Part I.
Texas Department of Insurance
Chapter 3.
Life, Accident and Health Insurance and Annuities
Subchapter X. Preferred Provider Plans
28 TAC §§3.3701-3.3706
The Commissioner of Insurance adopts amendments to §§3.3701
- 3.3704, and new §§3.3705 and 3.3706, concerning preferred provider
plans. Sections 3.3702, 3.3703, 3.3704, and 3.3706 are adopted with changes
to the proposed text as published in the January 8, 1999 issue of the
The amendments and new sections implement legislation enacted by the 75th
Legislature in Senate Bill 383 which amends Chapter 3, Subchapter G of the
Insurance Code by adding Article 3.70-3C (Preferred Provider Benefit Plans),
House Bill 2846 which amends Chapter 3, Subchapter G of the Insurance Code
by adding Article 3.70-3C (Use of Advanced Practice Nurses and Physician Assistants
by Preferred Provider Benefit Plans), and Senate Bill 786 which amends Insurance
Code, Chapter 21, Subchapter E by adding Article 21.53K concerning the provisions
of services related to immunizations and vaccinations under managed care plans.
The amendments and new sections restructure the existing rules, §§3.3701-3.3705,
by moving some of the existing rules and incorporating them into other sections,
altering the language of the rules to comply with the legislative enactments,
and reorganizing the rules into individual sections relating to specific components
of a preferred provider benefit plan, thus rendering the rules better organized
and easier to read.
The amendments to §3.3701 add advanced practice nurses and physician
assistants as preferred providers and indicate that Articles 3.70-3C (Preferred
Provider Benefit Plans), 3.70-3C (Use of Advanced Practice Nurses and Physician
Assistants by Preferred Provider Benefit Plans) and 21.53K, which concerns
the provisions of services related to immunizations and vaccinations under
managed care plans, are now applicable to the provisions of Subchapter X of
Chapter 28 of the Texas Administrative Code.
The amendments to §3.3702 redefine the words and terms used in the
subchapter to comply with amendments made to Chapter 3 of the Insurance Code
by the 75th Legislature and eliminate definitions that are no longer necessary.
The amendments to §3.3703 consolidate the contracting requirements between
insurers and physicians and health care providers, contained in the existing
rules, which were not affected by the enactment of Insurance Code Article
3.70-3C (Preferred Provider Benefit Plans) and which are distributed throughout
several sections of the existing rules. The amendments to §3.3703 include
additional contracting provisions required by Article 3.70-3C (Preferred Provider
Benefit Plans) and two provisions required by Insurance Code Article 21.53K
which concern written protocols for immunizations or vaccinations to be administered
by a pharmacist. The amendments to §3.3704 consolidate the existing rules
relating to an insured's freedom of choice in the selection of providers,
add additional requirements required by Article 3.70-3C (Preferred Provider
Benefit Plans), and delete provisions concerning coverage information which
are now set forth in new §3.3705.
New §3.3705 sets forth readability and mandatory disclosure requirements
for preferred provider benefit plans issued pursuant to Sec. 6 of Article
3.70-3C (Preferred Provider Benefit Plans). New §3.3706 sets forth procedures
by which physicians and practitioners shall be notified of an insurer's sponsorship
of a preferred provider benefit plan, how application for designation as a
preferred provider can be made, notification requirements to providers upon
disapproval of an application for designation as a preferred provider, notification
requirements to a provider upon termination by an insurer from a plan as a
preferred provider, and mandatory review procedures available whenever a physician
or health care practitioner is not designated as a preferred provider or is
terminated from a plan by an insurer.
In addition, §3.3706(d) and (e) create expedited and standard versions
of the review processes required by statute. It should be noted that the review
process is already required by the existing rules. The changes alter the time
schedule for the review process. The rules add an expedited review process
at §3.3706(e) which a physician or health care practitioner can access
by the delivery of all relevant material pertaining to the review to the insurer
within ten business days of receipt of notice of an insurer's intent to terminate
him or her as a preferred provider. The insurer is then required to render
a decision within thirty calendar days. The standard process, set forth in
§3.3706(d), allows the physician or practitioner twenty calendar days
in which to submit materials pertaining to the review and the insurer sixty
calendar days within which to render a decision.
After receiving public comments on the proposed amendments and new sections
to Chapter 3, Subchapter X, the department has made changes based upon the
public comments, as well as for clarification, punctuation, and consistency.
The following revisions to the referenced sections were made: A conforming
change was made to §3.3702(15). Changes were made to §3.3703(a)(8),
(a)(10), (a)(12), (a)(13), (a)(14), (a)(15), (a)(18), and (a)(19) for purposes
of consistency and clarification. Section 3.3703(a)(11) was reworded to track
only the portion of Article 3.70-3C(3)(m) that refers to provider contracts.
Proposed §3.3703(b) was deleted entirely and the subsequent subsections
were renumbered. A change was made to §3.3704(a)(11) for clarification.
The word "advisory" was added before "review panel" throughout all of §3.3706.
Changes were made for purposes of clarification and consistency in §3.3706(a)(2),
(a)(4), and (e)(2). In §3.3706(a)(3), the words "health care" were deleted
and the phrase "requirements, including the use of economic profiling by the
insurer, used by the insurer to admit a provider to the plan" was substituted
for "requirements for participation as a provider in the plan". "Reasons"
was changed to "reason(s)" in §3.3706(b)(1)(A) and (c)(1) in response
to a comment. Finally, in §3.3706(b)(2)(A), the phrase "in the applicable
service area" was added between "practitioners" and "contracting."
General: A commenter stated that the proposed rules create new contract
provisions that are not contained in current contracts and not required by
Article 3.70-3C (Preferred Provider Benefit Plans). [Hereinafter referred
to throughout this section of the preamble as Article 3.70-3C or statute.]
The commenter proposed that the rules should contain an effective date of
at least 60 days after adoption and a "grandfathering" of all existing contracts
to avoid the necessity and expense of restating and re-executing existing
contracts.
Agency Response: The department does not agree that the rules create contract
provisions not required by Article 3.70-3C. All provisions track the language
and requirements of the statute. Senate Bill 383 of the 75th Legislature at
Section 2 provides that the requirements of Article 3.70-3C as added by Section
1 of the bill apply to any insurance policy or contract issued, delivered,
or renewed on or after the effective date of the Act. The effective date of
the Act was June 19, 1997 and contracts issued after that date are subject
to the statute, notwithstanding the provisions of the rules. Therefore, the
department cannot change the effective date or grandfather existing contracts
from application of the rules.
§3.3701(a): A commenter disagreed with the language indicating that
the rules do not apply to dental care benefits as well as the department's
interpretation that the Insurance Code prohibits preferred provider dental
benefit plans. The commenter believes that Articles 21.53(1)(a) and 21.53(2)(b)
allow for contracting and non-contracting providers under a plan providing
dental care benefits. The commenter requests that the rules be clarified to
allow dental preferred provider benefit plans.
Agency response. The department disagrees. Article 3.70-3C(2) specifically
states that "this article does not apply to provisions for dental care benefits
in any health insurance policy." In addition, Article 21.53(3)(b) of the Insurance
Code prohibits a health insurance policy or employee benefit plan from providing
a different level of reimbursement for preferred providers.
§3.3703(a)(3): A commenter suggested deletion of the phrase "a significant
portion" because the commenter interprets the rule to require a provider to
have a significant portion of practice at a facility before being granted
staff privileges.
Agency response: The department disagrees with the commenter's interpretation
of this subsection. The subsection applies to providers who have a significant
portion of their practice located in a hospital or institutional provider
setting. It does not purport to affect the eligibility of a particular provider
for staff privileges at a facility. The department also notes that this provision
was in the rules prior to the enactment of Article 3.70-3C by the 75th Legislature.
§3.3703(a)(5): A commenter suggested adding language to clarify that
an insured may agree in advance to pay a provider out of pocket for care for
which the insurer has declined to provide coverage and that an insurer may
make an initial determination of medical necessity dependent upon a subsequent
review by a physician or practitioner panel.
Agency response: The department has not added the suggested language because
this section relates only to terms included in contracts between an insurer
and a preferred provider. The department agrees that the rules do not affect
an insurer's ability to require that all initial determinations of medical
necessity made concerning services provided pursuant to a plan be supported
by a subsequent review by a physician or practitioner panel. The department
also agrees that these rules would not prohibit an insured and a provider
from agreeing in advance that the insured will pay the provider for services
that the insured has requested but for which the insurer subsequently declines
to provide coverage. However, the department notes that there may be other
rules or provisions of the Insurance Code that would restrict such an agreement.
§3.3703(a)(6)(A): A commenter suggested that referrals be limited
only to other preferred providers.
Agency Response: The department disagrees. The statute ensures an individual
insured's freedom of choice, which includes the right to choose out-of-network
providers, so long as the insured is willing to pay the additional cost for
services obtained from these out-of-network providers.
Comment: Another commenter suggested that the rules should prohibit a contract
from containing "any restriction on physicians and practitioners who may refer
an insured to another physician or practitioner."
Agency Response: The department disagrees. The subsection prohibits an
insurer from prohibiting physicians of a particular subspecialty or practitioners
of a particular type from referring insureds to other physicians or practitioners,
while permitting physicians of other subspecialties or other types of practitioners
to make such referrals. The commenter's language would prohibit an insurer
from placing any limitations at all upon providers with regard to referrals.
§3.3703(a)(7): A commenter noted that there is no mention of capitation
and suggests language permitting the use of capitation, per diems, and diagnostic
related groups as reimbursement for preferred providers.
Agency Response: The department declines to adopt this proposed change
at this time. The department believes that the capitation language in Article
3.70-3C(7)(d) was inadvertently carried over from the codification of the
HMO patient protection rules passed by the 75th Legislature in SB 385 without
intending to extend this type of payment arrangement to all preferred provider
plans. Capitation is not a normal business practice among insurers and could
implicate licensing under Chapter 20A of the Insurance Code. This issue was
not addressed in the proposed rules and the addition of language relating
to capitation as requested at this time could constitute a substantive change
from the proposed rules.
Comment: Another commenter believed that the second sentence of this subsection
contradicts the first and should be deleted. The commenter also noted that
under the HMO law, the department reviews incentives on a case-by-case basis,
disallowing incentives that act to restrict patient access to medically necessary
services, while this subsection sanctions an entire class of incentives.
Agency Response: The department disagrees that these sentences are contradictory.
The subsection permits an insurer to encourage effective utilization of health
services that does not restrict or limit medically necessary services. The
department also notes that both the prohibition against the use of financial
incentives to limit medically necessary services and the language permitting
providers to share in savings from cost effective utilization of health services
were contained in the rules prior to the enactment of Article 3.70-3C by the
75th Legislature.
§3.3703(a)(11): A commenter proposed that the reference to Article
3.70-3C(3)(m) be deleted from the rule and that the language be re-worked
to track only the portion of the article relating to provider contracts.
Agency Response: The department agrees and has reworded §3.3703(a)(11)
to directly track the relevant portion of Article 3.70-3C(3)(m) that refers
to provider contracts.
§3.3703(a)(14), (a)(15), (a)(17) and (a)(18): A commenter believed
that these paragraphs should be deleted because, while the statute addresses
them, it does not specifically require that provisions concerning these matters
be placed in a contract between an insurer and a provider.
Agency Response: The department disagrees. Article 3.70-3C and the rules
implementing the statute set out the respective rights of insurers who are
subject to Article 3.70-3C and the providers who contract with these insurers
as preferred providers. Inclusion of these required terms in the contracts
entered into between insurers and preferred providers ensures that both parties
are aware of their respective rights and responsibilities under the statute
and rules.
§3.3703(a)(16): A commenter believed there is no legislative requirement
for this provision and it should be deleted.
Agency Response: The department disagrees. Article 21.53K applies to all
insurers as defined in Article 3.70-3C. The department has the authority to
require that all insurers contracting with providers under the article comply
with Article 21.53K.
§3.3703(b): A commenter believed that this subsection is duplicative
of the requirements of (3.3703(a) and should be deleted.
Agency Response: The department agrees and has deleted this subsection
and renumbered the remaining subsections.
§3.3704(a)(6): A commenter suggested that this paragraph lacks statutory
authority and proposes elimination of the term "basic level of benefits" as
it is not mentioned in the statute. The commenter proposes that this paragraph
read "the difference in coinsurance for services rendered by preferred provider
and a nonpreferred provider cannot exceed 30 percent."
Agency Response: The department disagrees. Article 3.70-3C(2) states that
the statute applies to any plan where the insurer provides for 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." Article
3.70-3C(8)(a) requires insurers to ensure that "both preferred provider benefits
and basic level benefits" are available to insureds within a service area.
The department established by this rule, prior to the enactment of Senate
Bill 383 by the 75th Legislature, that the differential between the basic
level of benefits and benefits provided through preferred providers cannot
exceed 30%. The purpose of the rule, as originally written, was to allow insureds
to retain meaningful freedom of choice when selecting amongst health care
providers. This portion of the rules is unaffected by the enactment of this
legislation.
§3.3704(a)(7) and (a)(8): A commenter, believing there to be no statutory
authority for these provisions, recommended deletion of paragraphs (a)(7)
and (a)(8).
Agency Response: The department disagrees. Article 3.70-3C(3)(a) indicates
that health insurance policies that include benefits that differ from the
basic level of coverage are permitted only if the policies meet the requirements
set forth in Article 3.70-3C(3). Otherwise, such polices could be considered
unjust under Article 3.42, unfair discrimination under Articles 21.21-6 and
21.21-8, and in violation of Articles 3.70-2 and 21.52 of the Insurance Code.
Article 3.70-3C(8) requires an insurer offering a benefit plan under Article
3.70-3C to ensure that both preferred provider benefits and basic level benefits
are reasonably available to all insureds within a designated service area.
These paragraphs implement these sections of Article 3.70-3C and ensure that
insureds retain meaningful freedom of choice when selecting amongst health
care providers.
§3.3704(a)(10): A commenter believed that out-of-network services
create problem for patients regarding provider billing and suggests the following
addition: "Nothing contained in this section requires reimbursement based
upon the billed charge of the provider."
Agency Response: The department disagrees that the suggested language is
necessary but notes that the commenter is correct in that the rule does not
require an insurer to reimburse a provider on any basis other than the benefits
provided by the plan to the insured.
§3.3704(a)(11): A commenter suggested the term "referral" be defined
and questions whether this provision authorizes a gatekeeper.
Agency Response: The department disagrees with the suggestion that "referral"
requires definition. Nothing in the statute or rules authorizes the use of
a "gatekeeper" in a preferred provider plan. Section 3.3704(a)(1) prohibits
a preferred provider benefit plan from requiring that a service be rendered
by a particular hospital, physician, or practitioner. "Referral" as used here
has its commonly understood meaning whereby a physician or practitioner recognizes
that another physician or practitioner should perform the type of treatment
or services required by the insured.
§3.3704(b): A commenter interpreted this subsection to require insureds
to comply with (3.3703(a)(11) with regard to nonpreferred providers. Section
3.3703(a)(11) states that the time period in which insurers must provide payment
to preferred providers will be controlled by the terms of the contract or,
if no such terms are specified, within 45 days of submission of the claim
by the provider. Since nonpreferred providers have no contract with the insurer,
the commenter believed that compliance with this rule would not be possible
and the commenter suggested that it be deleted.
Agency Response: The department disagrees with the commenter's interpretation
of this subsection. Section 3.3703 concerns terms that must be included in
contracts between insurers and preferred providers. Section 3.3704 concerns
issues affecting an insured's freedom of choice in selecting a provider. Subsection
(b) requires an insurer to use the same diligence in responding to claims
filed by nonpreferred providers as it uses in responding to claims filed by
preferred providers. It should be noted that insurers must comply with all
applicable laws and rules relating to payment of claims.
§3.3704(d): A commenter questioned the statutory authority for this
subsection. The commenter also posed numerous questions about interpretation
of the subsection.
Agency Response: The department notes that this provision has been in effect
since June 4, 1986 (see current 28 TAC §3.3704(13)), well before the
enactment of Article 3.70-3C by the 75th Legislature, and was not altered
or amended by the changes under consideration at this time. The statutory
authority for the provision was set forth at the time it was adopted in 1986.
If the commenter is so inclined, the department believes that it would be
more appropriate to address the various questions that the commenter has about
interpretation of the provision in a meeting rather than attempt to address
the questions in this adoption order, since the questions pertain to the adoption
in 1986 and interpretation of the provision since that time. The commenter
is encouraged to contact the department to set up a meeting to address its
concerns.
§3.3705(b)(12): A commenter requested that paragraph (12) be deleted
and that an insurer be required only to comply with §3.3705(f), which
requires providing to an enrollee, upon request, only the most current list
of preferred providers maintained by the insurer. The commenter also requested
that the list required by §3.3705(b)(12) be limited to a specific service
area.
Agency Response: The department disagrees. These two subsections serve
two different purposes and both are required by law. Section 3.3705(b)(12)
allows current and prospective contract holders and insureds to make meaningful
comparisons among different health plans and enables them to make informed
decisions in selecting a plan. Section 3.3705(f) allows insureds and prospective
insureds to make informed decisions when selecting from among the various
health care providers offering services as preferred providers under a specific
plan. The information under §3.3705(b)(12) is to be provided only upon
request. It is up to the requestor to specify the service area for which the
information is being requested. Nothing in the rule prohibits an insurer from
helping a requestor to narrow his or her request to a specific service area.
§3.3705(f): A commenter requested that this subsection be changed
to permit an insurer to post this information electronically on the Internet
rather than by publishing a directory and to allow an insurer to provide an
annual update to its prior directory or to print an annual update and reprint
its directory biannually. The commenter also questioned the source of authority
for the requirement that an insurer file a copy of its directory with the
department annually on June 1.
Agency Response: The department agrees that it would be useful for an insurer
to post this information on the Internet. However, publication and distribution
of a directory is required to ensure that enrollees and potential enrollees
who do not have access to the Internet can obtain this information. The requirement
that directories be updated annually and filed with the department on June
1st of each year was carried over from the original rules. In the November
15, 1995 Commissioner's Order adopting those rules, the department agreed
with comments "that a complete provider list sent quarterly to all enrollees
would be more costly than useful." The Order states that "In order to reduce
costs, the agency has rewritten the subsection to require the 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." The department believes that the annual publication requirement
for the provider list should be retained.
§3.3705(g): A commenter requested that this rule be changed to require
that a toll free number be provided for use only during the insurer's regular
business hours.
Agency Response: The department disagrees that such a change should be
made. The forty-hour per week requirement was carried over from the existing
rules. The department cannot control or define an insurer's regular business
hours.
§3.3706(a): A commenter suggested that the rule be changed to state
that required notice is adequate under the rules if it is published in a local
newspaper.
Agency Response: The department disagrees. This subsection requires that
notice of the opportunity to become a preferred provider be distributed by
publication, which would include a local newspaper, or in writing. The purpose
of the subsection is not to dictate how notice is conveyed to potential providers,
but to ensure that all potential preferred providers are made aware of the
opportunity to become a preferred provider in a uniform manner.
§3.3706(b): A commenter stated that there is no statutory provision
requiring a insurer to give reasons for denying a provider's request to become
a preferred provider or to appeal such a denial. The commenter remarked that
since an insurer could deny a request due to a sufficiency of current providers
there was no need to allow an appeal. The commenter also suggested that the
rule should be changed to allow an insurer to give "the specific reason(s)"
for the denial rather than "reasons" and that the word "advisory" be added
before the word "panel" throughout §3.3706(b).
Agency Response: The department disagrees with the commenter's first two
assertions. The process set forth in this subsection is authorized by Article
3.70-3C(b)(1), which requires that all qualified providers be afforded a fair,
reasonable, equivalent opportunity to become preferred providers and prohibits
an insurer from unreasonably withholding designation as a preferred provider.
The rules implement the statute by requiring the insurer to articulate a reason
for the denial that indicates that designation as a preferred provider was
not unreasonably denied. Another purpose for this requirement is to allow
a physician or practitioner to decide whether to request a review. Article
3.70-3C(3)(b)(2) states that a physician or practitioner whose request to
become a preferred provider is denied by an insurer must be provided with
"a reasonable review mechanism that incorporates, in an advisory role only,
a review panel." The statute does not withhold this requirement if the denial
is based on sufficiency. Presumably, a provider notified that sufficiency
was the reason for denial would not request a review. The department does
agree with the commenter's suggestion about wording changes and has made them.
§3.3706(c): A commenter suggested changing "impairs" to "effectively
impairs" and requests guidance as to what is meant by "imminent harm" and
"effectively impairs." The commenter noted that it would seem that a license
which has been revoked, probated, or suspended should automatically be deemed
impaired and proposes the addition of a new paragraph (3): "In the event a
physician or practitioner has their license to practice revoked, impaired,
suspended, probated, are reprimanded, or involuntarily lose staff privileges,
such action is or deemed to involve imminent harm to a patient."
Agency Response: The department declines to define these terms, as it would
not be possible to delineate every action that a provider could commit which
would constitute imminent harm or effective impairment for purposes of this
rule. The department also declines to adopt the commenter's suggested language.
The limitations spelled out in the suggested language, other than suspension
of hospital privileges, are already covered in §3.3706(c)(2)(B), which
states that a physician or practitioner need not be given an opportunity to
appeal termination as a preferred provider in cases involving "an action by
a state medical or other physician licensing board or other government agency
which impairs the physician's or practitioner's ability to practice medicine
or to provide services." The department does not believe that "involuntary
suspension of hospital privileges" can be automatically assumed to constitute
proof of impairment that would justify termination as a preferred provider
without allowing the provider the opportunity to appeal the decision.
§3.3706(d) and (e): A commenter noted that the termination requirements
in these subsections do not set forth an exception for voluntary withdrawal
or termination by a provider, and suggested that appeal rights be specifically
restricted in the rule to involuntary withdrawals and termination.
Agency Response: The department does not agree that this is necessary.
Review is available to a physician or practitioner under §§3.3706(d)
and 3.3706(e) only from notification of an insurer's decision to terminate
the physician or practitioner.
Comment: A commenter requested guidance on expedited versus standard review.
Agency Response: Neither the statute nor the rules restrict a physician
or practitioner's ability to seek expedited review. The rules place the burden
upon the physician or practitioner requesting expedited review to provide
the insurer, within ten business days of receipt of notification of termination
from the insurer, any relevant documentation that the provider wishes the
advisory review panel and insurer to consider. The department feels that the
provider is in the best position to determine whether this requirement can
be met.
§3.3706(f): A commenter stated that it can find no legislative enactment
supporting this subsection regarding confidentiality and suggests that if
the rule is designed to prevent a practitioner from learning about the complaint,
this should be specifically stated.
Agency Response: The department believes that it addressed this matter
in its preamble proposing these rules where it stated: "Subsection (f) of
proposed §3.3706 requires an insurer to maintain confidentiality of patient
identity and records involved in a review requested by a provider under this
subsection. State law already mandates that an insurer maintain confidentiality
of all patient identities and records. The new section clarifies that the
already existing confidentiality requirements apply to the review processes
as well." (Proposed Rules, January 8, 1999, Texas Register, 24 TexReg 234
at 235.)
§3.3706(g)(1): A commenter suggested that this rule be revised because
it prohibits advance notice of termination until the actual date of termination
even if all appeals available to the provider have been exhausted. The commenter
believes this could cause an insured to be billed at a nonpreferred rate if
the insured unknowingly continues to seek services from a provider who has
been terminated as a preferred provider.
Agency Response: The department disagrees with the commenter's interpretation
of paragraph (1). With the exception of providers who are not entitled to
an appeal, a physician or practitioner who has been notified of an insurer's
intention to terminate him or her but has not exhausted all appeals is still
a preferred provider. An insurer could not charge an insured a nonpreferred
rate unless the insured continued to seek services after being notified that
the provider was no longer a preferred provider.
For, with changes: BlueCross BlueShield of Texas, Fortis Benefits Insurance
Company, Office of Public Insurance Counsel, and Texas Association of Life
Health Insurers.
The amendments and new sections are adopted under the Insurance
Code, Chapter 3, Subchapter G, as enacted by the 75th Legislature in Senate
Bill 383 and House Bill 2846, Chapter 21, Subchapter E, as amended by the
75th Legislature in Senate Bill 786, and Article 1.03A. Insurance Code Article
3.70-3C (Preferred Provider Benefit Plans), Section 9, provides that the commissioner
shall adopt rules and regulations as necessary to implement the provisions
of this article and to ensure reasonable accessibility and availability of
preferred provider and basic level benefits to Texas citizens. Insurance Code
Article 1.03A provides that the Commissioner of Insurance may adopt rules
necessary for the conduct and execution of the duties and functions of the
Texas Department of Insurance only as authorized by a statute.
§3.3702.Definitions.
The following words and terms, when used in this subchapter, have the
following meanings, unless the context clearly indicates otherwise.
(1)
Contract holder -- An individual who holds an individual
health insurance policy, or an organization which holds a group health insurance
policy.
(2)
Emergency care -- As defined in Insurance Code Article
3.70-3C §1(1) (Preferred Provider Benefit Plans).
(3)
Health care provider or provider -- As defined in
Insurance Code Article 3.70-3C §1(3) (Preferred Provider Benefit Plans).
(4)
Health insurance policy -- As defined in Insurance
Code Article 3.70- 3C §1(2) (Preferred Provider Benefit Plans).
(5)
Health Maintenance Organization (HMO) -- As defined
in Insurance Code Article 20A.02(n).
(6)
Hospital -- As defined in Insurance Code Article 3.70-3C
§1(4) (Preferred Provider Benefit Plans).
(7)
Institutional provider -- As defined in Insurance
Code Article 3.70-3C §1(5) (Preferred Provider Benefit Plans).
(8)
Insurer -- As defined in Insurance Code Article 3.70-3C
§1(6) (Preferred Provider Benefit Plans).
(9)
Physician -- As defined in Insurance Code Article
3.70-3C §1(8) (Preferred Provider Benefit Plans).
(10)
Practitioner -- As defined in Insurance Code Article
3.70-3C §1(9) (Preferred Provider Benefit Plans).
(11)
Preferred provider -- As defined in Insurance Code
Article 3.70-3C §1(1) (Use of Advanced Practice Nurses and Physician
Assistants by Preferred Provider Plans).
(12)
Preferred Provider Benefit Plan -- As defined in
Insurance Code Article 3.70-3C §1(2) (Use of Advanced Practice Nurses
and Physician Assistants by Preferred Provider Plans).
(13)
Prospective insured -- As defined in Insurance Code
Article 3.70-3C §1(11) (Preferred Provider Benefit Plans).
(14)
Quality assessment -- As defined in Insurance Code
Article 3.70-3C §1(12) (Preferred Provider Benefit Plans).
(15)
Service area -- As defined in Insurance Code Article
3.70-3C §1(13) (Preferred Provider Benefit Plans).
(16)
Utilization Review -- As defined in Insurance Code
Article 21.58A §2(20).
§3.3703.Contracting Requirements.
(a)
An insurer marketing a preferred provider benefit 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 plan in a manner that assures both availability
and accessibility of adequate personnel, specialty care, and facilities. Each
contract must meet the following requirements:
(1)
A contract between a preferred provider and an insurer
shall not restrict a physician or health care provider from contracting with
other insurers, preferred provider plans, preferred provider organizations,
or HMOs.
(2)
Any term or condition limiting participation on the
basis of quality, contained in a contract between a preferred provider and
an insurer, shall be consistent with established standards of care for the
profession.
(3)
In the case of physicians or practitioners with hospital
or institutional provider privileges who provide a significant portion of
care in a hospital or institutional provider setting, a contract between a
preferred provider and an insurer may contain terms and conditions which 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 contract may not provide that
the lack of hospital or institutional provider privileges may be a basis for
denial of participation as a preferred provider to such physicians or practitioners
of that class.
(4)
A contract between an insurer and a hospital or institutional
provider shall not, as a condition of staff membership or privileges, require
a physician or practitioner to enter into a preferred provider contract.
(5)
A contract between a preferred provider and an insurer
may provide that the preferred provider will not bill the insured for unnecessary
care, if a physician or practitioner panel has determined the care was unnecessary,
but the contract 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.
(6)
A contract between a preferred provider and an insurer
shall not:
(A)
contain restrictions on the classes of physicians and practitioners
who may refer an insured to another physician or practitioner; or
(B)
require a referring physician or practitioner to bear the
expenses of a 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.
(7)
A contract between a preferred provider and an
insurer shall not contain any financial incentives to a physician or a health
care provider which act directly or indirectly as an inducement to limit medically
necessary services. This subsection does not prohibit the savings from cost-effective
utilization of health services by contracting physicians or health care providers
from being shared with physicians or health care providers in the aggregate.
(8)
A contract between a physician, physicians' group,
or practitioner and an insurer shall have a mechanism for the resolution of
complaints initiated by an insured, a physician, physicians' group, or practitioner
which provides for reasonable due process including, in an advisory role only,
a review panel selected by the manner set forth in subsection (b)(2) of §3.3706
of this title (relating to Designation as a Preferred Provider, Decision to
Withhold Designation, Termination of a Preferred Provider, Review of Process).
(9)
A contract between a preferred provider and an insurer
shall not require any health care provider, physician, or physicians' group
to execute hold harmless clauses that shift an insurer's tort liability resulting
from acts or omissions of the insurer to the preferred provider.
(10)
A contract between a preferred provider and an insurer
shall require a preferred provider who is compensated by the insurer on a
discounted fee basis to agree to bill the insured only on the discounted fee
and not the full charge.
(11)
A contract between a preferred provider and an insurer
shall require payment to the provider for covered services that are rendered
to insureds:
(A)
within 45 calendar days after the date on which the claim
for payment is received by the insurer with the documentation reasonably necessary
to process the claim; or
(B)
within a specified number of calendar days, which number
has been agreed upon by the parties and included in the contract, after the
date on which the claim for payment is received by the insurer with the documentation
reasonably necessary to process the claim.
(12)
A contract between a preferred provider and
an insurer shall require the provider to comply with Insurance Code Article
3.70-3C §4 (Preferred Provider Benefit Plans), which relates to Continuity
of Care.
(13)
A contract between a preferred provider and an insurer
shall not prohibit, penalize, permit retaliation against, or terminate the
provider for communicating with any individual listed in Insurance Code Article
3.70-3C §7(c) (Preferred Provider Benefit Plans) about any of the matters
set forth therein.
(14)
A contract between a preferred provider and an insurer
conducting, using, or relying upon economic profiling to terminate physicians
or health care providers from a plan shall require the insurer to inform the
provider of the insurer's obligation to comply with Insurance Code Article
3.70-3C §3(h) (Preferred Provider Benefit Plans).
(15)
A contract between a preferred provider and an insurer
that engages in quality assessment shall disclose in the contract all requirements
of Insurance Code Article 3.70-3C §3(i) (Preferred Provider Benefit Plans).
(16)
A contract between a preferred provider and an insurer
shall not require a physician to issue an immunization or vaccination protocol
for an immunization or vaccination to be administered to an insured by a pharmacist.
(17)
A contract between a preferred provider and an insurer
shall not prohibit a pharmacist from administering immunizations or vaccinations
if such immunizations or vaccinations are administered in accordance with
the Texas Pharmacy Act, Article 4542a-1, Texas Civil Statutes and rules promulgated
thereunder.
(18)
A contract between a preferred provider and an insurer
shall require a provider that voluntarily terminates the contract to provide
reasonable notice to the insured, and shall require the insurer to provide
assistance to the provider as set forth in Insurance Code Article 3.70-3C
§6(e)(2) (Preferred Provider Benefit Plans).
(19)
A contract between a preferred provider and an insurer
shall require written notice to the provider upon termination by the insurer,
and in the case of termination of a physician or practitioner, the notice
shall include the provider's right to request a review, as set forth in §3.3706(c)
of this title (relating to Designation as a Preferred Provider, Decision to
Withhold Designation, Termination of a Preferred Provider, Review of Process).
(b)
In addition to all other contract rights, violations of
these rules shall be treated for purposes of complaint and action in accordance
with 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.
(c)
An insurer may enter into an agreement with a preferred
provider organization for the purpose of offering a network of preferred providers,
provided that it remains the insurer's responsibility to:
(1)
meet the requirements of Insurance Code Article 3.70-3C
(Preferred Provider Benefit Plans) and this subchapter; or
(2)
ensure that the requirements of Insurance Code Article
3.70-3C (Preferred Provider Benefit Plans) and this subchapter are met.
§3.3704.Freedom of Choice; Availability of Preferred Providers.
(a)
A preferred provider benefit plan 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 Articles 3.70-2(B)
or 21.52 of the Insurance Code provided that:
(1)
pursuant to the Insurance Code, Article 3.70-3C §3
(Preferred Provider Benefit Plans), Article 3.51-6, (3, and Article 3.70-3(A)(9),
no preferred provider benefit plan may require that a service be rendered
by a particular hospital, physician, or practitioner;
(2)
insureds 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 preferred provider benefit
plan;
(3)
insureds shall have the right to treatment and diagnostic
techniques as prescribed by a physician or other health care provider included
in the preferred provider benefit plan;
(4)
insureds shall have the right to continuity of care
as set forth in Article 3.70-3C, §4 (Preferred Provider Benefit Plans);
(5)
insureds shall have the right to emergency care services
as set forth in Article 3.70-3C, §5 (Preferred Provider Benefit Plans);
(6)
the basic level of coverage, excluding a reasonable
difference in deductibles, is not more than 30% less than the higher level
of coverage. A reasonable difference in deductibles shall be determined considering
the benefits of each individual policy;
(7)
the rights of an insured to exercise full freedom
of choice in the selection of a physician or provider are not restricted by
the insurer;
(8)
if the insurer is issuing other health insurance policies
in the service area that do not provide for the use of preferred providers,
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;
(9)
any actions taken by an insurer engaged in utilization
review under a preferred provider benefit plan shall be taken pursuant to
Insurance Code Article 21.58A and Chapter 19, Subchapter R of this title (relating
to Utilization Review Agents);
(10)
if covered services are not available through preferred
providers within the service area, nonpreferred providers shall be reimbursed
at the same percentage level of reimbursement as preferred providers. Nothing
in this section requires reimbursement at a preferred level of coverage solely
because an insured resides out of the service area and chooses to receive
services from providers other than preferred providers for the insured's own
convenience;
(11)
a preferred provider benefit plan may provide for
a different level of coverage for use of a nonpreferred provider if the referral
is made by a preferred provider, only if full disclosure of the difference
is included in the plan and the written description as required by §3.3705(b)
of this title (relating to Readability and Mandatory Disclosure Requirements);
and
(12)
both preferred provider benefits and basic level
benefits are reasonably available to all insureds within a designated service
area.
(b)
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.
(c)
An insurer shall not engage in retaliatory action against
an insured, including cancellation of or refusal to renew a policy, because
the insured or a person acting on behalf of the insured has filed a complaint
against the insurer or a preferred provider or has appealed a decision of
the insurer.
(d)
In addition to the requirements for availability of preferred
providers set forth in Insurance Code Article 3.70-3C §8 (Preferred Provider
Benefit Plans), any insurer offering a preferred provider benefit plan shall
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 service
area to afford all insureds 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. An insurer shall give special consideration to contracting with teaching
hospitals and hospitals that provide indigent care or care for uninsured individuals
as a significant percentage of their overall patient load.
§3.3706.Designation as a Preferred Provider, Decision to Withhold Designation, Termination of a Preferred Provider, Review of Process.
(a)
Physicians, practitioners, institutional providers, and
health care providers other than physicians, practitioners, and institutional
providers, if such other health care providers are included by an insurer
as preferred providers, licensed to treat injuries or illnesses or to provide
services covered by the preferred provider benefit plan and that comply with
the terms and conditions established by the insurer for designation as preferred
providers, shall be eligible to apply for and be afforded a fair, reasonable
and equitable opportunity to become preferred providers.
(1)
An insurer initially sponsoring a preferred provider benefit
plan shall notify all physicians and practitioners in the service area covered
by the plan of its intent to offer the plan and of the opportunity to apply
to participate.
(2)
Subsequently, an insurer shall annually notify all
non-contracting physicians and practitioners in the service area covered by
the plan of the existence of the plan and the opportunity to apply to participate
in the plan.
(3)
An insurer shall, upon request, make available to
any physician or provider information concerning the application process and
qualification requirements, including the use of economic profiling by the
insurer, used by the insurer to admit a provider to the plan.
(4)
All notifications required to be made by an insurer
pursuant to this subsection shall be made by publication or distributed in
writing to each physician and practitioner in the same manner.
(b)
Designation as a preferred provider shall not be unreasonably
withheld provided that, unless otherwise limited by the Insurance Code or
rule promulgated by the department, an insurer may reject an application from
a physician or health care provider on the basis that the preferred provider
benefit plan has sufficient qualified providers.
(1)
An insurer shall provide written notice of denial of any
initial application to a physician or health care provider, which includes:
(A)
the specific reason(s) for the denial; and
(B)
in the case of physicians and practitioners, the right
to a review of the denial as set forth in paragraph (2) of this subsection.
(2)
An insurer shall provide a reasonable review
mechanism that incorporates, in an advisory role only, a review panel.
(A)
The advisory review panel shall be composed of not less
than three individuals selected by the insurer from the list of physicians
or practitioners in the applicable service area contracting with the insurer.
(B)
At least one of the three individuals on the advisory review
panel shall be a physician or practitioner in the same or similar specialty
as the physician or practitioner requesting review unless there is no physician
or practitioner in the same or similar specialty contracting with the insured.
(C)
The list of physicians or practitioners required by subparagraph
(A) of this paragraph shall be provided to the insurer by the physicians or
practitioners who contract with the insurer in the applicable service area.
(D)
The recommendation of the advisory review panel shall be
provided upon request to the affected physician or practitioner.
(E)
In the event that the insurer makes a determination that
is contrary to the recommendation of the advisory review panel, a written
explanation of the insurer's determination shall be provided to the affected
physician or practitioner upon request.
(c)
Before terminating a contract with a preferred provider,
the insurer shall provide written notice of termination, which includes:
(1)
the specific reason(s) for the termination; and
(2)
in the case of physicians or practitioners, notice
of the right to request a review prior to termination conducted in the same
manner as the review mechanism set forth in subsection (b)(2) of this section
which includes the timelines set forth in subsections (d) and (e) for requesting
review, except in cases involving:
(A)
imminent harm to patient health;
(B)
an action by a state medical or other physician licensing
board or other government agency which impairs the physician's or practitioner's
ability to practice medicine or to provide services; or
(C)
fraud or malfeasance.
(d)
To obtain a standard review of an insurer's decision to
terminate him or her, a physician or practitioner shall:
(1)
make a written request to the insurer for a review of that
decision within ten business days of receipt of notification of the insurer's
intent to terminate him or her; and
(2)
deliver to the insurer, within 20 business days of
receipt of notification of the insurer's intent to terminate him or her, any
relevant documentation the physician or practitioner desires the advisory
review panel and insurer to consider in the review process.
(3)
The review process, including the recommendation of
the advisory review panel and the insurer's determination as required by subsection
(b)(2)(E) of this section, shall be completed and the results provided to
the physician or practitioner within 60 calendar days of the insurer's receipt
of the request for review.
(e)
To obtain an expedited review of an insurer's decision
to terminate him or her, a physician or practitioner shall:
(1)
make a written request to the insurer for a review of that
decision within five business days of receipt of notification of the insurer's
intent to terminate him or her; and
(2)
deliver to the insurer, within ten business days of
receipt of notification of the insurer's intent to terminate him or her, any
relevant documentation the physician or practitioner desires the advisory
review panel and insurer to consider in the review process.
(3)
The expedited review process, including the recommendation
of the advisory review panel and the insurer's determination as required by
subsection (b)(2)(E) of this section, shall be completed and the results provided
to the physician or practitioner within 30 calendar days of the insurer's
receipt of the request for review.
(f)
Confidentiality of information concerning the insured.
(1)
An insurer shall preserve the confidentiality of individual
medical records and personal information used in its termination review process.
Personal information shall include, at a minimum, name, address, telephone
number, social security number and financial information.
(2)
An insurer may not disclose or publish individual
medical records or other confidential information about an insured without
the prior written consent of the insured or unless otherwise required by law.
An insurer may provide confidential information to the advisory review panel
for the sole purpose of performing its advisory review function. Information
provided to the advisory review panel shall remain confidential.
(g)
Notice to insureds.
(1)
If a physician or practitioner is terminated for reasons
other than at the preferred provider's request, an insurer shall not notify
insureds of the termination until the effective date of the termination or
at such time as an advisory review panel makes a formal recommendation regarding
the termination, whichever is later.
(2)
If a physician or provider voluntarily terminates
the physician's or provider's relationship with an insurer, the insurer shall
provide assistance to the physician or provider in assuring that the notice
requirements are met as required by §3.3703(a)(18) of this title (relating
to Contracting Requirements).
(3)
If a physician or practitioner is terminated for reasons
related to imminent harm, an insurer may notify insureds immediately.
This agency hereby certifies that the adoption has been
reviewed by legal counsel and found to be a valid exercise of the agency's
legal authority.
Filed with the Office of the Secretary of State on June
25, 1999.
TRD-9903795
Lynda H. Nesenholtz
General Counsel and Chief Clerk
Texas Department of Insurance
Effective date: July 15, 1999
Proposal publication date: January 1, 1999
For further information, please call: (512) 463-6327
28 TAC §3.3705
The Commissioner of Insurance adopts the repeal of §3.3705
(relating to Procedure to Assure Adequate Treatment). The repeal is adopted
without change to the proposal as published in the January 8, 1999 issue of
the
Texas Register
(24 TexReg 233). Contemporaneously
with this repeal, the adoption of amendments to §§3.3701-3.704 and
new §§3.3705 and 3.3706 are published elsewhere in this issue of
the Texas Register.
The repeal is necessary so that new §§3.3705 and 3.3706 may be
adopted to implement legislation from the 75th Legislative Session in Senate
Bill 383.
Amendments to §3.3703 capture provisions relating to contract requirements
between the insurer and a preferred provider and new §3.3706 capture
provisions relating to termination that were included in §3.3705 which
is now repealed.
No comments were received.
Repeal of §3.3705 is adopted pursuant to Insurance Code,
Chapter 3, Subchapter G, as enacted by the 75th Legislature in Senate Bill
383 and Insurance Code, Article 1.03A. The Texas Insurance Code, Article 3.70-3C
(Preferred Provider Benefit Plans), Section 9, provides that the commissioner
shall adopt rules and regulations as necessary to implement the provisions
of the article and to ensure reasonable assessibility and availability of
preferred provider and basic level benefits to Texas citizens. Insurance Code
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.
This agency hereby certifies that the adoption has been reviewed
by legal counsel and found to be a valid exercise of the agency's legal authority.
Filed with the Office of the Secretary of State on June
25, 1999.
TRD-9903794
Lynda H. Nesenholtz
General Counsel and Chief Clerk
Texas Department of Insurance
Effective date: July 15, 1999
Proposal publication date: January 1, 1999
For further information, please call: (512) 463-6327
Subchapter F. Fire Alarm Rules
Chapter 34.
State Fire Marshal