacted by the 74th Legislature); 26.08; 26.71 (as amended by House Bill 369 enacted by the 74th Legislature); 26.75 (as amended by House Bill 369 enacted by the 74th Legislature); 1.03A and the Government Code, sec.sec.2001.004 et seq (Administrative Procedure Act). The Insurance Code, Article 20A.22 provides that the State Board of Insurance may promulgate such reasonable rules and regulations as are necessary and proper to carry out the provisions of the Texas HMO Act. Article 1.01A provides that except as otherwise provided by law, all references in the Insurance Code to the State Board of Insurance mean the department or the commissioner as consistent with the respective duties of the commissioner or the department under the Insurance Code and other laws relating to the business of insurance in this state. Article 20A.04(a)(13) provides that in addition to items to be accompanied with each applicant for an HMO certificate of authority as set forth in Article 20A.04(a)(1)-(12), the commissioner may require other information to make determinations required by the HMO Act. Article 20A.04(b) provides the State Board of Insurance may promulgate such reasonable rules and regulations as it deems necessary to the proper administration of the HMO Act to require a health maintenance organization, subsequent to receiving its certificate of authority, to submit the modifications or amendments to the operations or documents submitted upon application for a certificate of authority to the commissioner, either for his approval or for information only, prior to the effectuation of the modification or amendment or to require the health maintenance organization to indicate the modifications to both the Texas Board of Health and the Commissioner of Insurance at the time of the next site visit or examination. Article 20A.05(b) sets forth the determinations the commissioner and the Texas Board of Health must make prior to granting a certificate of authority to an HMO. Article 20A.05(d) provides a certificate of authority shall continue in force as long as the person to whom it is issued meets the requirements of the HMO Act or until suspended or revoked by the commissioner or terminated at the request of the certificate holder. Article 20A.14(a) provides that no HMO, or representatives thereof, may cause or knowingly permit the use of advertising which is untrue or misleading, solicitation which is untrue or misleading, or any form of evidence of coverage which is deceptive. Article 20A.14(b) provides that Article 21.21 applies to HMOs. Article 21.21, sec.3 and sec.4(1) and (2) prohibit untrue, deceptive or misleading statements with respect to the business of insurance. Article 21.21, sec.13 authorizes the commissioner to promulgate rules as necessary to accomplish the purposes of Article 21.21, concerning unfair practices. Article 20A.14(c) provides that an enrollee may not be cancelled or not renewed except for the failure to pay the charges for such coverage, or for such other reason as may be promulgated by rule of the commissioner. Article 21.21-6, sec.1 and sec.3 define and prohibit unfair discrimination in the business of insurance, including HMOs. Article 26.08 provides that small employer health benefit plan carriers may use cost containment and managed care features in a small employer health benefit plan. Article 26.71 requires the fair marketing of small employer health benefit plans and authorizes the department to require submission of data concerning those plans. Article 1.03A provides that the Commissioner of Insurance may adopt rules and regulations to execute the duties and functions of the Texas Department of Insurance only as authorized by statute. The Government Code, sec.sec.2001.004 et seq authorizes and requires each state agency to adopt rules of practice setting forth the nature and requirement of available procedures and prescribes the procedures for adoption of rules by a state administrative agency. The following articles are affected, 20A.22; 20A.04; 20A.05; 20A.14; 21.21; 21- 21-6, 26.08; 26.71, 26.75 and 1.03A sec.11.1. Purpose and Scope. This chapter implements the Texas Health Maintenance Organization Act, Senate Bill 180, enacted by Acts, 1975, 64th Legislature, Chapter 214, Pages 514-530, first effective December 2, 1975, as amended, codified as the Texas Insurance Code, Chapter 20A. (1)-(3) (No change.) (4) Cause of action. Subchapter C, sec.11.204(17)-(20) of this title (relating to Contents); Subchapter D, sec.11.301(4)(L) and (M) and (5)(I) and (J) of this title (relating to Filing Requirements); Subchapter L, sec.11.1103 of this title (relating to Continuity of Treatment Agreements); Subchapter P, sec.11.1500 of this title (relating to Retaliation), and Subchapter Q, sec.11. 1600 of this title (relating to Information to Prospective Group Contract Holders and Enrollees), sec.11.1601 of this title (relating to Admission and Termination of Physicians and Providers), sec.11.1602 of this title (relating to Primary Care Selection) and sec.11.1603 of this title (relating to Capitation) do not create a private cause of action for damages or create a standard of care, obligation or duty that provides a basis for a private cause of action. Nor do these sections or subchapters abrogate a statutory or common law cause of action, administrative remedy or defense otherwise available. sec.11.2. Definitions. (a) (No change.) (b) The following words and terms, when used in this chapter, shall have the following meanings, unless the context clearly indicates otherwise. (1) Act-The Texas Health Maintenance Organization Act, Senate Bill 180, enacted by Acts 1975, 64th Legislature, Chapter 214, pages 514-530, first effective December 1, 1975, as amended, codified as the Texas Insurance Code, Chapter 20A. (2) Admitted assets-All assets as defined by generally accepted accounting principles, as permitted and valued in accordance with sec.11.803 of this title (relating to Investments, Loans, and Other Assets). (3) Affiliate-a person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, the person specified. (4) Agent-A health maintenance organization agent as defined in the Insurance Code, Articles 20A.15 and 20A.15A, unless the context of the rule clearly indicates applicability to any agents licensed under one specific article. (5) Capitation-A method of compensation to a physician or provider based on a predetermined payment per enrollee for a specified period of time for certain enrollees in exchange for arranging for or providing a defined set of covered health care services to such enrollees for a specified period of time, regardless of the amount of services actually provided. (6) Code-The Texas Insurance Code, 1951, as amended. (7) Copayment-An additional charge to an enrollee for a service which is not fully prepaid. (8) Dentist-A person licensed to practice dentistry by the Texas State Board of Dental Examiners. (9) Emergency Care-As defined in the Insurance Code, Article 20A.02(t) . Bona fide emergency services provided after the sudden onset of a medical condition manifesting itself by acute symptoms of sufficient severity, including severe pain, such that the absence of immediate medical attention could reasonably be expected to result in: (A) placing the patient's health in serious jeopardy; (B) serious impairment to bodily functions; or (C) serious dysfunction of any bodily organ or part. (10) Excess surplus-The surplus that is in excess of the minimum surplus required by the Insurance Code, Article 20A.13, excluding from surplus those assets a health maintenance organization finds necessary for its operations as set forth in sec.11.803(5) of this title (relating to Investments, Loans and Other Assets). (11) HMO-A health maintenance organization which has been issued a certificate of authority under the Act. (12) Out of area benefits-The benefits that the HMO covers when its members are outside the geographical limits of the HMO service area. (13) Premium-The prospectively determined rate, based on the capitation, that is paid by or on behalf of a subscriber for specified health services. (14) Primary care physician or primary care provider -A physician or provider who is responsible for providing initial and primary care to patients, maintaining the continuity of patient care, and initiating referral for care. (15) Prospective Enrollee-In the case of a member of a group, an HMO, an individual eligible for enrollment in an HMO purchased through that individual's group. In the case of an individual who is not a member of a group or whose group has not purchased or does not intend to purchase an HMO plan, "prospective enrollee" means an individual who has expressed an interest in purchasing individual HMO coverage and who is eligible for coverage by the HMO. (16) Qualified HMO-An entity which has been federally approved under Title XIII of the Public Health Service Act, Public Law 93-222, as amended. (17) Rules-All sections under this chapter. (18) Schedule of charges-The specific rates or premiums to be charged for a single enrollee, a two-member family, three-member family, etc. (19) Service area-The geographical area within which direct service benefits are available and accessible to HMO enrollees. (20) Subscriber-If nongroup coverage, the person who is the policyholder and is responsible for payment of premiums to the HMO; or if group coverage, the person who is the certificate holder and whose employment or other status, except for family dependency, is the basis for eligibility for membership in the HMO. (21) Surplus-The admitted assets minus uncovered liabilities. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on November 15, 1995. TRD-9514860 Alicia M. Fechtel General Counsel and Chief Clerk Texas Department of Insurance Effective date: December 6, 1995 Proposal publication date: July 25, 1995 For further information, please call: (512) 463-6327 Subchapter C. Application for Certificate of Authority 28 TAC sec.11.204 The amendment is adopted under the Insurance Code, Articles 20A.22, 20A. 04(a)(13) and (b); 20A.05(b) and (d); 20A.14(a), (b) and (c); 21.21, sec.3, sec.4(1) and (2) and 13; 21.21-6, sec.1 and sec.3 (as added by House Bill 1367 enacted by the 74th Legislature); 26.08; 26.71 (as amended by House Bill 369 enacted by the 74th Legislature); 26.75 (as amended by House Bill 369 enacted by the 74th Legislature); 1.03A and the Government Code sec.sec.2001.004 et seq (Administrative Procedure Act). The Insurance Code, Article 20A.22 provides that the State Board of Insurance may promulgate such reasonable rules and regulations as are necessary and proper to carry out the provisions of the Texas HMO Act. Article 1.01A provides that except as otherwise provided by law, all references in the Insurance Code to the State Board of Insurance mean the department or the commissioner as consistent with the respective duties of the commissioner or the department under the Insurance Code and other laws relating to the business of insurance in this state. Article 20A.04(a)(13) provides that in addition to items to be accompanied with each applicant for an HMO certificate of authority as set forth in Article 20A.04(a)(1)-(12), the commissioner may require other information to make determinations required by the HMO Act. Article 20A.04(b) provides the State Board of Insurance may promulgate such reasonable rules and regulations as it deems necessary to the proper administration of the HMO Act to require a health maintenance organization, subsequent to receiving its certificate of authority, to submit the modifications or amendments to the operations or documents submitted upon application for a certificate of authority to the commissioner, either for his approval or for information only, prior to the effectuation of the modification or amendment or to require the health maintenance organization to indicate the modifications to both the Texas Board of Health and the Commissioner of Insurance at the time of the next site visit or examination. Article 20A.05(b) sets forth the determinations the commissioner and the Texas Board of Health must make prior to granting a certificate of authority to an HMO. Article 20A.05(d) provides a certificate of authority shall continue in force as long as the person to whom it is issued meets the requirements of the HMO Act or until suspended or revoked by the commissioner or terminated at the request of the certificate holder. Article 20A.14(a) provides that no HMO, or representatives thereof, may cause or knowingly permit the use of advertising which is untrue or misleading, solicitation which is untrue or misleading, or any form of evidence of coverage which is deceptive. Article 20A.14(b) provides that Article 21.21 applies to HMOs. Article 21.21, sec.3 and sec.4(1) and (2) prohibit untrue, deceptive or misleading statements with respect to the business of insurance. Article 21.21, sec.13 authorizes the commissioner to promulgate rules as necessary to accomplish the purposes of Article 21.21, concerning unfair practices. Article 20A.14(c) provides that an enrollee may not be cancelled or not renewed except for the failure to pay the charges for such coverage, or for such other reason as may be promulgated by rule of the commissioner. Article 21.21-6, sec.1 and sec.3 define and prohibit unfair discrimination in the business of insurance, including HMOs. Article 26.08 provides that small employer health benefit plan carriers may use cost containment and managed care features in a small employer health benefit plan. Article 26.71 requires the fair marketing of small employer health benefit plans and authorizes the department to require submission of data concerning those plans. Article 1.03A provides that the Commissioner of Insurance may adopt rules and regulations to execute the duties and functions of the Texas Department of Insurance only as authorized by statute. The Government Code, sec.sec.2001.004 et seq authorizes and requires each state agency to adopt rules of practice setting forth the nature and requirement of available procedures and prescribes the procedures for adoption of rules by a state administrative agency. The following articles are affected, 20A.22; 20A.04; 20A.05; 20A.14; 21.21; 21- 21-6, 26.08; 26.71, 26.75 and 1.03A. sec.11.204. Contents. Contents of the application must include the following items in the order as listed: (1)-(16) (No change.) (17) the written description of health care plan terms and conditions made available for any prospective group contract holder and prospective enrollee of the HMO pursuant to the requirements of sec.11.1600 of Subchapter Q of this title (relating to Information to Prospective Group Contract Holders and Enrollees); (18) network configuration information, including an explanation of the adequacy of the physician and other provider network configuration. The information provided must include the names of physicians, specialty physicians and other providers by zip code or zip code map and indicate whether each physician or other provider is accepting new patients from the HMO; (19) written disclosure of types of compensation arrangements, such as compensation based on a fee-for-service arrangement, a risk-sharing arrangement, or a capitated risk arrangement, made to physicians and providers in exchange for the provision of, or the arrangement to provide health care services to enrollees, including any financial incentives for physicians and providers; and (20) documentation demonstrating that the HMO will pay for emergency care services performed by non-network physicians or providers at the negotiated or usual and customary rate and that the health care plan contains the following provisions and procedures for coverage of emergency care services without regard to whether the physician or provider furnishing the services has a contractual or other arrangement with the entity to provide items or services to covered individuals: (A) any medical screening examination or other evaluation required by state or federal law which is necessary to determine whether an emergency medical condition exists will be provided to covered enrollees in the emergency department of a hospital; (B) necessary emergency care services will be provided to covered enrollees, including the treatment and stabilization of an emergency medical condition; (C) services originating in a hospital emergency department following treatment or stabilization of an emergency medical condition as approved by the HMO. This provision must require the HMO to approve or deny coverage of post stabilization care as requested by a treating physician or provider within the time appropriate to the circumstances relating to the delivery of the services and the condition of the patient, but in no case to exceed one hour. The HMO must respond to inquiries from the treating physician or provider in compliance with this provision in the HMO's plan. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on November 15, 1995. TRD-9514861 Alicia M. Fechtel General Counsel and Chief Clerk Texas Department of Insurance Effective date: December 6, 1995 Proposal publication date: July 25, 1995 For further information, please call: (512) 463-6327 Subchapter D. Regulatory Requirements for an HMO Subsequent to Issuance of a Certificate of Authority 28 TAC sec.11.301 The amendment is adopted under the Insurance Code, Articles 20A.22, 20A. 04(a)(13) and (b); 20A.05(b) and (d); 20A.14(a), (b) and (c); 21.21, sec.3, sec.4(1) and (2) and 13; 21.21-6, sec.1 and sec.3 (as added by House Bill 1367 enacted by the 74th Legislature); 26.08; 26.71 (as amended by House Bill 369 enacted by the 74th Legislature); 26.75 (as amended by House Bill 369 enacted by the 74th Legislature); 1.03A and the Government Code, sec.sec.2001.004 et seq (Administrative Procedure Act). The Insurance Code, Article 20A.22 provides that the State Board of Insurance may promulgate such reasonable rules and regulations as are necessary and proper to carry out the provisions of the Texas HMO Act. Article 1.01A provides that except as otherwise provided by law, all references in the Insurance Code to the State Board of Insurance mean the department or the commissioner as consistent with the respective duties of the commissioner or the department under the Insurance Code and other laws relating to the business of insurance in this state. Article 20A.04(a)(13) provides that in addition to items to be accompanied with each applicant for an HMO certificate of authority as set forth in Article 20A.04(a)(1)-(12), the commissioner may require other information to make determinations required by the HMO Act. Article 20A.04(b) provides the State Board of Insurance may promulgate such reasonable rules and regulations as it deems necessary to the proper administration of the HMO Act to require a health maintenance organization, subsequent to receiving its certificate of authority, to submit the modifications or amendments to the operations or documents submitted upon application for a certificate of authority to the commissioner, either for his approval or for information only, prior to the effectuation of the modification or amendment or to require the health maintenance organization to indicate the modifications to both the Texas Board of Health and the Commissioner of Insurance at the time of the next site visit or examination. Article 20A.05(b) sets forth the determinations the commissioner and the Texas Board of Health must make prior to granting a certificate of authority to an HMO. Article 20A.05(d) provides a certificate of authority shall continue in force as long as the person to whom it is issued meets the requirements of the HMO Act or until suspended or revoked by the commissioner or terminated at the request of the certificate holder. Article 20A.14(a) provides that no HMO, or representatives thereof, may cause or knowingly permit the use of advertising which is untrue or misleading, solicitation which is untrue or misleading, or any form of evidence of coverage which is deceptive. Article 20A.14(b) provides that Article 21.21 applies to HMOs. Article 21.21, sec.3 and sec.4(1) and (2) prohibit untrue, deceptive or misleading statements with respect to the business of insurance. Article 21.21, sec.13 authorizes the commissioner to promulgate rules as necessary to accomplish the purposes of Article 21.21, concerning unfair practices. Article 20A.14(c) provides that an enrollee may not be cancelled or not renewed except for the failure to pay the charges for such coverage, or for such other reason as may be promulgated by rule of the commissioner. Article 21.21-6, sec.1 and sec.3 define and prohibit unfair discrimination in the business of insurance, including HMOs. Article 26.08 provides that small employer health benefit plan carriers may use cost containment and managed care features in a small employer health benefit plan. Article 26.71 requires the fair marketing of small employer health benefit plans and authorizes the department to require submission of data concerning those plans. Article 1.03A provides that the Commissioner of Insurance may adopt rules and regulations to execute the duties and functions of the Texas Department of Insurance only as authorized by statute. The Government Code, sec.sec.2001.004 et seq authorizes and requires each state agency to adopt rules of practice setting forth the nature and requirement of available procedures and prescribes the procedures for adoption of rules by a state administrative agency. The following articles are affected, 20A.22; 20A.04; 20A.05; 20A.14; 21.21; 21- 21-6, 26.08; 26.71, 26.75 and 1.03A. sec.11.301. Filing Requirements. Subsequent to the issuance of a certificate of authority, each health maintenance organization (HMO) is required to file certain information with the commissioner, either for approval prior to effectuation or for information only, as outlined in paragraphs (4) and (5) of this section and in sec.11.302 of this title (relating to Service Expansion Requests). These requirements include filing of any changes necessitated by federal or state law or regulation. (1)-(3) (No change.) (4) Filings requiring approval. Subsequent to the issuance of a certificate of authority, each HMO shall file for approval with the commissioner all information required by any amendment to sec.11.204 of this title (relating to Contents) if such information has not previously been filed and approved by the commissioner. In addition, an HMO shall file with the commissioner a written request to implement or modify the following operations or documents and receive the commissioner's approval prior to effectuating such modifications: (A)-(K) (No change.) (L) any material change in the plan's emergency care procedures. (5) Filings for information. Material filed under this paragraph is not to be considered approved, but may be subject to review for compliance with Texas law and consistency with other HMO documents. Each item filed under this paragraph must be accompanied by a completed HMO Form #7 - Certification of Compliance, referred to in sec.11.1001(8) of this title (relating to Forms Adopted by Reference) in addition to those attachments required under paragraph (3) of this section, within 30 days of the effective date, an HMO must file with the commissioner, for information only, deletions, and modifications to the following previously approved or filed operations and documents: (A)-(H) (No change.) (I) the written description of health care plan terms and conditions made available for any prospective group contract holder and prospective enrollee of the HMO pursuant to the requirements of sec.11.1600 of Subchapter Q of this title (relating to Information to Prospective Group Contract Holders and Enrollees); and (J) modifications to any types of compensation arrangements, such as compensation based on a fee-for-service arrangement, a risk-sharing arrangement, or a capitated risk arrangement, made to physicians and providers in exchange for the provision of, or the arrangement to provide health care services to enrollees, including any financial incentives for physicians and providers; and (K) Any material change in network configuration. (6) (No change.) This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on November 15, 1995. TRD-9514862 Alicia M. Fechtel General Counsel and Chief Clerk Texas Department of Insurance Effective date: December 6, 1995 Proposal publication date: July 25, 1995 For further information, please call: (512) 463-6327 Subchapter L. Standard Language for Mandatory and other Provisions 28 TAC sec.11.1103 The new section is adopted under the Insurance Code, Articles 20A.22, 20A. 04(a)(13) and (b); 20A.05(b) and (d); 20A.14(a), (b) and (c); 21.21, sec.3, sec.4(1) and (2) and 13; 21.21-6, sec.1 and sec.3 (as added by House Bill 1367 enacted by the 74th Legislature); 26.08; 26.71 (as amended by House Bill 369 enacted by the 74th Legislature); 26.75 (as amended by House Bill 369 enacted by the 74th Legislature); 1.03A and the Government Code, sec.sec.2001.004 et seq (Administrative Procedure Act). The Insurance Code, Article 20A.22 provides that the State Board of Insurance may promulgate such reasonable rules and regulations as are necessary and proper to carry out the provisions of the Texas HMO Act. Article 1.01A provides that except as otherwise provided by law, all references in the Insurance Code to the State Board of Insurance mean the department or the commissioner as consistent with the respective duties of the commissioner or the department under the Insurance Code and other laws relating to the business of insurance in this state. Article 20A.04(a)(13) provides that in addition to items to be accompanied with each applicant for an HMO certificate of authority as set forth in Article 20A.04(a)(1)-(12), the commissioner may require other information to make determinations required by the HMO Act. Article 20A.04(b) provides the State Board of Insurance may promulgate such reasonable rules and regulations as it deems necessary to the proper administration of the HMO Act to require a health maintenance organization, subsequent to receiving its certificate of authority, to submit the modifications or amendments to the operations or documents submitted upon application for a certificate of authority to the commissioner, either for his approval or for information only, prior to the effectuation of the modification or amendment or to require the health maintenance organization to indicate the modifications to both the Texas Board of Health and the Commissioner of Insurance at the time of the next site visit or examination. Article 20A.05(b) sets forth the determinations the commissioner and the Texas Board of Health must make prior to granting a certificate of authority to an HMO. Article 20A.05(d) provides a certificate of authority shall continue in force as long as the person to whom it is issued meets the requirements of the HMO Act or until suspended or revoked by the commissioner or terminated at the request of the certificate holder. Article 20A.14(a) provides that no HMO, or representatives thereof, may cause or knowingly permit the use of advertising which is untrue or misleading, solicitation which is untrue or misleading, or any form of evidence of coverage which is deceptive. Article 20A.14(b) provides that Article 21.21 applies to HMOs. Article 21.21, sec.3 and sec.4(1) and (2) prohibit untrue, deceptive or misleading statements with respect to the business of insurance. Article 21.21, sec.13 authorizes the commissioner to promulgate rules as necessary to accomplish the purposes of Article 21.21, concerning unfair practices. Article 20A.14(c) provides that an enrollee may not be cancelled or not renewed except for the failure to pay the charges for such coverage, or for such other reason as may be promulgated by rule of the commissioner. Article 21.21-6, sec.1 and sec.3 define and prohibit unfair discrimination in the business of insurance, including HMOs. Article 26.08 provides that small employer health benefit plan carriers may use cost containment and managed care features in a small employer health benefit plan. Article 26.71 requires the fair marketing of small employer health benefit plans and authorizes the department to require submission of data concerning those plans. Article 1.03A provides that the Commissioner of Insurance may adopt rules and regulations to execute the duties and functions of the Texas Department of Insurance only as authorized by statute. The Government Code, sec.sec.2001.004 et seq authorizes and requires each state agency to adopt rules of practice setting forth the nature and requirement of available procedures and prescribes the procedures for adoption of rules by a state administrative agency. The following articles are affected, 20A.22; 20A.04; 20A.05; 20A.14; 21.21; 21- 21-6, 26.08; 26.71, 26.75 and 1.03A. sec.11.1103. Continuity of Treatment Agreements. Each contract between an HMO and a physician or provider of health care services must provide that reasonable advance notice be given to an enrollee of the impending termination from the plan of a physician or provider who is currently treating the enrollee. Each contract must also provide that the termination of the physician or provider contract, except for reason of medical competence or professional behavior, does not release the obligation of the HMO to reimburse the physician or provider who is treating an enrollee of special circumstance, such as a person who has a disability, acute condition, life-threatening illness, or is past the twenty fourth week of pregnancy, at no less than the contract rate for that enrollee's care in exchange for continuity of ongoing treatment of an enrollee then receiving medically necessary treatment in accordance with the dictates of medical prudence. Special circumstance means a condition such that the treating physician or provider reasonably believes that discontinuing care by the treating physician or provider could cause harm to the patient. Special circumstance shall be identified by the treating physician or provider who must request that the enrollee be permitted to continue treatment under the physician's or provider's care and agree not to seek payment from the patient of any amounts for which the enrollee would not be responsible if the physician or provider were still on the HMO network. Contracts between an HMO and physicians and providers shall provide procedures for resolving disputes regarding the necessity for continued treatment by the physician or provider. This section does not extend the obligation of the HMO to reimburse the terminated physician or provider for ongoing treatment of an enrollee beyond 90 days from the effective date of the termination. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on November 15, 1995. TRD-9514863 Alicia M. Fechtel General Counsel and Chief Clerk Texas Department of Insurance Effective date: December 6, 1995 Proposal publication date: July 25, 1995 For further information, please call: (512) 463-6327 Subchapter P. Prohibited Practices 28 TAC sec.11.1500, sec.11.1501 The new sections are adopted under the Insurance Code, Articles 20A.22, 20A.04(a)(13) and (b); 20A.05(b) and (d); 20A.14(a), (b) and (c); 21.21, sec.3, sec.4(1) and (2) and 13; 21.21-6, sec.1 and sec.3 (as added by House Bill 1367 enacted by the 74th Legislature); 26.08; 26.71 (as amended by House Bill 369 enacted by the 74th Legislature); 26.75 (as amended by House Bill 369 enacted by the 74th Legislature); 1.03A and the Government Code, sec.sec.2001.004 et seq (Administrative Procedure Act). The Insurance Code, Article 20A.22 provides that the State Board of Insurance may promulgate such reasonable rules and regulations as are necessary and proper to carry out the provisions of the Texas HMO Act. Article 1.01A provides that except as otherwise provided by law, all references in the Insurance Code to the State Board of Insurance mean the department or the commissioner as consistent with the respective duties of the commissioner or the department under the Insurance Code and other laws relating to the business of insurance in this state. Article 20A.04(a)(13) provides that in addition to items to be accompanied with each applicant for an HMO certificate of authority as set forth in Article 20A.04(a)(1)-(12), the commissioner may require other information to make determinations required by the HMO Act. Article 20A.04(b) provides the State Board of Insurance may promulgate such reasonable rules and regulations as it deems necessary to the proper administration of the HMO Act to require a health maintenance organization, subsequent to receiving its certificate of authority, to submit the modifications or amendments to the operations or documents submitted upon application for a certificate of authority to the commissioner, either for his approval or for information only, prior to the effectuation of the modification or amendment or to require the health maintenance organization to indicate the modifications to both the Texas Board of Health and the Commissioner of Insurance at the time of the next site visit or examination. Article 20A.05(b) sets forth the determinations the commissioner and the Texas Board of Health must make prior to granting a certificate of authority to an HMO. Article 20A.05(d) provides a certificate of authority shall continue in force as long as the person to whom it is issued meets the requirements of the HMO Act or until suspended or revoked by the commissioner or terminated at the request of the certificate holder. Article 20A.14(a) provides that no HMO, or representatives thereof, may cause or knowingly permit the use of advertising which is untrue or misleading, solicitation which is untrue or misleading, or any form of evidence of coverage which is deceptive. Article 20A.14(b) provides that Article 21.21 applies to HMOs. Article 21.21, sec.3 and sec.4(1) and (2) prohibit untrue, deceptive or misleading statements with respect to the business of insurance. Article 21.21, sec.13 authorizes the commissioner to promulgate rules as necessary to accomplish the purposes of Article 21.21, concerning unfair practices. Article 20A.14(c) provides that an enrollee may not be cancelled or not renewed except for the failure to pay the charges for such coverage, or for such other reason as may be promulgated by rule of the commissioner. Article 21.21-6, sec.1 and sec.3 define and prohibit unfair discrimination in the business of insurance, including HMOs. Article 26.08 provides that small employer health benefit plan carriers may use cost containment and managed care features in a small employer health benefit plan. Article 26.71 requires the fair marketing of small employer health benefit plans and authorizes the department to require submission of data concerning those plans. Article 1.03A provides that the Commissioner of Insurance may adopt rules and regulations to execute the duties and functions of the Texas Department of Insurance only as authorized by statute. The Government Code, sec.sec.2001.004 et seq authorizes and requires each state agency to adopt rules of practice setting forth the nature and requirement of available procedures and prescribes the procedures for adoption of rules by a state administrative agency. The following articles are affected, 20A.22; 20A.04; 20A.05; 20A.14; 21.21; 21- 21-6, 26.08; 26.71, 26.75 and 1.03A. sec.11.1500. Retaliation. (a) No HMO shall engage in any retaliatory action, including refusal to renew or cancellation of coverage, against a group contract holder or enrollee because the group, enrollee or person acting on behalf of the group or enrollee, has filed a complaint against the HMO or appealed a decision of the HMO. (b) No HMO shall engage in any retaliatory action, including terminating or refusal to renew a contract, against a physician or provider, because the physician or provider has, on behalf of an enrollee, reasonably filed a complaint against the HMO or has appealed a decision of the HMO. sec.11.1501. Prohibited Payments. An HMO may not use any financial incentive or make payment to a physician or provider which acts directly or indirectly as an inducement to limit medically necessary services. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on November 15, 1995. TRD-9514864 Alicia M. Fechtel General Counsel and Chief Clerk Texas Department of Insurance Effective date: December 6, 1995 Proposal publication date: July 25, 1995 For further information, please call: (512) 463-6327 Subchapter Q. Other Requirements 28 TAC sec.sec.11.1600-11.1603 The amendments to the Administrative Code, Chapter 11, are proposed under the Insurance Code, Articles 20A.22; 20A.05(b) and (d); 20A.14(a), (b), (c), (d); 21.21, sec.3, sec.4(1) and (2) and 13; 21.21-6, sec.1 and sec.3 (as added by House Bill 1367 enacted by the 74th Legislature); 26.08; 26.71 (as amended by House Bill 369 enacted by the 74th Legislature); 26.75 (as amended by House Bill 369 enacted by the 74th Legislature); 1.03A and the Government Code sec.2001.004 et seq (Administrative Procedure Act). The Insurance Code, Article 20A.22 provides that the State Board of Insurance may promulgate such reasonable rules and regulations as are necessary and proper to carry out the provisions of the Texas HMO Act. Article 1.01A provides that except as otherwise provided by law, all references in the Insurance Code to the State Board of Insurance mean the department or the commissioner as consistent with the respective duties of the commissioner or the department under the Insurance Code and other laws relating to the business of insurance in this state. Article 20A.05(b) sets forth the determinations the commissioner and the Texas Board of Health must make prior to granting a certificate of authority to an HMO. Article 20A.05(d) provides a certificate of authority shall continue in force as long as the person to whom it is issued meets the requirements of the HMO Act or until suspended or revoked by the commissioner or terminated at the request of the certificate holder. Article 20A.14(a) provides that no HMO, or representatives thereof, may cause or knowingly permit the use of advertising which is untrue or misleading, solicitation which is untrue or misleading, or any form of evidence of coverage which is deceptive. Article 20A.14(b) provides that Article 21.21 applies to HMOs. Article 21.21, sec.3 and sec.4(1) and (2) prohibit untrue, deceptive or misleading statements with respect to the business of insurance. Article 21.21, sec.13 authorizes the commissioner to promulgate rules as necessary to accomplish the purposes of Article 21.21, concerning unfair practices. Article 20A.14(c) provides that an enrollee may not be canceled or not renewed except for the failure to pay the charges for such coverage, or for such other reason as may be promulgated by rule of the commissioner. Article 21.21-6, sec.1 and sec.3 define and prohibit unfair discrimination in the business of insurance, including HMOs. Article 26.08 provides that small employer health benefit plan carriers may use cost containment and managed care features in a small employer health benefit plan. Article 26.71 requires the fair marketing of small employer health benefit plans and authorizes the department to require submission of data concerning those plans. Article 1.03A provides that the Commissioner of Insurance may adopt rules and regulations to execute the duties and functions of the Texas Department of Insurance only as authorized by statute. The Government Code, sec.2001.004 et seq. authorizes and requires each state agency to adopt rules of practice setting forth the nature and requirement of available procedures and prescribes the procedures for adoption of rules by a state administrative agency. The following articles are affected by this proposal: Insurance Code, Articles 20A.22, 20A.04; 20A.05, 20A.14; 21.21; 21-21-6,26.08; 26.71, 6.75, and 1.03A. sec.11.1600. Information to Prospective Group Contract Holders and Enrollees. (a) An HMO shall provide upon request an accurate written description of health care plan terms and conditions, as referenced in sec.11.204(17) of Subchapter C of this title (relating to Contents) and sec.11.301(5)(I) of Subchapter D of this title (relating to Filing Requirements), to allow any prospective group contract holder and prospective enrollee eligible for enrollment in a health care plan to make comparisons and informed decisions before selecting among health care plans. (b) The written plan description must be in a readable and understandable format, by category, and must include a clear, complete and accurate description of these items in the following order: (1) a statement that the entity providing the coverage is a Health Maintenance Organization (HMO); (2) a toll-free number, unless exempted by statute or rule, and address for the prospective group contract holder or prospective enrollee to obtain additional information including provider information; (3) all covered services and benefits, including a description of the options (if any) for prescription drug coverage, both generic and brand name; (4) emergency care services and benefits, including coverage for out of area emergency care services and information on access to after-hours care; (5) out of area services and benefits (if any); (6) an explanation of enrollee financial responsibility for payment of premiums, copayments, deductibles, and any other out of pocket expenses for noncovered or out-of plan services; (7) any limitations and exclusions including the existence of any drug formulary limitations; (8) any prior authorization, including limitations or restrictions on, and a summary of procedures to obtain approval for, referrals to providers other than primary care physicians or dentists, and other review requirements, including preauthorization review, concurrent review, post service review, and post payment review and the consequences resulting from the failure to obtain any required authorizations; (9) provision for continuity of treatment in the event of the termination of a primary care physician or dentist; (10) a summary of the complaint resolution procedures of the HMO, and a statement that the HMO is prohibited from retaliating against a group contract holder or enrollee because the group contract holder or enrollee has filed a complaint against the HMO or appealed a decision of the HMO and is prohibited from retaliating against a physician or provider because the physician or provider has, on behalf of an enrollee, reasonably filed a complaint against the HMO or appealed a decision of the HMO; (11) a current list of physicians and providers updated on at least a quarterly basis, including names and locations of physicians and providers, a statement of limitations of accessibility and referrals to specialist, and a disclosure of which physicians and providers will not accept new enrollees or participate in closed provider networks serving only certain enrollees; and (12) the service area. (c) No HMO, or representatives thereof, may cause or knowingly permit the use or distribution of prospective enrollee information which is untrue or misleading. sec.11.1601. Admissions and Terminations of Physicians and Providers. (a) Application by physicians and providers to participate in an HMO plan. An HMO upon request shall make available and disclose to physicians and providers written application procedures and qualification requirements for contracting with the HMO. Each physician and provider who initially applies to contract with an HMO for the provision of health care services on behalf of the HMO and who is denied a contract with the HMO must be provided written notice of the reasons the initial application was denied. Unless otherwise limited by Insurance Code, Article 21.52B, this subsection does not prohibit an HMO plan from rejecting an application from a physician or provider based on the determination that the plan has sufficient qualified physicians or providers. (b) Termination of physicians and providers. Before terminating a contract with a physician or provider, the HMO shall provide a written explanation to the physician or provider of the reasons for termination. Upon request and before the effective date of the termination, a physician or dentist shall be entitled to a review of the HMO's proposed termination by physicians and dentists, including at least one representative in the physician's or dentist's same or similar specialty, if available, appointed to serve on the standing quality assurance committee or utilization review committee of the HMO established pursuant to 25 TAC sec.119.11 (Texas Department of Health Regulations relating to Quality Assurance), except in cases in which there is imminent harm to patient health or an action by a state medical, dental, or other physician or dentist licensing board or other government agency that effectively impairs the physician's or dentist's ability to practice medicine or dentistry or in cases of fraud or malfeasance. The decision of the advisory panel must be considered but is not binding on the HMO. The HMO shall provide to the affected physician or dentist upon request, a copy of the recommendation of the advisory review panel and the HMO's determination. (c) Economic profiling information. An HMO that conducts or uses economic profiling of physicians or providers within the HMO shall make available to a network physician or provider upon request, the economic profile of that physician or provider, including the standards by which the physician of provider is measured. The use of an economic profile must recognize the characteristics of a physician's or provider's practice that may account for variations from expected costs. sec.11.1602. Primary Care Selection. Each plan application form shall prominently include a space in which the enrollee at the time of application or enrollment shall make a selection of a primary care physician or primary care provider. An enrollee shall at all times have the right to select or change a primary care physician or primary care provider within the HMO network of available primary care physicians and primary care providers. However, an HMO may limit an enrollee's request to change physicians or providers to no more than 4 changes in any 12 month period. sec.11.1603. Capitation. The following applies to any HMO that to any extent uses capitation as a method of compensation: (1) The HMO shall begin payment of the contracted for capitation amounts to the enrollee's primary care physician or primary care provider, calculated from the date of enrollment, no later than 90 days following the date an enrollee has selected or has been assigned a primary care physician or primary care provider. If selection or assignment does not occur at the time of enrollment, capitation which would otherwise have been paid to a selected primary care physician or primary care provider had a selection been made shall be reserved as a capitation payable until such time as an enrollee makes a selection or the plan assigns a primary care physician or primary care provider. (2) If an enrollee does not select a primary care physician or primary care provider at the time of application or enrollment, an HMO may assign an enrollee to a primary care physician or primary care provider. If an HMO elects to assign an enrollee to a primary care physician or primary care provider, the assignment shall be made to a primary care physician or primary care provider located within the zip code nearest the enrollee's residence or place of employment and, to the extent practicable given the zip code limitation, shall be done in a manner that results in a fair and equal distribution of enrollees among the plan's primary care physicians or primary care providers. An enrollee shall have the right at any time to reject the physician or provider assigned and to select another physician or provider from the list of primary care physicians or primary care providers on the HMO's network. An election by an enrollee to reject an assigned physician or provider shall not be counted as a change in providers for purposes of the limitation described in sec.11.1602 of this title (relating to Primary Care Selection). (3) As an alternative to the above provisions, an HMO may seek approval from the department of a different capitation payment scheme that assures: (A) immediate availability and accessibility of a primary care physician or primary care provider; and (B) payment to the primary care physician or primary care provider of a capitation amount certified by a qualified actuary to be actuarially sufficient to compensate the primary care physician or primary care provider for the risk being assumed. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on November 15, 1995. TRD-9514865 Alicia M. Fechtel General Counsel and Chief Clerk Texas Department of Insurance Effective date: January 1, 1996 Proposal publication date: July 25, 1995 For further information, please call: (512) 463-6327 Part II. Texas Workers' Compensation Commission Chapter 134. Guidelines for Medical Services, Charges, and Payments Subchapter K. Treatment Guidelines 28 TAC sec.134.1002 The Texas Workers' Compensation Commission (the commission) adopts new sec.134.1002, with changes to the proposed text as published in the September 22, 1995, issue of the Texas Register (20 TexReg 7574). Changes made to the proposed rule in response to public comment received in writing and at a public hearing held on October 11, 1995, are described in the summary of comments and responses section of this preamble. Changes made include changes to the following portions of the rule: (b)(2)(C), (c)(3), (d) (1)(E), (d)(1)(G), (d)(2)(F), (e)(2)(B), (e)(2)(F), (e)(3)(A), (f)(2)(A), (f) (2)(B), (f)(2)(C), (f)(6)(B), (f)(6)(V), and (f)(6)(Y). In addition, the commission has included in subsection (b)(1) that the guideline will expire one year from its effective date. By including this "Sunset" provision, the commission will be required to review and reevaluate the guideline in one year to determine if it is to continue in effect. The Upper Extremities Treatment Guideline clarifies those services that are reasonable and necessary for operative and nonoperative care of the upper extremities for the injured workers of Texas. The guideline is not to be used as a fixed treatment protocol, but rather identifies a normal course of treatment, and reflects typical courses of intervention. It is anticipated that there will be injured workers who will require less or more treatment than average. It is acknowledged that in atypical cases, treatment falling outside this guideline will occasionally be necessary. However, those cases that exceed the guideline level of treatment will be subject to more careful scrutiny and review and will require documentation of the special circumstances that justify the treatment. This guideline should not be seen as prescribing the type and frequency or length of intervention. Treatment must be based on patient need and professional judgement. The rule is designed to function as a guideline and should not be used as the sole reason for denial of treatments and services. It is anticipated that this guideline will be subject to review and possible revision on a regular basis. The guideline has been designed to achieve the following goals: (1) to assist all parties with regard to the appropriate treatment and management of upper extremity injuries; (2) to establish elements against which aspects of care can be compared; (3) to establish a guideline to identify clinically acceptable courses of treatment for specific disorders; (4) to establish documentation standards which support the appropriateness of the level of service; and (5) to provide a mechanism of prospective, concurrent, and retrospective review for efficient and effective health care utilization. The clinical and diagnostic treatment guidelines contained in this new rule have been developed in conjunction with health care providers and other parties in the workers' compensation system. The development process involved a national search of state agencies administering workers' compensation programs, which revealed that only a few states had developed treatment guidelines. Research revealed a matrix approach to be the most understandable format for the guideline. A survey of the successful guidelines developed in the private sector identified that involvement from provider work groups achieved the best outcome regarding clinical policy development. The agency recognizes that the evaluation of the proposed guideline should be broad and include comments from employees, employers, health care providers and insurance carriers. The guideline promotes quality health care, injury specific treatment and appropriateness of care, by identifying clinically acceptable courses of care for specific upper extremities injuries, and by facilitating communication between all parties in order to achieve rapid recovery from the effects of an injury. This communication will also promote a timely return to modified or full duty work that takes into account the job demands and the functional capabilities of the injured worker. Comments generally supporting, but suggesting changes to the proposed sec.134.1002 were received from the following groups: Texas Workers' Compensation Insurance Fund, Texas Psychological Association, Texas Pain Medicine Clinic, Tyson Foods, Inc., PRIDE. Summaries of the comments and commission responses are as follows: COMMENT: General support was expressed for the goals as outlined in (b)(2). However, concern was expressed regarding (b)(2)(C), which states "to establish a guideline to exemplify clinically acceptable courses of treatment for specific disorders." Commenter felt that this guideline should incorporate a greater flexibility, and encourage employers to create and implement treatment programs specific for their companies. RESPONSE: The commission agrees with the need to revise the goal. This goal has been re-written to state: "to establish a guideline to identify clinically acceptable courses of treatment for specific disorders." Not all disorders that can occur as a result of a compensable injury are listed in this guideline; only those diagnoses most frequently seen, and possible complications of those diagnoses (e.g., avascular necrosis and reflex sympathetic dystrophy) are addressed in this guideline. It is also noted in this document that this is a guideline and that there may be injured workers whose treatment falls outside the parameters, requiring additional documentation substantiating the need for such treatment. The following comments were received regarding the role of the primary gatekeeper. COMMENT: Concern was expressed by the commenter that the proposed guideline appears to charge the health care provider with the responsibility of determining compensability issues. Suggestion was made to re-direct this section, through revisions, to treat the injured worker, not the claim. Suggestions for revisions of these sections include: a. (c)(5)(B): "Health care providers must explain to the injured worker in clear terms the extent and severity of the injury and the treatment needed. Health care providers must define the symptomatology and specify treatment that is directly and/or indirectly related to the injury." b. (d)(1)(D): "This guideline identifies the need to provide documentation which clearly explains the reason for the treatment and the relatedness to the workers' compensation injury alternative treatment." c. (e)(4): "If it is determined that this treatment is not related to the compensable injury, the injured worker should be informed by the health care provider that this treatment will not be covered by the insurance carrier." RESPONSE: The commission disagrees with the need to revise these sections. The requirements outlined in the guideline regarding the need for the treating doctor to separate those symptoms and treatments causally related to the compensable injury from those unrelated to the compensable injury are not new. These requirements have been present since the enactment of the law in 1991. This section is simply reiterating the need to separately treat and charge for both compensable and noncompensable signs and symptoms appropriately. COMMENT: Suggestion was made by commenter to create a checklist for practitioners to utilize when determining the compensability of an injury and ruling out other non-related conditions which might be the cause of the injury. This suggestion was repeated for (e)(4). RESPONSE: The commission disagrees with the need to create a checklist for providers. Such a checklist would be very difficult to formulate and very complicated. Determination of non-related conditions should be done on a case by case basis and is not a purpose or goal of this treatment guideline. COMMENT: Although support was expressed for the primary gatekeeper's responsibility for "separation and referral of nonrelated health care services", contained in (c)(2)(A)(iv), commenter suggested that further clarification was necessary regarding this function. An in-depth analysis of this area was recommended. RESPONSE: The commission disagrees with the request for additional clarification or an indepth analysis. The requirements outlined in the guideline regarding the need for the treating doctor to separate those symptoms and treatments causally related to the compensable injury from those unrelated to the compensable injury are not new. These requirements have been present since the enactment of the law in 1991. This section is simply reiterating the need to separately treat and charge for both compensable and noncompensable signs and symptoms appropriately. The creation of an additional form, i.e., a checklist, would place an additional burden on the health care provider, and would not necessarily address all issues or concerns. The determination of whether a sign/symptom or treatment is causally related to the compensable injury is dependent upon the injured worker's history and should be tailored for that specific individual. The following comments were received regarding application instructions for involved parties. COMMENT: Concern was expressed by the commenter that the review and approval of treatment plans was not explicitly delineated in the proposed guideline. Suggestion was made to include Application Tables, similar to those contained in the Spine Treatment Guideline, in the proposed guideline, outlining the responsibilities and documentation requirements for all parties, including the requirement for treatment plans. Suggestions for revision include: a. New Subsection (d)(1)(G): "The health care provider is responsible for formulating a plan of treatment and revising the plan of treatment based on response to treatment. The plan of treatment should be provided to the insurance carrier as early as possible." b. New Subsection (d)(2)(F): "The insurance carrier is responsible for performing a focus review of injury. This focus review will primarily consist of case management. The focus review must clarify and attempt to reach agreement that the proposed treatment is appropriate as early as possible. Concurrent case management and bill review activities should address and focus on adherence to treatment plans, clinical progress, return to work issues, medical necessity and the following: (1) Injured worker compliance with the treatment (2) Services provided consistent with treatment plan (3) Response to treatment (4) Improvement in injured workers' progress (5) Recommendations for changes in treatment in situations where there is no compliance, plateau, and/or there is minimal or no progress (6) Achievement of goals, improvement sooner than treatment plan indicated." A suggestion was also made to revise section (e)(3)(B)(iii) as follows: "A plan of treatment, including proposed methods of treatment, expected outcomes, and probable duration of treatment should be submitted to the insurance carrier for prospective and concurrent review and approval as early as possible." RESPONSE: a. The commission disagrees with the need to include application tables, similar to those created for the Spine Treatment Guideline, in the proposed guideline. Although application tables were included in the Spine Treatment Guideline, since its adoption many health care providers have found the table to be confusing and difficult to use. b. The commission agrees with the need to provide more explicit instructions and has added the commenter's suggested instructions for (d)(1)(G) and (d)(2)(F). c. The commission disagrees with the proposed revision for (e)(3)(B)(iii). The section, as currently written, is consistent with the Spine Treatment Guideline. The proposed revision appears to require insurance carrier approval prior to implementation of a treatment plan. Although the carrier is encouraged to review treatment plans, as part of a general review of the case, carrier approval of a treatment plan is not required prior to its implementation. COMMENT: Suggestion was made to allow the employer to participate in the return to work decision as part of a cooperative effort between the health care provider, insurance carrier, injured worker, and employer. RESPONSE: The commission disagrees with the need for additional clarification regarding employer participation. The responsibilities of the employer are clearly outlined in (d)(6) which states: "Employer. It is the responsibility of the employer to report the compensable injury in a timely fashion to ensure that there is no delay in the treatment of the compensable injury. It is also the responsibility of the employer to work with the insurance carrier and health care providers to ensure that the injured worker is afforded the opportunity to return to work in either a modified or full employment capacity as rapidly as possible within the medical limitations of his/her injury." The following comments were received regarding the ground rules. COMMENT: Support was expressed for the ground rule (subsection (e)(2)(K)) which referred the HCP to the Mental Health Treatment Guideline when the injured worker displays signs and symptoms which would require further evaluation by a Qualified Mental Health Provider. The commenter stated that this ground rule would provide a "bridge" between the Mental Health Treatment Guideline and other treatment guidelines. RESPONSE: The commission agrees. COMMENT: Concern was expressed by the commenter regarding the ground rule (subsection (e)(2)(F)) which referred to the ability of the injured worker to move between the levels of care or utilize interventions from more than one level of care simultaneously. Commenter contended that simultaneous use of care from two levels would not be considered to be within the normal limits of treatment. Suggested revision to this ground rule was: "The injured worker may move between levels of care or utilize interventions in more than one level of care, depending on clinical indicators. " RESPONSE: The commission disagrees with the need to revise this ground rule as suggested. Additional ground rules contained in that section, specifically (e)(2)(A)(iii) and (iv), and (e)(2)(G), require that the treatment of the injured worker should be provided in the least intensive setting, be cost effective, and that the level of service provided to the injured worker be substantiated in documentation submitted by the health care provider. For clarification, however, the following phrase has been added to subsection (e) (2)(F): "Although not the typical course of treatment, there may be circumstances in which . . . ". COMMENT: Support was expressed for ground rules (e)(2)(H) and (J). RESPONSE: The commission agrees. COMMENT: Concern was expressed regarding ground rule (e)(2)(G). Commenter felt that the documentation required by the proposed guideline was not sufficient for an insurance carrier conducting a bill/reimbursement review. Suggested revision to this ground rule was: "All health care providers providing services to an injured worker must substantiate in their documentation the level of service for which they request reimbursement. All payors have the responsibility to review all documentation submitted, and determine if additional documentation is needed, as the basis for the treatment and services provided." RESPONSE: The commission disagrees with the need to revise this ground rule. This ground rule is consistent with a similar requirement outlined in the Spine Treatment Guideline, (e)(2)(K). The suggested changes do not add to the requirements or clarity of the ground rules. Documentation requirements are addressed in the Medical Fee Guideline. The following comments were received regarding the nonoperative treatment tables. COMMENT: Commenter supported mental and behavioral evaluation and treatment utilization at the secondary and tertiary levels of care; however, commenter also advocated the addition of mental and behavioral evaluation and treatment at the primary level of care in cases where such factors figure prominently in the clinical presentation and can aggravate physical symptom presentation. The concern expressed by the commenter was the failure to list these interventions in the primary level of care would limit access to those types of treatment when necessary. RESPONSE: The commission disagrees with the need to include mental and behavioral evaluation and treatment in all primary levels of care. As is noted by the commenter, this type of evaluation and treatment is uncommon except in those diagnoses where such evaluation and treatment is already mentioned. In addition, by providing a ground rule which refers the health care provider back to the Mental Health Treatment Guideline, and noting in the Treatment Interventions section the phrase, "May include but not limited to", those rare instances in which an injured worker may require mental and behavioral evaluation and treatment in the acute phase of the injury (i.e., the primary level of care) can be addressed. COMMENT: Suggestion was made by the commenter to include a reference to "return-to-work" in all levels of care, not just the tertiary level of care, as is outlined in the proposed guideline. Suggested revisions were: a. For subsection (f)(2)(A): "The goals are the prevention of disease, alleviating or minimizing the effects of illness or injury and to maintain function, thereby reducing lost time and enabling return to work in some capacity." b. For subsection (f)(2)(B): "It is designed to facilitate return to productivity, including return to work in either full or modified duty, before the onset of chronic disability. This level of care may also be indicated for the injured worker whose physical capacity to work still does not meet the job requirements for heavy physical labor after adequate treatment, thereby causing an inability to return to full duty." RESPONSE: The commission agrees with the proposed revisions to further emphasize the need to reference "return to work" in all levels of care. The revisions proposed by the commenter have been included in the guideline. COMMENT: Suggestion was made to specify that the tertiary level of care is differentiated from the secondary level of care "by virtue of its being under medical direction." Concern was expressed that the lack of this distinction between secondary and tertiary care would lead to poor quality tertiary programs run by persons not qualified to administer the proper level of care. In addition, this specification was recommended to bring the proposed guideline in line with the Spine Treatment Guideline. RESPONSE: The commission agrees with the suggestion to include "medical direction" as part of the definition for the tertiary level of care in subsection (f)(2)(C). The definition for this level of care now reads: "Tertiary level of care. This level of care is interdisciplinary, individualized, coordinated and intensive, designed for the injured worker who demonstrates physical and psychological changes consistent with chronic disability. In general, differentiation from secondary treatment includes medical direction, intensity of services, severity of injury, individualized programmatic protocols with integration of physician, mental health, and disability or pain management services and specificity of physical/psychosocial assessment. There is a documented history ..." COMMENT: Suggestion was made by the commenter to add diagnostic laboratory tests for the following to the secondary level of care for neuropathy, reflex sympathetic dystrophy, and myofascial pain: hypothyroidism, diabetes, B12 and folate deficiencies, neuromuscular conditions, infectious conditions, other systemic and metabolic diseases, autoimmune disorders, and conditions related to cancer. RESPONSE: The commission disagrees with the need to further expand the list of diagnostic studies for those listed conditions. The treatment tables are not all inclusive and contain the caveat "May include but not limited to". If testing or treatment beyond that described in the treatment tables is necessary, additional documentation substantiating the need for such testing or treatment is required. Although testing for the disorders the commenter mentioned may be necessary to determine the causal relation of the symptoms to the compensable injury in some cases, those tests are not normally considered to be diagnostic work for a compensable injury. Therefore, these tests are not appropriate for inclusion in this guideline. COMMENT: Suggestion was made by the commenter to add peripheral nerve blocks as a treatment to the secondary level of care for neuropathy, reflex sympathetic dystrophy, and myofascial pain disorder. RESPONSE: The commission agrees. After reviewing the literature, and consulting with work group members, it appears that peripheral nerve blocks are considered to be normal and typical for the diagnoses listed by the commenter at the secondary level of care. This treatment has been added to the guideline. COMMENT: Suggestion was made to revise the treatment tables as follows: remove arthrogram as a diagnostic procedure from the secondary level of care table for Olecranon Bursitis, Olecranon Impingement; remove arthrogram from the primary level of care and add MRI to the secondary level of care for Bicipital, Supraspinatus (rotator cuff), Musculotendinous and Periarticular Problems of the Shoulder; remove arthrogram from primary, secondary, and tertiary levels of cares for Sprain/Strain, Tear, Shoulder Impingement Syndrome; and include "regular physical activity" after "concurrent home program" in the primary, secondary, and tertiary levels of care for Intra-articular Pathology Traumatic Arthritis and Reflex Sympathetic Dystrophy. RESPONSE: The commission disagrees with the proposed additions/deletions to the treatment tables. a. The literature provided by the work group supports the use of arthrograms for Olecranon Bursitis/Olecranon Impingement as a confirmatory test and supports the use of arthrograms as a diagnostic test for Tendinitis: Bicipital, Supraspinatus, and Musculotendinous and Periarticular Problems of the Shoulder and for Rotator Cuff: Sprain/Strain, Tear, and Shoulder Impingement Syndrome. b. Magnetic Resonance Imaging (MRI) was not felt to be appropriate as a diagnostic study at the secondary level of care for Tendinitis: Bicipital, Supraspinatus (rotator cuff) and Musculotendinous and Periarticular Problems of the Shoulder. It was felt to be appropriate, as a confirmatory test, at the tertiary level of care, to rule out other causes for continued symptomatology. c. Separate mention of "regular physical activity" is not necessary. This is a component of a home program and does not require separate mention in the treatment tables. COMMENT: Concern was expressed that the definitions of the levels of care are difficult to understand. It is not clear what role the employer has in the provision of these levels of care. RESPONSE: The commission disagrees. The role of the employer was clearly outlined in (d)(6). The definitions of the levels of care are general descriptions regarding the types of elements that can be found in each of the three levels of care as well as goals for those levels of care. The role of the employer is not specifically addressed in the definitions. COMMENT: General support was expressed regarding the description of levels of care. However, commenter expressed concern that goals were not as clearly outlined in the proposed guideline as they are in the Spine Treatment Guideline. Commenter suggested using the goals outlined in the Spine Treatment Guideline. In addition, the commenter stated that further clarification of clinical indicators for secondary and tertiary levels of care was necessary. RESPONSE: a. The commission disagrees with the need to include goal statements in each of the tables. A general outline of the goals has been included in the definitions for each level of care. b. The commission disagrees with the need for further clarification of the clinical indicators for secondary and tertiary levels of care. The clinical indicators, as outlined in the proposed guideline, were based on information provided by the work group. Unlike the Spine Treatment Guideline, the movement from one level of care to the next is more likely to be triggered by the degree of severity of the injury, the persistence of symptoms and the response of the injured worker to treatment instead of separate, distinct clinical indicators that only occur after a period of time has lapsed. Where the literature indicated distinctive symptoms for each level of care, those symptoms were listed in the tables. The following comments were received regarding surgical indicators. COMMENT: Concern was expressed that the list of indicators, as outlined in (g)(1) is unclear. Should all three conditions be met prior to the recommendation for surgery? RESPONSE: The commission disagrees. The indicators listed in (g)(1) are not all inclusive. The intention was that any or all of those indicators could represent a need for the health care provider to consider surgical correction of the clinical condition. COMMENT: Suggestion was made that flow charts, similar to those used in the Spine Treatment Guideline, be used instead of the outline of surgical indicators that is currently present in the proposed guideline. RESPONSE: The commission disagrees with the need to create a flow chart, similar to the ones utilized in the Spine Treatment Guideline, to outline a course of action for surgery. The work group, upon examination of the guideline, determined that the compiled information regarding the range of diagnoses contained within the proposed guideline did not lend itself to the use of a flow chart. Flow charting is more easily utilized when a clear series of yes/no questions can be asked and a clear set of answers can be provided. Due to the large number of diagnoses contained within this guideline, and the large number of possible scenarios regarding surgical options, the commission and work group were unable to create a simple, usable flow chart for this document. The following comments were received regarding the glossary. COMMENT: Concern was expressed that the definition of "functional capacity evaluation" ((h)(19)) is too open-ended, especially section (C) of this definition. Many machines/programs/devices claim to provide this type of service. The commenter states that this type of testing requires oversight. RESPONSE: The commission disagrees. The definition of a "functional capacity evaluation" clearly requires that all three elements be present before the service can be charged as this type of test. COMMENT: Concern was expressed that the definition of primary level of care ((h)(32)(A)) allows a partial or total cessation of work over a brief period of time. Commenter felt that clarification was needed, and suggested that the section be limited to situations where there is "no use of the affected area" or "affected muscle group". COMMENT: The commission disagrees that brief work cessation (two to three days maximum) should be limited to those injuries where "no use of the affected area" is a requirement. For example, in the case of a minor sprain/strain, a minimum duration work cessation may be necessary to prevent a further exacerbation of the injury. In addition, if the injured worker is unable to return to work beyond that brief time period, further involvement by the health care provider is required. The following general comments were received regarding the proposed new rule. COMMENT: Most of the commenters expressed general support for the proposed guideline, with some specifically supporting the goals of the guideline and others commenting on the quality of the document. RESPONSE: The commission agrees. COMMENT: Suggestion was made that since the proposed Medical Fee Guideline may eliminate the need for the TWCC 64, that references to that report should be deleted from the proposed guideline. RESPONSE: The commission agrees that there may be revisions to commission rules regulating required medical reports and has removed references to the TWCC 64 form to avoid any inconsistency with future guidelines. COMMENT: Suggestion was made that the proposed guideline use directive vs. permissive language. The following revisions to sections of the guideline were recommended by the commenter: a. (b)(2)(B): "to establish elements against which aspects of care can be compared to what is usual, customary, reasonable, and medically necessary." b. (b)(2)(C): "to establish a guideline to identify clinically acceptable courses of treatment for specific disorders." (This suggestion tracks the language in the Spine Treatment Guideline.) c. (c)(4): "Diagnostics. Diagnostic work should be performed in accordance with the recommended testing and timeframes contained in this guideline. If the need arises to deviate from the guideline, then a clinical rationale must be provided which adequately substantiates the need for this deviation. The need to repeat previously completed diagnostic procedures due to the quality of the study may trigger a review by the carrier. All health care providers involved in the treatment of an injured worker will share copies of all diagnostic studies, films, and reports in order to avoid unnecessary duplication of procedures. . ." d. (c)(5)(A): "All health care providers must encourage injured workers to be active participants in their health care treatment regimens and must communicate in writing to the injured worker realistic expectations regarding the potential outcome of this treatment as it relates to his/her physical functioning and/or ability to return to work. Therefore, the health care provider will document the injured worker's compliance with his/her treatment regimen when reporting the progress of his/her recovery." (The commenter felt that the proposed revisions of this section would ensure consistency between the health care provider's verbal explanation and instructions to the injured worker and the health care provider's narrative report. The commenter also felt that these revisions would allow the insurance carrier to monitor the injured worker's compliance with the treatment plan.) e. (c)(5)(B): "Health care providers must clearly explain to the injured worker in terms understandable to the injured worker the extent and severity of the injury and the treatment needed ..." f. (d)(1)(E): "The health care provider is responsible for educating the injured worker about health care treatment appropriate to the workers' compensation injury." g. (d)(1)(F): "This guideline requires the health care provider to address early return to work based upon the injured worker's functional capacity which includes ability, clinical status, and either full or modified job requirements." h. (d)(4): "Consulting or Peer Review Health Care Provider. This guideline should be used as a reference when advising the Medical Review Division or when the need for an unbiased medical opinion is indicated. The consulting or peer reviewer should use his/her clinical expertise in conjunction with the clinical intent of the guideline to address issues." i. (e)(2)(B): "All diagnostic studies, films, and reports and records must be made available to all health care providers to prevent unnecessary duplication of tests and examinations." (This suggested revision is consistent with previously recommended revisions to (c)(4).) j. (e)(2)(D): "All parties in the workers' compensation system must work together to ensure that the injured worker returns to work at the earliest medically appropriate time. Return-to-work is an important therapeutic approach which benefits the injured worker. The health care provider must communicate with the injured worker, employer and the insurance carrier to coordinate a successful return to work." k. (e)(3)(B): "Documentation must be provided by the health care provider to determine the level of care to be provided and the necessity for that care . .." l. (e)(3)(C): "Permanent impairment for compensable injuries in workers' compensation should be limited to those injuries and illnesses for which doctors are able to demonstrate objective findings in accordance with "Guides to the Evaluation of Permanent Impairment" (sec.408.124, Impairment Rating Guidelines)." RESPONSE: a. The commission agrees with two of the proposed revisions (items b and f listed previously). Those revisions add clarity to the guideline and will make the text consistent with the Spine Treatment Guideline. b. The commission disagrees with the remaining proposed revisions. Those revisions are not consistent with the wording contained in the Spine Treatment Guideline, nor do they substantively clarify the intent of the rule. i. (b)(2)(B): The establishment of usual, customary, reasonable, and medically necessary treatment is a process of which the treatment guideline is only a part. The determination of medical necessity is based not only on the guideline, but also on the injured worker's presenting symptoms. As is noted in (b)(1), the guideline "shall not be used as the sole reason for requirement or denial of treatments and services." ii. (c)(4): The carrier is not the only party that will use the guideline as a means to review the provision of care. This revision would limit that prerogative to the carrier. The replacement of the word "must" with "will" adds nothing to the meaning of the section. iii. (c)(5)(A): To limit communication between the health care provider and injured worker to a written explanation could seriously handicap the injured worker who cannot read. It is recommended that the health care provider document what is communicated to the injured worker and that the information be written in the injured worker's file. This will allow monitoring of healthcare through review of the file. iv. (c)(5)(B): This revision does not further clarify the intent of that statement. v. (d)(1)(F): The proposed revision does not clarify the health care provider's responsibility or add to its effectiveness. vi. (d)(4): The proposed revision is not necessary. The replacement of the word "and " with "or" in the context used does not change or clarify the meaning of the sentence. This section, as the heading suggests, applies to Consulting or Peer Review Health Care Provider. vii. (e)(2)(B): This guideline assists parties in management of treatment by providing guidance and expectations as opposed to specific mandates. The proposed revision is not necessary. However, upon review of the ground rule, a clerical error was discovered by the commission. The corrected ground rule is as follows: "Communication between all health care providers involved in treating the injured worker must ensure that all previous treatment and diagnostic tests are considered when developing a plan of treatment. All reports and records should be made available to all health care providers to prevent unnecessary duplication of tests and examinations. (As provided in subsection (c)(2), (3) and (4) of this section.)" viii. (e)(2)(D): This guideline assists parties in management of treatment by providing guidance and expectations as opposed to specific mandates. The proposed revision is not necessary, nor does it reflect the intent of the ground rule. ix. (e)(3)(B): This guideline assists parties in management of treatment by providing guidance and expectations as opposed to specific mandates. The proposed revision is not necessary, nor does it reflect the intent of the ground rule. x. (e)(3)(C): The proposed revision is not necessary, nor does it reflect the intent of the ground rule. COMMENT: Commenter made general comments regarding the treatment program currently provided to workers by commenter's company. The new rule is adopted pursuant to the Texas Labor Code, sec.402.061, which requires the commission to adopt rules necessary for the implementation and enforcement of the Texas Workers Compensation Act; the Texas Labor Code, sec.413.011, which authorizes the commission to establish by rule medical policies and guidelines relating to necessary treatments for injuries, and sec.413.013, which authorizes the commission to establish by rule a program for prospective, concurrent, and retrospective review and resolution of a dispute regarding health care treatments and services; and to establish by rule a program for the systematic monitoring of the necessity of treatments administered and fees charged and paid for medical treatments or services, including the authorization of prospective, concurrent, or retrospective review under the medical policies of the commission to ensure that the medical policies or guidelines are not exceeded. sec.134.1002. Upper Extremities Treatment Guideline. (a) Table of Contents. The following headings and their corresponding subdivisions comprise a table of contents for this section: (1) Introduction-subsection (b); (A) Purpose-subsection (b)(1); (B) Goals-subsection (b)(2); (C) Development Process-subsection (b)(3); (D) Philosophy of Care-subsection (b)(4); (2) Role of the Primary Gatekeeper-subsection (c): (A) Statutory Requirements-subsection (c)(1); (B) Primary Gatekeeper Responsibilities-subsection (c)(2); (C) Referrals-subsection (c) (3); (D) Diagnostics-subsection (c)(4); (E) Expectations and Compliance-subsection (c)(5); (3) Application Instructions for Involved Parties/Concepts and Governing Principles-subsection (d); (4) Ground Rules-subsection (e): (A) Introduction-subsection (e) (1); (B) Ground Rules-subsection (e)(2); (C) General Documentation Requirements-subsection (e)(3); (D) Documentation Requirements for Unrelated or Intercurrent Illness- subsection (e)(4); (5) Nonoperative Treatment Tables-subsection (f): (A) Introduction to Treatment Tables-subsection (f)(1); (B) Definition of Levels of Care-subsection (f)(2); (C) The Hand and Wrist-subsection (f)(3); (D) The Elbow-subsection (f)(4); (E) The Shoulder-subsection (f)(5); (F) Upper Extremity-subsection (f)(6); (6) Surgical Indicators-subsection (g): (A) Hand and Wrist-subsection (g)(1); (B) Elbow-subsection (g)(2); (C) Shoulder-subsection (g)(3); (D) Upper Extremities-subsection (g)(4); (7) Glossary-subsection (h); and (8) Bibliography-subsection (i); (b) Introduction. (1) This guideline shall become effective February 1, 1996, and remain effective until February 1, 1997. (2) Purpose. The purpose of this guideline is to clarify those services that are reasonable and medically necessary for treatment of upper extremity injuries for the injured workers of Texas. This guideline identifies a normal course of treatment. It is anticipated that there will be injured workers who will require less treatment than the average and other injured workers who will require more treatment. This is a guideline and shall not be used as the sole reason for requirement or denial of treatments and services. (3) Goals. The following outlines the primary goals of this guideline: (A) to assist all parties with regard to the appropriate treatment and management of upper extremity injuries; (B) to establish elements against which aspects of care can be compared; (C) to establish a guideline to identify clinically acceptable courses of treatment for specific disorders; (D) to establish documentation standards which support the appropriateness of the level of service; and (E) to provide a mechanism of prospective, concurrent, and retrospective review for efficient and effective health care utilization. (4) Development Process. The Texas Workers' Compensation Commission (TWCC), in conjunction with health care providers and other parties in the system, have developed clinical and diagnostic treatment guidelines. Three major components in the guideline development process are as follows: (A) Design and Methodology. A search of all 50 workers' compensation state agencies revealed that only a few had developed treatment guidelines. The format and design of these guidelines were mainly in narrative presentation. The focus of this treatment guideline is toward a matrix approach versus straight text. (B) Provider Work Group. Research into successful guidelines developed in the private sector identified that involvement from provider work groups achieves the best outcome regarding clinical policy development. (C) Public Evaluation. The evaluation of the developed guideline should be broad and include comments from employees, employers, health care providers and insurance carriers. (5) Philosophy of Care. The health care of the injured worker is a coordinated team effort. All parties including employees, employers, health care providers, insurance carriers and the Texas Workers' Compensation Commission should promote quality health care, injury specific treatment and appropriateness of care. Communication between all parties must remain open in order to achieve rapid recovery from the effects of the injury. This communication should promote a timely return to modified or full duty work that takes into account the job demands and the functional capabilities of the injured worker. (c) Role of Primary Gatekeeper. (1) Statutory Requirements. The following sections of the Texas Labor Code and specific Commission rules address key areas pertaining to those services that are reasonable and necessary for treatment of the upper extremity. (A) Section 408.021(a) . An employee who sustains a compensable injury is entitled to all health care reasonably required by the nature of the injury as and when needed. The employee is specifically entitled to health care that: (i) cures or relieves the effects naturally resulting from the compensable injury; (ii) promotes recovery; or (iii) enhances the ability of the employee to return to or retain employment. (B) Section 408. 021(b). Medical benefits are payable from the date of the compensable injury. (C) Section 408.021(c). Except in an emergency, all health care must be approved or recommended by the employee's treating doctor. (D) Section 408.025(b). The commission by rule shall adopt reasonable requirements for reports and records to be made available to other health care providers to prevent unnecessary duplication of tests and examinations. (E) Section 408.025(c). The treating doctor shall be responsible for maintaining efficient utilization of health care. (2) Primary Gatekeeper Responsibilities. (A) The role of the treating doctor is an important role which requires the treating doctor to monitor all health care services being provided for the injured worker. These responsibilities of the treating doctor are vital aspects of the goal to ensure that the injured worker receives quality health care. This monitoring extends to ensure: (i) the identification of the extent and severity of the injury initially; (ii) the appropriateness of all services; (iii) the relatedness of all services to the workers' compensation injury; (iv) separation and referral of nonrelated health care services for management by other health plans; (v) whether the treatment is duplicative, necessary and/or effective; (vi) the appropriate cost of the services; (vii) the quality of the treatment; and (viii) enhancement and promotion of effective communication among all involved parties. (B) Refer to Commission sec.126.9 of this title (relating to Choice of Treating Doctor and Liability for Payment) and sec.133.3 of this title (relating to Responsibilities of Treating Doctor) for responsibilities of the treating doctor. (3) Referrals. The treating doctor is responsible for recommending timely and appropriate referrals. The treating doctor must clearly delineate the clinical rationale for all referrals. The documentation contained in the TWCC required reports should clearly outline whether the purpose of the referral is to corroborate the diagnosis and/or proposed course of treatment or to initiate ongoing treatment. Once a consultation or referral has occurred, the consulting or referral doctor should submit a summary report or initiate a case management phone call back to the treating doctor. (4) Diagnostics. Diagnostic work should be performed in accordance with the recommended testing and timeframes contained in this guideline. If the need arises to deviate from the guideline, then a clinical rationale must be provided which adequately substantiates the need for this deviation. The need to repeat previously completed diagnostic procedures due to the quality of the study may trigger a review. All health care providers involved in the treatment of an injured worker must share copies of all diagnostic studies, films, and reports in order to avoid unnecessary duplication of procedures. Section 133.2 of this title (relating to Sharing Medical Reports and Test Results) addresses the need to share medical records, including diagnostic studies, to avoid duplication. Section 133.106 of this title (relating to Fair and Reasonable Fees for Required Reports and Records) addresses reimbursement for copies of records. (5) Expectation and Compliance. (A) All health care providers must encourage injured workers to be active participants in their health care treatment regimens and must communicate to the injured worker realistic expectations regarding the potential outcome of this treatment as it relates to his/her physical functioning and/or ability to return to work. Therefore, it is important to document the injured worker's compliance with his/her treatment regimen when reporting the progress of his/her recovery. (B) Health care providers must explain to the injured worker in clear terms the extent and severity of the injury and the treatment needed. Health care providers must define the symptomatology that is directly and/or indirectly related to the injury and specify treatment not covered under workers' compensation. (d) Application Instructions for Involved Parties-Concepts and Governing Principles. (1) Health Care Provider. This guideline is to be used as a tool by the health care provider to establish the required elements for all providers to initiate and continue treatment. If, for example, a provider's treatment deviates from the guideline, this would require documentation of a clearly delineated rationale for the need for this treatment. (A) This guideline identifies typical treatment based on normal tissue healing responses for the average injured worker. (B) It is expected that a subset of injured workers will be found to be outside the parameters of these guidelines. (C) This guideline should be used as a tool which identifies the recommended treatment parameters for treatment of injured workers within the workers' compensation system. (D) This guideline identifies the need to provide documentation which clearly explains the reason for the treatment, the relatedness to the workers' compensation injury and alternative treatment. (E) The health care provider is responsible for educating the injured worker about health care treatment appropriate to the workers' compensation injury. (F) This guideline recommends early return to work based upon the injured worker's functional capacity which includes ability, clinical status, and either full or modified job requirements. (G) The health care provider is responsible for formulating a plan of treatment and revising the plan of treatment based on response to treatment. The plan of treatment should be provided to the insurance carrier as early as possible. (2) Insurance Carriers. The insurance carrier should use this guideline to compare treatment prospectively, concurrently and retrospectively with the predetermined elements contained in the guides. (A) This document and its parameters serve only as a guideline and are not to be used as the sole reason for denial or requirement of treatments and services. (B) This guideline provides a tool by which to monitor the injured worker's recovery process. (C) This guideline serves as a tool to assist the insurance carriers in the medical audit process. (D) This guideline is not to be used to direct care toward a specific health care discipline or to a specific type of treatment. It is the responsibility of the insurance carrier to provide their specific documentation and rationale if treatment is denied. This rationale may include elements of the guideline. Additional information regarding the rationale for denial of treatment may also be derived from the injured worker's medical records and from the professional opinion of a peer review, if utilized. (E) It is expected that a subset of injured workers will be found to be outside the parameters of this guideline. (F) The insurance carrier is responsible for performing a focus review of injury. This focus review will primarily consist of case management. The focus review must clarify and attempt to reach agreement that the proposed treatment is appropriate as early as possible. Concurrent case management and bill review activities should address and focus on adherence to treatment plans, clinical progress, return to work issues, medical necessity and the following: (i) Injured worker compliance with the treatment; (ii) Services provided consistent with treatment plan; (iii) Response to treatment; (iv) Improvement in injured workers' progress; (v) Recommendations for changes in treatment in situations where there is no compliance, plateau, and/or there is minimal or no progress; (vi) Achievement of goals, improvement sooner than treatment plan indicated. (3) Medical Review Division. The Medical Review Division will use the guideline as a tool for the basis of their administrative review of prospective, concurrent and retrospective treatment. It will also be used as a tool in conducting on-site audits for both health care providers and insurance carriers. (4) Consulting or Peer Review Health Care Provider. This guideline should be used as a reference when advising the Medical Review Division and when the need for an unbiased medical opinion is indicated. The peer reviewer should use his/her clinical expertise in conjunction with the clinical intent of the guideline to address issues. (5) Injured Worker. It is essential that the injured worker understands his/her role in complying with recommended treatment. The recovery and return to work process requires active cooperation of the injured worker. (6) Employer. It is the responsibility of the employer to report the compensable injury in a timely fashion to ensure that there is no delay in the treatment of the compensable injury. It is also the responsibility of the employer to work with the insurance carrier and health care providers to ensure that the injured worker is afforded the opportunity to return to work in either a modified or full employment capacity as rapidly as possible within the medical limitations of his/her injury. (e) Ground Rules. (1) Introduction. The guidelines are not to be used as fixed treatment protocols. The guidelines reflect typical courses of intervention. It is acknowledged that, in atypical cases, treatment may fall outside these guidelines. However, those cases that exceed the guidelines' level of treatment will be subject to more careful scrutiny and review and will require documentation of the special circumstances justifying that treatment. The guidelines should not be seen as prescribing the type, frequency, or duration of treatment. Treatment must be based on injured worker's need and the doctor's professional judgment. (2) Ground Rules. (A) Notwithstanding any other provision of this rule, treatment of a work related injury must be: (i) adequately documented; (ii) evaluated for effectiveness and modified based on clinical changes; (iii) provided in the least intensive setting; (iv) cost effective; (v) consistent with this guideline or contain a documented clinical rationale for deviation from this guideline; (vi) objectively measured and demonstrate functional gains; and (vii) consistent in demonstrating ongoing progress in the recovery process by appropriate re-evaluation of the treatment. (B) Communication between all health care providers involved in treating the injured worker must ensure that all previous treatment and diagnostic tests are considered when developing a plan of treatment. All reports and records should be made available to all health care providers to prevent unnecessary duplication of tests and examinations. (As provided in subsection (c)(2), (3) and (4) of this section.) (C) Patient education is an essential component in ensuring patient compliance to all treatment. Education is essential for the active cooperation of the patient in all aspects of health care and as a means to prevent re-injury. It is essential that the patient understand his/her role in the recovery and return to work process. (D) All parties in the workers' compensation system should work together to ensure that the injured worker returns to work at the earliest medically appropriate time. Return-to-work is an important therapeutic approach which benefits the injured worker. The health care provider should communicate with the injured worker, employer and the insurance carrier to coordinate a successful return to work. (E) The level of service should be the same as the health care provider's usual and customary level of service regardless of the payor system. (F) Although not the typical course of treatment, there may be circumstances in which the injured worker may move between levels of care or utilize interventions in more than one level of care simultaneously, depending on clinical indicators. (G) All health care providers providing services to an injured worker have the responsibility to substantiate in their documentation the level of service for which they request reimbursement. All payors have the responsibility to review all documentation submitted as the basis for the treatment and services provided. (H) Treatment durations are cumulative; however it should not always be necessary to use full durations for any given level of care. (I) Any new treatment must meet acceptable standards of care and may be subject to review by Texas Workers' Compensation Commission. (J) Preauthorization of any treatments or services will be as required in the Commission's preauthorization rule. (K) When the injured worker displays signs and symptoms which may require further evaluation by a Qualified Mental Health Provider, refer to the Mental Health Treatment Guideline for parameters regarding documentation, evaluation and treatment. (3) General Documentation Requirements. (A) The health care provider's documentation is vital as an information source of the injured worker's injury and treatment, it also provides information which impacts income benefits. For these reasons, many of the Commission's rules have set time requirements for submission of required reports. For example, the TWCC 61 could be the first report submitted which informs the insurance carrier of the injury, and the TWCC 69 provides the determination of MMI and an impairment rating which may result in a change in income benefits. (B) Documentation should be provided by the health care provider to determine the level of care to be provided and the necessity for that care. The elements of the documentation may include: (i) a description of the injury, including the events surrounding that injury and the extent and severity of that injury; (ii) a description of any pre-existing condition(s), complicating conditions and/or any non-related conditions; (iii) a plan of treatment, including proposed methods of treatment, expected outcomes, and probable duration of treatment; (iv) updates to the plan of treatment as needed, including the clinical progress of the injured worker, and any revisions needed to the plan of treatment in light of the injured worker's response to treatment; (v) education/information provided to the injured worker regarding his injury and plan of treatment, and the injured worker's compliance with this plan of treatment; and (vi) documentation substantiating the need for deviation from the guideline, if necessary. (C) Permanent impairment for compensable injuries in workers' compensation should be limited to those injuries and illnesses for which doctors are able to demonstrate objective findings. (D) The need for emergency treatment must be based on the doctor's professional judgment. This documentation must provide a clear explanation of the nature of the emergency, the injured worker's medical condition, complications which could occur as well as any irreversible conditions which occurred or could occur as a result of this event. (4) Documentation Requirements for Unrelated or Intercurrent Illness. Situations may arise where certain medical conditions need to be delineated or clarified prior to intervention. Treatment administered to other body areas (not a part of the original injury) or for a pre-existing medical condition(s) must be identified and the relation of this treatment to the compensable injury documented by the health care provider. If it appears that this treatment is not related to the compensable injury, the injured worker should be informed by the health care provider that this treatment may not be covered by the insurance carrier. The rationale for such treatment and its relation to the compensable injury should also be clearly documented for the insurance carrier by the health care provider. (f) Nonoperative Treatment Tables. (1) Introduction to Nonoperative Treatment Tables. The treatments, set out in the following tables, represent typical appropriate treatment for a given period of time according to the diagnosis(es). The "Treatment Interventions" sections and "Diagnostic Procedures" sections of the Treatment Tables are in alphabetical order and do not infer numerical sequence. It is anticipated that there will be some injured workers who will require less treatment, and other injured workers who will require more treatment than is outlined. This document serves as a guideline and should not be used as the sole reason for denial or requirement of treatment. The provision of specific services to an injured worker is dependent on the injured worker's diagnosis, and response to treatment. (2) Definition of Levels of Care. (A) Primary level of care. This level of care is generally considered to be appropriate for injured workers immediately following the compensable injury; however, the injured worker in this level of care may also be an early postoperative patient or may be experiencing an acute exacerbation of his/her chronic pain. Since partial or total cessation of work over a brief period of time (i.e., two to three days maximum) is also considered to be part of the primary level of care, further treatment by a health care provider may not be considered necessary at this level of care. Little or no deconditioning has occurred due to the injury, immobilization or decreased activity. The goals are the prevention of disease, alleviating or minimizing the effects of the illness or injury and to maintain function, thereby reducing lost time and enabling return to work in some capacity. (B) Secondary level of care. This level of care is the first stage of rehabilitation for those injured workers who have not returned to productivity through the normal healing process. It is designed to facilitate return to productivity, including return to work in either full or modified duty, before the onset of chronic disability. This level of care may also be indicated for the injured worker whose physical capacity to work still does not meet the job requirements for heavy physical labor after adequate treatment, thereby causing an inability to return to full duty. It is individualized, time limited and of limited intensity. The injured worker has a history of a limited-to-good response to early primary treatment with persistent symptoms limiting activities of daily living. The objective physical examination demonstrates findings suggestive of early deconditioning including loss of range of motion and/or strength with limitation of activities of daily living. Evidence of mental health or psychosocial barriers may be present which impede the injured worker's clinical progress. (C) Tertiary level of care. This level of care is interdisciplinary, individualized, coordinated, and intensive, designed for the injured worker who demonstrates physical and psychological changes consistent with chronic disability. In general, differentiation from secondary treatment includes medical direction, intensity of services, severity of injury, individualized programmatic protocols with integration of physician, mental health, and disability or pain management services and specificity of physical/psychosocial assessment. There is a documented history of persistent failure to respond to nonoperative or operative treatment which surpasses the usual healing period for that injury. Psychosocial issues such as substance abuse, affective disorders, and other psychological disorders may be present. There is a documented inhibition of physical functioning evidenced by pain sensitivity, loss of sensation, and nonorganic signs such as fear which produce a physical inhibition or limited response to reactivation treatment. This level of care may also be indicated for the injured worker whose physical capacity to work still does not meet the job requirements for heavy physical labor after adequate treatment, thereby causing an inability to return to full duty. This situation would be evidenced by an excessive transitional period of light duty or significant episodes of lost work time due to the need for continued medical treatment. This level of care is also indicated for those injured workers who cannot tolerate either primary or secondary levels of care. (D) Criteria to distinguish between secondary and tertiary level of care. Many factors may determine the choice between secondary and tertiary levels of care. In general, if lower cost secondary treatment can be effective, this level of care is preferred over the more expensive tertiary care. However, if the documented condition of the injured worker is indicative of the need for more intensive treatment, the tertiary level of care may be more appropriate. Key factors in determining the need for secondary versus tertiary care include: (i) the time elapsed since injury; (ii) the presence of psychosocial barriers to recovery such as depression, substance abuse, personality disorder, etc., and the severity of these barriers; (iii) the lack of responsiveness to previously attempted treatment; (iv) the severity of physical/functional deconditioning; and/or (v) socioeconomic barriers to recovery. (3) Hand and Wrist Treatment Tables. (A) Figure 1: 28 TAC sec.134.1002(f)(3)(A). (B) Figure 2: 28 TAC sec.134.1002(f)(3)(B). (C) Figure 3: 28 TAC sec.134.1002(f)(3)(C). (4) Elbow Treatment Tables. (A) Figure 4: 28 TAC sec.134.1002(f)(4)(A). (B) Figure 5: 28 TAC sec.134.1002(f)(4)(B). (C) Figure 6: 28 TAC sec.134.1002(f)(4)(C). (D) Figure 7: 28 TAC sec.134.1002(f)(4)(D). (E) Figure 8: 28 TAC sec.134.1002(f)(4)(E). (F) Figure 9: 28 TAC sec.134.1002(f)(4)(F). (5) Shoulder Treatment Tables. (A) Figure 10: 28 TAC sec.134.1002(f)(5)(A). (B) Figure 11: 28 TAC sec.134.1002(f)(5)(B). (C) Figure 12: 28 TAC sec.134.1002(f)(5)(C). (D) Figure 13: 28 TAC sec.134.1002(f)(5)(D). (E) Figure 14: 28 TAC sec.134.1002(f)(5)(E). (F) Figure 15: 28 TAC sec.134.1002(f)(5)(F). (6) Upper Extremities Tables. (A) Figure 16: 28 TAC sec.134. 1002(f)(6)(A). (B) Figure 16: 28 TAC sec.134.1002(f)(6)(B). (C) Figure 18: 28 TAC sec.134.1002(f)(6)(C). (D) Figure 19: 28 TAC sec.134.1002(f)(6)(D). (E) Figure 20: 28 TAC sec.134.1002(f)(6)(E). (F) Figure 21: 28 TAC sec.134.1002(f)(6)(F). (G) Figure 22: 28 TAC sec.134.1002(f)(6) (G). (H) Figure 23: 28 TAC sec.134.1002(f)(6)(H). (I) Figure 24: 28 TAC sec.134.1002(f)(6)(I). (J) Figure 25: 28 TAC sec.134.1002(f) (6)(J). (K) Figure 26: 28 TAC sec.134.1002(f)(6)(K). (L) Figure 27: 28 TAC sec.134.1002(f)(6)(L). (M) Figures 28 and 29: 28 TAC sec.134.1002(f)(6)(M). (N) Figures 30 and 31: 28 TAC sec.134.1002(f) (6)(N). (O) Figure 32: 28 TAC sec.134.1002(f)(6)(O). (P) Figures 33 and 34: 28 TAC sec.134.1002(f)(6)(P). (Q) Figure 35: 28 TAC sec.134.1002(f)(6)(Q). (R) Figure 36: 28 TAC sec.134.1002(f)(6)(R). (S) Figure 37: 28 TAC sec.134.1002(f)(6)(S). (T) Figure 38: 28 TAC sec.134.1002(f)(6)(T). (U) Figure 39: 28 TAC sec.134.1002(f)(6) (U). (V) Figure 40: 28 TAC sec.134.1002(f)(6)(V). (W) Figure 41: 28 TAC sec.134.1002(f)(6)(W). (X) Figure 42: 28 TAC sec.134.1002(f) (6)(X). (Y) Figure 43: 28 TAC sec.134.1002(f)(6)(Y). (Z) Figure 44: 28 TAC sec.134.1002(f)(6)(Z). (g) Surgical Indications. Indications for surgery include but are not limited to the following list. (1) Hand and Wrist. Tendinitis/Stenosing. Tenosynovitis/Musculotendinitis/Musculotendinous Problems. Indications for surgery include, but are not limited to: (A) unresponsive to at least a four to eight week trial of conservative treatment; (B) tendon is locked in position; and/or (C) severe pain is present in the finger, thumb or wrist which is unresponsive to conservative therapy. (2) Elbow. (A) Musculotendinitis/Tendinitis (Lateral Epicondylitis, Medial Epicondylitis, Musculotendinous and Periarticular Problems of the Elbow) . Indications for surgery include, but are not limited to: (i) failure to respond to non-operative treatment program after six to 12 months; (ii) no improvement after a total of three corticosteroid injections; (iii) presence of atrophy or weakness of the forearm extensors; and/or (iv) early surgical intervention (before six months), which may be considered if the patient is severely disabled. (B) Olecranon Bursitis. Indications for surgery include, but are not limited to: (i) infection is present; and/or (ii) bursitis is recurrent despite aspiration. (3) Shoulder. Rotator Cuff (Sprain/Strain, Tear, Shoulder Impingement Syndrome). Indications for surgery include, but are not limited to: (A) confirmed tear unresponsive to physical medicine; and/or (B) profound weakness. (4) Upper Extremities. (A) Neuropathy. (i) Indications for Surgery in Carpal Tunnel Syndrome. Indications for surgery include, but are not limited to: (I) failure to respond to non-operative treatment; (II) presence of thenar atrophy or weakness or significant hyperesthesia/dysesthesia (especially with objective impairment of sensibility as determined by two point discrimination or by light touch); (III) progressive symptoms; (IV) presence of space-occupying lesion in carpal canal; and/or (V) presence of compartment syndrome or extensive injury to forearm and wrist. (ii) General Indications. Indications for surgery include, but are not limited to EMG/NC studies indicative of neuropathy accompanying positive physical findings and symptoms that are persistent despite conservative management (B) Muscle/Ligament/Capsular Injuries (Acute/Chronic). (i) Indications for Surgery in Ulnar Collateral Ligament Injury of the Thumb (Sprain/Tear). Indications for surgery include, but are not limited to: (I) any displaced or avulsed fracture with ligament attachment; (II) complete ligament disruption; (III) Stener's lesion (displacement of the ulnar collateral ligament superficial to the abductor tendon); (IV) open wound; and/or (V) open contaminated wound. (ii) Indications for Surgery in DeQuervain's Stenosing Tenosynovitis. Indications for surgery include, but are not limited to: (I) no response or incomplete response to nonoperative treatment after six to 12 weeks of treatment; and/or (II) presence of a condition which is not amenable to nonsurgical treatment (e.g., separate abductor pollicis longus and extensor pollicis brevis tendon compartments). (iii) General Indications. Indications for surgery include, but are not limited to: (I) joint instability; (II) joint malalignment; and/or (III) pain impairing the functional use of the joint; (C) Fractures. (i) Indications for Surgery in Clavicle Fracture. Indications for surgery include, but are not limited to displaced fractures. (ii) Indications for Surgery in Fracture Surgical Neck, Humerus. Indications for surgery include, but are not limited to: (I) displaced or angulated fracture that needs closed reduction; (II) displaced or angulated fracture needing open reduction and internal fixation of the fragments; and/or (III) associated neurologic or vascular injury present. (iii) Indications for Surgery in Distal Radius Fracture. Indications for surgery include, but are not limited to: (I) displaced fracture requiring reduction and immobilization; (II) comminuted displaced fracture requiring reduction and fixation; (III) open fracture; and/or (IV) acute carpal tunnel syndrome; (V) associated complex soft-tissue injury (consideration of compartment syndrome); and/or (VI) failure of outpatient treatment. (iv) General Indications. Indications for surgery include, but are not limited to: (I) displaced fracture requiring reduction and immobilization; (II) comminuted displaced fracture requiring reduction and fixation; (III) open fracture; and/or (IV) nonunion of the fracture. (D) Avascular Necrosis. (E) Intraarticular Pathology (Traumatic Arthritis). Indications for surgery include, but are not limited to: (i) persistent synovitis; (ii) locking of the joint; and/or (iii) painful traumatic arthritis documented radiologically. (F) Joint Instability. Indications for surgery include, but are not limited to repeated episodes of instability despite conservative therapy (G) Lacerations (Tendons, Nerves). Indications for surgery include, but are not limited to: (i) open wound; and/or (ii) open contaminated wound. (H) Crush Injuries. (h) Glossary. (1) Acceptable standards of care. (A) Standard-something established by authority, custom, or general consent as a model or example; the generally accepted norm for quality and quantity. (B) Acceptable standards of care-outlines of the types of tests and treatments which are established as normal and warranted for a specific type of injury. (2) Active care vs. passive care. (A) Active care-modes of treatment or care requiring that the injured worker participate in the level of care received. (B) Passive care-modes of treatment or care which do not require the injured worker to participate in his/her care; i.e., the care is "done to" or "applied to" the injured worker (e.g., hot packs or cold packs) (3) Algorithm-a step-by-step procedural pathway for solving a problem or accomplishing some end. (4) Assessment/Evaluation-the act or process of inspecting or testing for evidence of injury, disease or abnormality. (5) Chronic pain management-a program which provides coordinated, goal- oriented, interdisciplinary team services to reduce pain, improve functioning, and decrease the dependence on the health care system of persons with chronic pain syndrome. (6) Clinical plateau-a period of time of relative stability in which the injured worker displays minimal or minor changes in his/her condition. (7) Clinical progress vs. lack of clinical progress. (A) Clinical progress-documented improvement in the condition of the injured worker, in response to the injured worker's current treatment program. (B) Lack of clinical progress-documented absence of change in the condition of the injured worker over a period of time of no less than one month, requiring re-evaluation of the injured worker's condition and re-evaluation of the current treatment program. (8) Consulting doctor-a doctor who provides an opinion or advice regarding the evaluation and/or management of a specific problem, as requested by the treating doctor, the Commission, or the insurance carrier. A consulting doctor may only initiate diagnostic and/or therapeutic services with approval from the treating doctor. (9) Decompensation-the inability of the body to maintain adequate functioning in the presence of an injured, abnormal, or nonfunctioning body system (10) Denial parameters-a set of established elements or boundaries beyond which testing or treatment may be denied. (11) Diagnosis-the art or act of identifying a disease or injury from evaluation of its signs and symptoms. (12) Diagnostic module-a standard which establishes normal parameters or boundaries of time within which to perform studies to assist in identifying a disease, injury, or abnormality. (13) Diagnostic tests-objective studies performed to assist in identifying a disease, injury, or abnormality. (14) Doctor-a doctor of medicine, osteopathic medicine, optometry, dentistry, podiatry, or chiropractic who is licensed and authorized to practice. (15) Examination-the act or process of inspecting or testing for evidence of disease, injury, or abnormality. (16) First doctor. (A) First-preceding all others in time (B) First doctor-the initial doctor who evaluates and treats the injured worker, and who may or may not ultimately become the treating doctor. (17) Focus review-to critically examine the prospective, concurrent, and retrospective care received by the injured worker as related to the compensable injury. (18) Frequency of intervention. (A) Intervention-the process of interfering with a condition to modify or change its course. (B) Frequency of intervention-the number of occurrences in a specified time in which the health care provider acts to treat the injured worker. (19) Functional capacity evaluation-a battery of tests administered and evaluated to determine the injured worker's ability to perform tasks related to both his daily activities and his job performance. This evaluation consists of the following elements: (A) a physical examination and neurological evaluation which includes an assessment of the physical appearance of the injured worker, flexibility of the extremity joint or spinal region, posture and deformities, vascular integrity, the presence or absence of sensory deficit, muscle strength and reflex symmetry; (B) a physical capacity evaluation which includes quantitative measurements of range of motion and muscular strength and endurance; and (C) a dynamic functional abilities test which includes activities of daily living, hand function tests, cardiovascular endurance tests, and static positional tolerance. (20) Health care facility-a hospital, emergency clinic, outpatient clinic, or other facility providing health care. (21) Health care practitioner. A health care practitioner is: (A) an individual who is licensed to provide or render and provides or renders health care; or (B) a nonlicensed individual who provides or renders health care under the direction or supervision of a doctor. (22) Health care provider- a health care facility or health care practitioner (23) Impairment-any anatomic or functional abnormality or loss existing after maximum medical improvement that results from a compensable injury and is reasonably presumed to be permanent. (24) Interdisciplinary programs-programs in which the delivery of services is provided by more than one type of health care service (e.g., occupational therapy, physical therapy, counseling services, medical services) and in which there is a coordination between the disciplines regarding the care plan and the delivery of care to the injured worker. Examples of this type of program include work hardening, outpatient medical rehabilitation, and chronic pain management. (25) Intervention-the act or fact of interfering with a condition to modify it or with a process to change its course. (26) Level of service-refers to primary, secondary, or tertiary care. (27) Maximum Medical Improvement (MMI)-the earlier of the following two items: (A) the earliest date after which, based on reasonable medical probability, further material recovery from or lasting improvement to an injury can no longer reasonably be anticipated; or (B) the expiration of 104 weeks from the date on which income benefits begin to accrue. (28) Medical necessity-the determination that the tests or treatment provided is required based on the presenting signs and symptoms. (29) Module-a standard or unit of measurement (30) Objective findings. (A) Objective-perceptible to persons other than the affected individual. (B) Objective findings-signs, or test results that can be measured or quantified or are otherwise perceptible to persons other than the affected individual. (31) Outpatient medical rehabilitation-a program of coordinated and integrated services, evaluation, and/or treatment with emphasis on improving the functional levels of the persons served. The program is interdisciplinary in nature and is applicable to those persons who have severe functional limitations of recent onset or recent regression or progression or those persons who have not had prior exposure to rehabilitation. Services may be directed toward the development and/or maintenance of the optimal level of functioning and community integration of the persons served. (32) Primary/secondary/tertiary levels of care. (A) Primary level of care-this level of care is generally considered to be appropriate for injured workers immediately following the compensable injury; however, the injured worker in this level of care may also be an early postoperative patient or may be experiencing an acute exacerbation of his/her chronic pain. Since partial or total cessation of work over a brief period of time (i.e., two to three days maximum) is also considered to be part of the primary level of care, further treatment by a health care provider may not be considered necessary at this level of care. Little or no deconditioning has occurred due to the injury, immobilization or decreased activity. The goals are the prevention of disease, alleviating or minimizing the effects of the illness or injury and to maintain function. (B) Secondary level of care-this level of care is the first stage of rehabilitation for those injured workers who have not returned to productivity through the normal healing process. It is designed to facilitate return to productivity before the onset of chronic disability. It is individualized, time limited and of limited intensity. The injured worker has a history of a limited- to-good response to early primary treatment with persistent symptoms limiting activities of daily living. The objective physical examination demonstrates findings suggestive of early deconditioning including loss of range of motion and/or strength with limitation of activities of daily living. Evidence of mental health or psychosocial barriers may be present which impede the injured worker's clinical progress. (C) Tertiary level of care-this level of care is interdisciplinary, individualized, coordinated, and intensive, designed for the injured worker who demonstrates physical and psychological changes consistent with chronic disability. There is a documented history of persistent failure to respond to nonoperative or operative treatment which surpasses the usual healing period for that injury. Psychosocial issues such as substance abuse, affective disorders, and other psychological disorders may be present. There is a documented inhibition of physical functioning evidenced by pain sensitivity, loss of sensation, and nonorganic signs such as fear which produce a physical inhibition or limited response to reactivation treatment. This level of care may also be indicated for the injured worker whose physical capacity to work still does not meet the job requirements for heavy physical labor after adequate treatment, thereby causing an inability to return to full duty. This situation would be evidenced by an excessive transitional period of light duty or significant episodes of lost work time due to the need for continued medical treatment. This level of care is also indicated for those injured workers who cannot tolerate either primary or secondary levels of care. (33) Proper clinical documentation-written records which meet the requirements outlined by statute and rule and which convey the following information to the required parties: (A) a description of the injury, including the events surrounding that injury and the extent and severity of that injury; (B) a description of any pre-existing condition(s), complicating conditions, and/or any non-related conditions; (C) a plan of treatment, including proposed methods frequency and probable duration of treatment, and expected outcomes; (D) updates to the plan of treatment as needed, including the clinical progress of the injured worker, and any revisions needed to the treatment plan in light of the injured worker's response to treatment; (E) education/information provided to the injured worker regarding his injury and plan of treatment, and the injured worker's compliance with this plan of treatment; and (F) documentation substantiating the need for deviation from the guideline, if necessary. (34) Reason for denial-see denial parameters. (35) Referral-the process of directing or redirecting (as a medical case or a patient) to an appropriate specialist or agency for definitive treatment. (36) Referral doctor-a consulting doctor who initiates health care treatments at the request of the treating doctor. (37) Secondary treatment-see secondary level of care under primary/secondary/tertiary level of care. (38) Self-referral-the direction of a patient to another doctor, institution or facility whereby the referring doctor has a financial or conflict of interest element. (39) Significant neurological deficit-rapidly progressing symptoms of sensory impairment, progressive numbness, or increased physiological impairment such as severe weakness, bowel or bladder dysfunction directly related to the spinal injury. one person whom the doctor/health care provider(s) may contact for all questions regarding a specific injured worker. (41) Sprain-an injury to a ligament. (A) Mild (Grade 1) -only a few fibers are torn; ligament is mostly intact and the joint is stable; (B) Moderate (Grade 2)-more fibers are torn, resulting in some instability with abnormal joint motion and some functional loss; (C) Severe (Grade 3)-ligaments are completely disrupted and instability may be severe (synonymous with marked). (42) Static-characterized by a lack of movement or change. (43) Strain-an injury to a muscle. (A) Mild (Grade 1)-only a few fibers are torn; muscle is mostly intact and functional; (B) Moderate (Grade 2)-more muscle fibers are torn resulting in muscle pain with contraction; (C) Severe (Grade 3)-tendons are completely disrupted, extreme pain and loss of use of muscle. (44) Subjective complaints-report of signs or symptoms, perceivable only by the injured employee, relating to the injury and which cannot be independently verified or confirmed by recognized laboratory or diagnostic tests or signs observable by physical examination. (45) Time limited-a specific duration of clock or calendar time which is not exceeded on a routine basis. (46) Treating doctor-the doctor primarily responsible for coordinating the employee's health care for an injury. (synonymous with Primary Gatekeeper) (47) Treatment duration-calendar time allowed for treatment for a specific level of care. (48) Treatment module-a standard which establishes routine parameters of time within which to provide therapy for the illness or injury. (49) treatment plan-this is a written document which must contain the following components: (A) type of intervention/treatment modality; (B) frequency of treatment; (C) expected duration of treatment; (D) expected clinical response to treatment; and (E) specification of a re-evaluation timeframe. (50) Work conditioning-a highly structured, goal-oriented, individualized treatment program using real or simulated work activities in conjunction with conditioning tasks. Work conditioning is a single disciplinary approach. (51) Work hardening-a highly structured, goal-oriented, individualized treatment program designed to maximize the ability of the persons served to return to work. Work Hardening programs are interdisciplinary in nature with a capability of addressing the functional, physical, behavioral, and vocational needs of the injured worker. Work Hardening provides a transition between management of the initial injury and return to work while addressing the issues of productivity, safety, physical tolerances, and work behaviors. Work Hardening programs use real or simulated work activities in a relevant work environment in conjunction with physical conditioning tasks. These activities are used to progressively improve the biomechanical, neuromuscular, cardiovascular/metabolic, behavioral, attitudinal, and vocational functioning of the persons served. (i) Bibliography. The following items comprise a bibliography for this guideline. (1) The American Academy of Orthopaedic Surgeons. REVISED CLINICAL POLICY DRAFTS. May, 1995. (2) The American Academy of Orthopaedic Surgeons. PHASE ONE DRAFT ALGORITHMS. National Orthopaedic Leadership Conference. May, 1995. (3) The American College of Occupational and Environmental Medicine, Committee on Practice Parameters. UPPER EXTREMITY GUIDELINE. Unpublished, 1994. (4) American Society for Surgery of the Hand. REGIONAL REVIEW COURSE IN HAND SURGERY SYLLABUS. 1993. (5) Bonebrake, Alan R., Fernandez,Jeffrey E., Marley, Robert J., Dahalan, Jalauddin B., and Kilmer, Kelvin J. "A Treatment for Carpal Tunnel Syndrome: Evaluation of Objective and Subjective Measures." JOURNAL OF MANIPULATIVE AND PHYSIOLOGICAL THERAPEUTICS. Volume 13, Number 9. November/December, 1990. (6) Brier, Steven R. "Rotator Cuff Disease: Current Trends in Orthopedic Management." JOURNAL OF MANIPULATIVE AND PHYSIOLOGICAL THERAPEUTICS. Volume 15, Number 2. February, 1992. (7) Brox, Jens Ivar, Staff, Peer H., Ljunggren, Anne Elisabeth, and Brevik, John Ivar. "Arthroscopic Surgery Compared with Supervised Exercises in Patients with Rotator Cuff Disease (Stage II Impingement Syndrome)." BMJ. Volume 307. October 9, 1993. (8) Cantu, Robert I. and Grodin, Alan J. MYOFASCIAL MANIPULATION: THEORY AND CLINICAL APPLICATION. Aspen Publishers, Inc. 1992. (9) Crawford, John P. and Noble, William John. "Anterior Interosseous Nerve Paralysis: Cubital Tunnel (Kiloh-Nevin) Syndrome." JOURNAL OF MANIPULATIVE AND PHYSIOLOGICAL THERAPEUTICS. Volume 11, Number 3. June, 1988. (10) Dobrusin, Richard. "An Osteopathic Approach to Conservative Management of Thoracic Outlet Syndromes." THE JOURNAL OF THE AMERICAN OSTEOPATHIC ASSOCIATION. Volume 89, Number 8. August, 1989. (11) Feinberg, Ed. "Bicipital Tendinitis: The Glass Arm Pitcher." ICA INTERNATIONAL REVIEW OF CHIROPRACTIC. Volume 49. May/June, 1993. (12) Gelvberman, Richard H., Eaton, Richard, and Urbaniak, James R. "Peripheral Nerve Compression." INSTRUCTIONAL COURSE LECTURES. The American Academy of Orthoapaedic Surgeons, James D. Heckman, Editor. March, 1994. (13) Gilkey, David P. and Williams, Holly A. "Ergonomics & CTDs: The Problems, Causes, Enforcement and Solutions." ACA JOURNAL OF CHIROPRACTIC. August, 1994. (14) Goff, Charles W., Alden, John O., and Aldes, John H. TRAUMATIC CERVICAL SYNDROME AND WHIPLASH. J. B. Lippincott Company. (15) Greenman, Philip E. PRINCIPLES OF MANUAL MEDICINE. Williams & Wilkins. (16) Hammer, Warren I. FUNCTIONAL SOFT TISSUE EXAMINATION AND TREATMENT BY MANUAL METHODS: THE EXTREMITIES. Aspen Publishers, Inc. 1991. (17) Hosshmand, Hooshang. CHRONIC PAIN: REFLEX SYMPATHETIC DYSTROPHY PREVENTION AND MANAGEMENT. CRC Press, Inc. 1993. (18) Irowa, G. Ozin. "Avascular Necrosis of the Carpal Lunate: A Case Report." JOURNAL OF MANIPULATIVE AND PHYSIOLOGICAL THERAPEUTICS. Volume 10, Number 6. December, 1987. (19) Jahn, Warren T. "Spontaneously Reduced Partial Shoulder Dislocation: A Case Report and Literature Review." JOURNAL OF MANIPULATIVE AND PHYSIOLOGICAL THERAPEUTICS. Volume 5, Number 1. March, 1982. (20) Jaskoviak, Paul A. and Schafer, R.C. APPLIED PHYSIOTHERAPY: PRACTICAL CLINICAL APPLICATIONS WITH EMPHASIS ON THE MANAGEMENT OF PAIN AND RELATED SYNDROMES. Second Edition. The American Chiropractic Association. (21) Kushner, Shirley and Reid, David C. "Manipulation in the Treatment of Tennis Elbow." THE JOURNAL OF ORTHOPAEDIC AND SPORTS PHYSICAL THERAPY. Volume 7, Number 5. March, 1986. (22) Lea & Febiger, Publisher. ARTHRITIS AND ALLIED CONDITIONS: A TEXTBOOK OF RHEUMATOLOGY. Volume 12. Twelfth Edition. 1993. (23) Levine, David Z. "Burning Pain in an Extremity: Breaking the Destructive Cycle of Reflex Sympathetic Dystrophy." POSTGRADUATE MEDICINE. Volume 90, Number 2. August, 1991. (24) Liebenson, Craig S. "Thoracic Outlet Syndrome: Diagnosis and Conservative Management." JOURNAL OF MANIPULATIVE AND PHYSIOLOGICAL THERAPEUTICS. Volume 11, Number 6. December, 1988. (25) Mariano, Kurt A., McDougle, Mark A., and Tanksley, Gary W. "Double Crush Syndrome: Chiropractic Care of an Entrapment Neuropathy." JOURNAL OF MANIPULATIVE AND PHYSIOLOGICAL THERAPEUTICS. Volume 14, Number 4. May, 1991. (26) Mior, Silvano A. and Dombrowsky, N. "Scapholunate Failure: A Long-Term Clinical Follow-Up." JOURNAL OF MANIPULATIVE AND PHYSIOLOGICAL THERAPEUTICS. Volume 15, Number 4. May, 1992. (27) Reed, Presley, Editor. THE MEDICAL DISABILITY ADVISOR. Second Edition. LRP Publications. 1994. (28) Rogoff, Joseph B., Editor. MANIPULATION, TRACTION AND MASSAGE. Second Edition. Williams & Wilkins. (29) Schafer, R.C. CHIROPRACTIC MANAGEMENT OF SPORTS AND RECREATIONAL INJURIES. Williams & Wilkins. (30) Schnatz, Peter and Steiner, Charles. "Tennis Elbow: A Biomechanical and Therapeutic Approach." THE JOURNAL OF THE AMERICAN OSTEOPATHIC ASSOCIATION. Volume 93, Number 7. July, 1993. (31) Schultz, August L. THE SHOULDER, ARM AND HAND SYNDROME. (32) Shrode, Larry W. "Treating Shoulder Impingement Using the Supraspinatus Synchronization Exercise." JOURNAL OF MANIPULATIVE AND PHYSIOLOGICAL THERAPEUTICS. Volume 17, Number 1. January 1994. (33) Sin, Y. M., Sedgewick, A.D., Muckay, A.R., Bates, M.B., and Willoughby, D.A. "Effect of Electric Acupuncture Stimulation on Acute Inflammation." AMERICAN JOURNAL OF ACUPUNCTURE. Vol 11, Number 4. October-December, 1983. (34) State of California, Department of Industrial Relations, Division of Workers' Compensation. UPPER EXTREMITY GUIDELINES. Unpublished. (35) State of Oregon, Department of Consumer and Business Services, Workers' Compensation Division. CARPAL TUNNEL SYNDROME: DIAGNOSIS AND TREATMENT GUIDELINE. Draft, October 10, 1994. (36) Steiner, Charles. "Osteopathic Manipulative Treatment: What Does It Really Do?" THE JOURNAL OF THE AMERICAN OSTEOPATHIC ASSOCIATION. Volume 94, Number 1. January, 1994. (37) Sucher, Benjamin M. "Myofascial Manipulative Release of Carpal Tunnel Syndrome: Documentation with Magnetic Resonance Imaging." THE JOURNAL OF THE AMERICAN OSTEOPATHIC ASSOCIATION. Volume 93, Number 12. December, 1993. (38) Sucher, Benjamin M. "Myofascial Release of Carpal Tunnel Syndrome. " THE JOURNAL OF THE AMERICAN OSTEOPATHIC ASSOCIATION. Volume 93, Number 1. January, 1993. (39) Sucher, Benjamin M. "Palpatory Diagnosis and Manipulative Management of Carpal Tunnel Syndrome." THE JOURNAL OF THE AMERICAN OSTEOPATHIC ASSOCIATION. Volume 94, Number 8. August, 1994. (40) Sucher, Benjamin M. "Thoracic Outlet Syndrome -A Myofascial Variant: Part 1. Pathology and Diagnosis." THE JOURNAL OF THE AMERICAN OSTEOPATHIC ASSOCIATION. Volume 90. Number 8. August, 1990. (41) Sucher, Benjamin M. "Thoracic Outlet Syndrome -A Myofascial Variant: Part 2. Treatment." THE JOURNAL OF THE AMERICAN OSTEOPATHIC ASSOCIATION. Volume 90, Number 9. September, 1990. (42) Thomas, D., Williams, R.A., and Smith, D.S. "The Frozen Shoulder: A Review of Manipulative Treatment." RHEUMATOLOGY AND REHABILITATION. Volume 19, Number 3. 1980. (43) Urist, Marshall R., Editor-in-Chief. CLINICAL ORTHOPAEDICS AND RELATED RESEARCH. Number Two Hundred Eighty-Two. J.B. Lippincott Co. (44) Vernon, Howard. "The Role of Plethysmography in the Chiropractic Management of Costoclavicular Syndromes: Review of Principles and a Case Report." JOURNAL OF MANIPULATIVE AND PHYSIOLOGICAL THERAPEUTICS. Volume 5, Number 1. March, 1982. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on November 16, 1995. TRD-9514946 Susan Cory General Counsel Texas Workers' Compensation Commission Effective date: February 1, 1996 Proposal publication date: September 22, 1995 For further information, please call: (512) 440-3700 TITLE 30. ENVIRONMENTAL QUALITY Part I. Texas Natural Resource Conservation Commission Chapter 330. Municipal Solid Waste The Texas Natural Resource Conservation Commission (TNRCC) adopts amendments to sec.330.4 and sec.330.41, and new sec.330.70, concerning certain municipal solid waste management facilities including those used in the recovery and use of gas. On-site transfer facilities and facilities that recover and beneficially use gas will be exempt from permit requirements, will be required to register with the TNRCC, and will be required to design and operate the facility in accordance with requirements set forth in a new section. Sections 330.4, 330.41, and 330.70 are adopted with changes to the proposed text as published in the August 29, 1995 issue of the Texas Register (20 TexReg 6732). The amendments and new section are intended to encourage the development of certain facilities that recover and beneficially use gas. Pursuant to federal requirements of Subtitle D of the Resource Conservation and Recovery Act, landfills in Texas must manage landfill gases, thereby incurring costs. The beneficial use of such gases can, in some cases, offset the economic burden of managing landfill gases. The adopted changes implement House Bill 2315, 74th Legislature (1995), which amended the Texas Solid Waste Disposal Act, Texas Health and Safety Code, sec.361.0861 and sec.361.092. The bill exempts permitted municipal solid waste management facilities (landfills) involved in the recovery and use of gas from the TNRCC municipal solid waste permit requirements. The facilities must comply with certain design and operational requirements to maintain the integrity of the landfill. Comments were received from Browning-Ferris Industries and Texas Disposal Systems. Each commenter supports the adoption of the rule and expressed appreciation for the timely development of the rules. The TNRCC acknowledges their supportive comments. One of the commenters offered a number of suggested changes for clarification. TNRCC has added clarified language in four instances based on comments received. The term "transfer station" has been inserted for the term "transfer facility" in sec.330.4(d)(4) because "transfer station" is a defined term. The term "landfill facility" has been inserted for the term "landfill" in sec.330. 4(d)(4) to clarify that transfer stations may be located on any land within the boundaries of a permitted municipal solid waste landfill facility and not just within the boundaries of a municipal solid waste landfill unit. The phrase "energy and material recovery" has been inserted for the phrase "material extraction" in sec.330.4(n) to be consistent with language in the statute. The words "permit and/or" have been deleted from sec.330.41(j) because by statute a permit will no longer be required for these types of facilities. One commenter requested an explanation regarding the duration of a permit of a municipal solid waste landfill facility as used in conjunction with sec.330.4(d)(4). TNRCC believes that in reading sec.330.63 of this title (relating to Duration and Limits of a Permit) together with sec.330.10 of this title (relating to Closure) and Subchapter J of this title (relating to Closure and Post-Closure) that a permit is valid at least until the end of the facility's post-closure maintenance period, unless a different date is specified in the permit. A suggestion was made by one commenter that a cross reference in sec.305.70 of this title (relating to Permit Modifications) be made to clarify the relationship between requirements for facilities that recover gas for beneficial use and requirements for facilities that use gas control systems. TNRCC will make this clarification in a future rulemaking. Another suggestion was made that the public meeting could be eliminated. TNRCC finds that a public meeting is statutorily required for some registration authorizations in the municipal solid waste program, and consequently, TNRCC has elected to have each of the municipal solid waste registration authorizations have a public meeting for consistency. Another comment in regard to sec.330.70(e)(2) suggests that instead of making reference to sec.330.52 of this title (relating to Technical Requirements of Part I of the Application) for registration requirements, a separate section should be written specifying requirements for this type of registration. TNRCC finds that the reference to sec.330.52 is currently in use for other types of municipal solid waste registrations, however, TNRCC believes that the concept to clarify registration requirements has merit and expects to make the suggested changes in a future rulemaking. A comment in regard to sec.330.70(b), suggests that this section dealing with relationship to other rules be moved to sec.330.4(n). TNRCC believes that sec.330.70(b) regarding the relationship to other rules is adequately located for clarity. The TNRCC has added sec.330.70(f) regarding motion for reconsideration to be consistent with Senate Bill 741, as passed by the 74th Legislature, which amends sec.5.122 of the Texas Water Code. Subchapter A. General Information 30 TAC sec.330.4 The amendments and new section are adopted under the authority of the Texas Water Code, sec.5.103, which provides the TNRCC with the authority to carry out the powers and duties under the provisions of the Texas Water Code and other laws of this state, under House Bill 2315, as passed by the 74th Legislature, under Senate Bill 741 as passed by the 74th Legislature; and pursuant to the Texas Solid Waste Disposal Act, Texas Health and Safety Code sec.361.024, which provides the TNRCC with authority to regulate municipal solid waste and adopt rules as necessary to regulate the operation, management, and control of solid waste under its jurisdiction. sec.330.4. Permit Required. (a)-(c) (No change.) (d) A permit is not required for a municipal solid waste transfer station facility that is used in the transfer of municipal solid waste to a solid waste processing or disposal facility from: (1) (No change.) (2) a county with a population of less than 85,000; (3) a facility used in the transfer of municipal solid waste that transfers or will transfer 125 tons per day or less; or (4) a transfer station located within the permitted boundaries of a municipal solid waste landfill facility. (e)-(m) (No change.) (n) For energy and material recovery and gas recovery operations relating to municipal solid waste, a registration is required. A permit is not required for a municipal solid waste facility-Type IX that recovers gas for beneficial use. Those Type IX facilities that recover gas for beneficial use that are exempt from permitting under this subsection shall be registered with the executive director in accordance with sec.330.70 of this title (relating to Registration of Facilities that Recover Gas for Beneficial Use). However, exploratory and test operations for feasibility purposes may be conducted after approval of the operation by the executive director. (o)-(q) (No change.) This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on November 20, 1995. TRD-9515042 Kevin McCalla Director, Legal Division Texas Natural Resource Conservation Commission Effective date: December 11, 1995 Proposal publication date: August 29, 1995 For further information, please call: (512) 239-6087 Subchapter D. Classification of Municipal Solid Waste Facilities 30 TAC sec.330.41 The amendment is adopted under the authority of the Texas Water Code, sec.5.103, which provides the TNRCC with the authority to adopt any rules necessary to carry out the powers and duties under the provisions of the Texas Water Code and other laws of this state, and under House Bill 2315, as passed by the 74th Legislature; and pursuant to the Texas Solid Waste Disposal Act, Texas Health and Safety Code, sec.361.024, which provides the TNRCC with the authority to regulate municipal solid waste and adopt rules as necessary to regulate the operation, management, and control of solid waste under its jurisdiction. sec.330.41. Types of Municipal Solid Waste Sites. (a)-(i) (No change.) (j) Municipal solid waste facility-Type IX. A closed disposal facility, an inactive portion of a disposal facility, or an active disposal facility, used for extracting materials for energy and material recovery or for gas recovery for beneficial use is classified as Type IX. Registration requirements are contained in sec.330.4 of this title (relating to Permit Required). This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on November 20, 1995. TRD-9515041 Kevin McCalla Director, Legal Division Texas Natural Resource Conservation Commission Effective date: December 11, 1995 Proposal publication date: August 29, 1995 For further information, please call: (512) 239-6087 Subchapter E. Permit Procedures 30 TAC sec.330.70 The new section is adopted under the authority of the Texas Water Code, sec.5.103, which provides the Texas Natural Resource Conservation Commission (TNRCC) with the authority to adopt any rules necessary to carry out the powers and duties under the provisions of the Texas Water Code, the Texas Solid Waste Disposal Act, Texas Health and Safety Code, sec.361.024 and sec.361. 061, which provides the TNRCC with the authority to regulate municipal solid waste and adopt rules as necessary to regulate the operation, management and control of solid waste under its jurisdiction. sec.330.70. Registration of Facilities that Recover Gas for Beneficial Use. (a) Applicability. This section shall apply to a municipal solid waste management Type IX facility which is exempt from permit requirements under sec.330.4(n) of this title (relating to Permit Required). (b) Relationship with other rules. All municipal solid waste landfill facilities accepting waste after October 9, 1993, applying for a non-beneficial use gas control system for any area within the facility's permit boundary shall apply for a permit modification pursuant to sec.305.70 of this title (relating to Permit Modification). (c) Relationship to previously permitted Type IX facilities. Type IX facility permits previously issued for the recovery and beneficial use of landfill gas are considered to remain valid under applicable permit provisions pursuant to the Texas Health and Safety Code, sec.361.092. (d) Public meeting. The owner or operator of each facility that recovers gas for beneficial use shall conduct a public meeting in the local area at least 30 days before beginning facility operation, or as determined by the executive director, to describe the proposed action to the general public. A one time notice of the public meeting shall be provided by the facility owner or operator two weeks prior to the meeting in the format prescribed in the Health and Safety Code, sec.361.0791(d) and (e) (relating to Public Meeting and Notice Requirements). Evidence that the meeting was held shall be submitted to the TNRCC in the form of a copy of the meeting notice as published and a notarized statement from the facility owner or operator stating that the meeting was held and stating the meeting date and location. (e) Registration application. The applicant shall submit an application as follows: (1) Number of copies. Registrants shall submit four copies of the completed application for registration. (2) Application. Part I of the application shall be in accordance with sec.330.52 of this title (relating to Technical Requirements of Part I of the Application). This part includes all items required by sec.330.45 of this title (relating to Contents of Application for Permit) and sec.sec.330.51-330.52 of this title (relating to Permit Procedures). The applicant should consult with the executive director to confirm the applicability of specific requirements. With regard to the submission of the Land Ownership Maps and a Land Ownership List with Part I of the application, upon request by the applicant, the executive director may waive these requirements if they are deemed unnecessary. This letter of request should be included with the application. The remaining parts of the application must be submitted in the form of an engineering plan signed and sealed in accordance with the Texas Engineering Practice Act. (3) Air quality information. All information necessary to complete the Air Quality Review as prescribed by the TNRCC shall be submitted and approved by the executive director prior to receipt of approval of the registration. (4) Plans and cross-sections. On a large-scale plan drawing of the site, the applicant shall show the following information: (A) Site boundaries (show permit boundaries and/or boundaries and dimensions of tract or land or closed municipal solid waste landfill unit on which the gas recovery system is to be developed). (B) General Plan layout of extraction system and well locations (identify all underground utility easements, limits of waste placement, final contours of facility). (C) A plan layout showing landfill gas treatment, gas compression, electrical power generation equipment, and any other beneficial gas-use equipment, and indicating limits of waste placement, additional easements required, and existing underground and overhead utility easements. (D) Streets and roads to provide ingress and egress to the processing facility. (E) Typical cross sections of final cover with gas extraction system and wells. (F) Typical details of well placement and manifold placement in conjunction with the final cover system. (G) Provisions for control of drainage or related items concerning the final contours of the municipal solid waste unit or facility and any appurtenant drainage features that may result incidental to the constructions of a processing unit and/or fixed structure. (H) Provisions to assure the integrity of the liner. (I) For enclosed structures, provisions for fire control facilities (fire hydrants, fire extinguisher, water tanks, and water well), continuous methane monitoring, and explosion-proof fixtures. (J) A discussion of the proposed method for condensate disposal. (5) Safety plans. The applicant shall provide written plans for personnel safety and contingency during the design, construction, and operation of the entire gas recovery system. (6) Recovery system operating plan. The applicant shall provide a written plan for the operation of the entire gas recovery system. The plan shall include, but not necessarily be limited to, the following: (A) Information necessary to demonstrate that the integrity of the final cover system will not be damaged as a result of the installation of the recovery system; (B) Routine operational procedures for the entire gas recovery system; (C) Emergency and contingency procedures for personnel and equipment; (D) Startup procedures, shutdown, and closure procedures; (E) Monitoring and maintenance procedures; and (F) Post-closure care plan for the gas recovery system. The applicant shall provide a post-closure care plan that discusses operational procedures for the extraction and processing system once the municipal solid waste facility is undergoing post-closure care pursuant to sec.330.254 of this title (relating to Post-Closure Care). (7) System descriptive data. The applicant shall provide the following: (A) an estimation of average daily gas production. (B) an estimation of the design daily gas production. (C) a description of the process unit. (D) list of monitoring and maintenance procedures. (8) Evidence of financial assurance. Municipal solid waste landfill facilities are subject to the Subchapter K requirements of sec.330.9 of this title (relating to Financial Assurance). (9) Requirements of statements and certification. The applicant shall include the following statements and/or applicable signatures. (A) Statement of applicant. (Figure 1: 30 TAC 330.70(e)(9)(A).) (B) Engineer's certification. (Figure 2: 30 TAC 330.70(e)(9)(B).) (f) Motion for reconsideration. (1) The applicant or a person affected may file with the chief clerk a motion for reconsideration of the executive director's final approval of an application. (2) A motion for reconsideration must be filed with the chief clerk not later than the 20th day after the date on which the chief clerk mailed the applicant the signed registration. In addition to a specific motion for reconsideration, the commissioners shall consider as a motion for reconsideration any objection, protest, or request for hearing filed with the chief clerk not later than the 20th day after the date on which the chief clerk mailed to the applicant the signed registration. (3) A decision by the executive director, including a registration issued by the executive director, is not affected by the filing of a motion for reconsideration under this section unless expressly so ordered by the commissioners. If a motion for reconsideration is not acted on by the commissioners within 45 days after the date on which the chief clerk mailed signed registration to the applicant, the motion shall be deemed overruled. When a motion for reconsideration is overruled by commission action or pursuant to this subsection, the Texas Government Code, sec.2001.146, regarding motions for rehearing for contested cases is inapplicable and no motions for rehearing shall be filed. To the extent applicable, the commission decision may be subject to judicial review pursuant to the Texas Water Code, sec.5.351 or the Texas Health and Safety Code, sec.361.321. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on November 20, 1995. TRD-9515043 Kevin McCalla Director, Legal Division Texas Natural Resource Conservation Commission Effective date: December 11, 1995 Proposal publication date: August 29, 1995 For further information, please call: (512) 239-6087 TITLE 37. PUBLIC SAFETY AND CORRECTIONS Part VI. Texas Department of Criminal Justice Chapter 152. Institutional Division Subchapter A. Prison Admissions 37 TAC sec.152.2, sec.152.3 The Texas Department of Criminal Justice (TDCJ) adopts the repeal of sec.152.2 and sec.152.3, concerning the allocation among counties of the number of Institutional Division admissions available and the allocation of admissions to TDCJ Institutional Division, without changes to the proposed text as published in the September 26, 1995, issue of the Texas Register (20 TexReg 7820). The repeals are necessary due to the new scheduled admissions policy proposed under new sec.152.1, in accordance with Texas Government Code, sec.499. 071, and the need to remove obsolete language. The repeals will remove obsolete language enabling the implementation of new language required by Texas Government Code, sec.499.071. No comments were received regarding adoption of the repeals. The repeals are adopted under the Government Code, sec.492.013, which grants general rulemaking authority to the Board, and sec.499.071 (as amended by the 74th Legislature, Regular Session). This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on November 20, 1995. TRD-9515018 Carl Reynolds General Counsel Texas Department of Criminal Justice Effective date: December 11, 1995 Proposal publication date: September 26, 1995 For further information, please call: (512) 463-9693 Chapter 163. Community Justice Assistance Division Standards 37 TAC sec.163.34 The Texas Department of Criminal Justice adopts new sec.163.34, concerning community supervision officers carrying weapons, without changes to the proposed text as published in the September 26, 1995, issue of the Texas Register (20 TexReg 7820). The new section is needed in order to address the issue of community supervision officers carrying handguns after the enactment of Article 4413(29ee), Revised Statutes. The new section will clarify authority that has been in question since the passage of Senate Bill 60, Article 4413(29ee), Revised Statutes. One individual commented against the new section and argued that officers are exposed to dangerous felons and should be allowed to carry handguns. In addition, the Community Justice Assistance Division and the Judicial Advisory Council examined this issue in detail and conducted a survey of community corrections professionals -judges, directors of community supervision and corrections departments, and community supervision officers. The results of the survey, in summary, are: (1) 78% of respondents believe that community supervision officers should be authorized to carry concealed handguns while conducting work-related duties; (2) 78% of respondents believe that officers should not be mandated to carry handguns; and (3) 84% of respondents believe that legal authority to carry handguns should be in special legislation, as opposed to the Concealed Weapons Law, Article 4413 (29ee), Revised Statutes. The agency has reviewed the comment and survey results received and determined that the original proposal should be adopted, based on the advice of the Judicial Advisory Council to the Board, which studied the issue extensively. This conclusion is reinforced by the survey results, indicating an 84% majority of community corrections professionals who believe that special legislation should address this issue, and such legislation has not been passed. The new section is adopted under the Government Code, sec.492.013, which grants general rulemaking authority to the Board and Code of Criminal Procedure, Article 42.13 (Codified as of September 1, 1995, as Chapter 509, Government Code). This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on November 20, 1995. TRD-9515017 Carl Reynolds General Counsel Texas Department of Criminal Justice Effective date: December 11, 1995 Proposal publication date: September 26, 1995 For further information, please call: (512) 463-9693 TITLE 40. SOCIAL SERVICES AND ASSISTANCE Part I. Texas Department of Human Services Chapter 19. Nursing Facility Requirements for Licensure and Medicaid Certification Subchapter Z. Preadmission Screening and Annual Resident Review (PASARR) 40 TAC sec.19.2500 The Texas Department of Human Services (DHS) adopts an amendment to sec.19. 2500, without changes to the proposed text as published in the June 9, 1995, issue of the Texas Register (20 TexReg 4206). The justification for the amendment is to ensure that individuals, who may lack capacity, have a surrogate decision maker or legal guardian to assist them in making decisions about their nursing facility stay. The amendment will function by addressing the evaluation of an individual's capacity to understand and meaningfully participate in decisions about his nursing facility stay, receive specialized services, and/or initiate appeals. For persons where capacity is in question and no surrogate decision maker or legal guardian is identified, the department will make a referral to the court for the assignment of a legal guardian. The department received no comments regarding adoption of the amendment. The amendment is adopted under the Health and Safety Code, Chapter 242, which provides the department with the authority to regulate long-term care nursing facilities; the Human Resources Code, Title 2, Chapters 22 and 32, which authorizes the department to administer public and medical assistance programs; and under Texas Civil Statutes, Article 4413(502), sec.16, which provide the Health and Human Services Commission with the authority to administer federal medical assistance funds. The amendment implements the Health and Safety Code, sec. sec.242.001-242.186, and the Human Resources Code, sec.sec.22.001-22.024 and sec.sec.32.001-32.042. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on November 16, 1995. TRD-9514923 Nancy Murphy Section Manager, Media and Policy Services Texas Department of Human Services Effective date: December 7, 1995 Proposal publication date: June 9, 1995 For further information, please call: (512) 438-3765 Texas Department of Insurance Exempt Filing Notification Pursuant to the Insurance Code, Chapter 5, Subchapter L (Editor's Note: As required by the Insurance Code, Article 5.96 and 5. 97, the Texas Register publishes notices of actions taken by the Department of Insurance pursuant to Chapter 5, Subchapter L, of the Code. Board action taken under these articles is not subject to the Administrative Procedure Act. These actions become effective 15 days after the date of publication or on a later specified date. The text of the material being adopted will not be published, but may be examined in the offices of the Department of Insurance, 333 Guadalupe, Austin.) The Commissioner of Insurance, at a public hearing held on November 9, 1995, at 1:30 p.m., under Docket Number 2183, in Room 100 of the Texas Department of Insurance Building, 333 Guadalupe Street in Austin, Texas, adopted amendatory mandatory endorsements to residential property insurance policies and amendments to the Texas Personal Lines Manual to provide that a claim that is filed under a residential property policy but is not paid or payable under the policy cannot be counted for purposes of premium surcharges or refusal to renew under Article 21.49-2B, sec.7 of the Insurance Code. The endorsements and Manual rule amendments were proposed by Department staff in a petition filed on September 20, 1995 (Reference Number P-0995-35-I). Notice was published in the September 29, 1995, issue of the Texas Register (20 TexReg 8014 and 7969) The Commissioner adopted the amendatory mandatory endorsements and Manual rule amendments without any changes to the proposal as published. The adopted endorsements and the policies to which these endorsements must be attached are: (1) Endorsement HO-197 to be attached to all Texas Homeowner's Policies, (2) Endorsement Number TDP-097 to be attached to Texas Dwelling Forms 1 and 2, (3) Endorsement Number TDP-098 to be attached to Texas Dwelling Form 3, (4) Endorsement Number FRO-497 to be attached to all Texas Farm and Ranch Owner's Policies, (5) Endorsement Number TFR-097 to be attached to Texas Farm and Ranch Forms 1 and 2, and (6) Endorsement Number TFR-098 to be attached to Texas Farm and Ranch Form 3. The Commissioner adopted amendments to four Manual rules relating to permissibility of premium surcharges for number of claims filed: (1) Rule IV-C-6-A in the Homeowner's Section, (2) Rule IV-M-1 in the Dwelling Section, (3) Rule IV-C-2-A in the Farm and Ranch Owner's Section, and (4) Rule IV-O-1 in the Farm and Ranch Section. The Commissioner also adopted amendments to four Manual rules relating to refusal to renew due to losses: (1) Rule V-G in the Homeowner's Section, (2) Rule V-J in the Dwelling Section, (3) Rule V-F in the Farm and Ranch Owner's Section, and (4) Rule V-J in the Farm and Ranch Section. Article 21.49-2B, sec.7 of the Insurance Code provides that insurers may assess a premium surcharge in certain instances, including at the time a policy is renewed if the insured has filed two or more claims in the preceding policy year and if an insurer renews a policy of an insured who has filed three or more claims under the policy in a three-year period. Article 21.49-2B, sec.7 also provides that an insurer may decline to renew a policy if the insured has filed three or more claims under the policy in any three-year period and that an insurer may notify an insured who has filed two claims in a period of less than three years that the insurer may decline to renew the policy if the insured files a third claim during the three-year period. House Bill 46 enacted by the 74th Texas Legislature (Acts 1995, 74th Legislature, page 4402, Chapter 888, sec.1, effective September 1, 1995) amended Article 21.49-2B, sec.7(a) to provide that a claim that is filed under a residential property policy but is not paid or payable under the policy cannot be counted for purposes of premium surcharges or refusal to renew under Article 21.49-2B, sec.7. This legislation applies only to those claims filed with the insurer on or after September 1, 1995. House Bill 46 was enacted by the legislature because of the practice of some insurers in Texas to count as claims, for purposes of premium surcharges or refusal to renew under Article 21.49-2B, sec.7 of the Insurance Code, situations of residential property losses less than the insured's deductible that result in no losses being paid by the insurer and simple inquiries by policyholders to agents or insurers about possible residential property losses which also do not result in any losses being paid by the insurer. The Commissioner has determined that the amendatory mandatory endorsements and Manual rule amendments are necessary because of the passage of House Bill 46. While the statutory prohibition enacted in House Bill 46 is not required by Article 21.49-2B, sec.7 to be included in the residential property insurance policy forms, the Commissioner has determined that such inclusion is necessary to provide policyholders with notice of the prohibition. Although the statutory prohibition enacted in House Bill 46 applies to all residential property insurance claims filed with the insurer on or after September 1, 1995, the Commissioner has determined that the new endorsements and Manual rules are to become effective for all residential property insurance policies issued or renewed on or after January 1, 1996. The Commissioner has jurisdiction of this matter pursuant to the Insurance Code, Articles 21.49-2B, 5.35, and 5.96. The endorsements and rule amendments as adopted by the Commissioner of Insurance are on file in the Chief Clerk's Office of the Texas Department of Insurance under Reference Number P-0995-35-I and are incorporated by reference by Commissioner Order Number 95-1217. This notification is made pursuant to the Insurance Code, Article 5.96, which exempts action taken under Article 5.96 from the requirements of the Administrative Procedure Act (Government Code, Title 10, Chapter 2001). Consistent with the Insurance Code, Article 5.96(h), prior to the effective date of this action, the Texas Department of Insurance will notify all insurers affected by this action. IT IS THEREFORE THE ORDER of the Commissioner of Insurance that Endorsement HO- 197 to be attached to all Texas Homeowner's Policies, Endorsement Number TDP-097 to be attached to Texas Dwelling Forms 1 and 2, Endorsement Number TDP-098 to be attached to Texas Dwelling Form 3, and Endorsement Number FRO-497 to be attached to all Texas Farm and Ranch Owner's Policies, Endorsement Number TFR-097 to be attached to Texas Farm and Ranch Forms 1 and 2, and Endorsement Number TFR-098 to be attached to Texas Farm and Ranch Form 3, as specified herein and which are attached to this Order and incorporated into this Order by reference, are adopted. IT IS FURTHER ORDERED that amendments to Texas Personal Lines Manual Rule IV-C-6-A in the Homeowner's Section, Rule IV-M-1 in the Dwelling Section, Rule IV-C-2-A in the Farm and Ranch Owner's Section, and Rule IV-O-1 in the Farm and Ranch Section, relating to permissibility of premium surcharges for number of claims filed, as specified herein and which are attached to this Order and incorporated into this Order, are adopted. IT IS FURTHER ORDERED that amendments to Texas Personal Lines Manual Rule V-G in the Homeowner's Section, Rule V-J in the Dwelling Section, Rule V-F in the Farm and Ranch Owner's Section, and Rule V-J in the Farm and Ranch Section, relating to refusal to renew due to losses, as specified herein and which are attached to this Order and incorporated into this Order, are adopted. IT IS FURTHER ORDERED that these endorsements and rule amendments shall become effective for all residential property insurance policies issued or renewed on or after January 1, 1996. This agency hereby certifies that the adopted endorsements and Manual rule amendments have been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on November 20, 1995. TRD-9515047 Alicia M. Fechtel General Counsel and Chief Clerk Texas Department of Insurance Effective date: January 1, 1996 For further information, please call: (512) 463-6327