CHAPTER 1272. DELEGATION OF CERTAIN FUNCTIONS BY HEALTH MAINTENANCE ORGANIZATION

State Codes and Statutes

Statutes > Texas > Insurance-code > Title-8-health-insurance-and-other-health-coverages > Chapter-1272-delegation-of-certain-functions-by-health-maintenance-organization

INSURANCE CODE

TITLE 8. HEALTH INSURANCE AND OTHER HEALTH COVERAGES

SUBTITLE C. MANAGED CARE

CHAPTER 1272. DELEGATION OF CERTAIN FUNCTIONS BY HEALTH

MAINTENANCE ORGANIZATION

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 1272.001. DEFINITIONS. (a) In this chapter:

(1) "Delegated entity" means an entity, other than a health

maintenance organization authorized to engage in business under

Chapter 843, that by itself, or through subcontracts with one or

more entities, undertakes to arrange for or provide medical care

or health care to an enrollee in exchange for a predetermined

payment on a prospective basis and that accepts responsibility

for performing on behalf of the health maintenance organization a

function regulated by this chapter, Chapter 222, 251, or 258, as

applicable to a health maintenance organization, Chapter 843 or

1271, Section 1367.053, Subchapter A, Chapter 1452, or Subchapter

B, Chapter 1507. The term does not include:

(A) an individual physician; or

(B) a group of employed physicians, practicing medicine under

one federal tax identification number, whose total claims paid to

providers not employed by the group constitute less than 20

percent of the group's total collected revenue computed on a

calendar year basis.

(2) "Delegated network" means a delegated entity that assumes

total financial risk for more than one of the following

categories of health care services: medical care, hospital or

other institutional services, or prescription drugs, as defined

by Section 551.003, Occupations Code. The term does not include a

delegated entity that shares risk for a category of services with

a health maintenance organization.

(3) "Delegated third party" means a third party other than a

delegated entity that contracts with a delegated entity, either

directly or through another third party, to:

(A) accept responsibility for performing a function regulated by

this chapter, Chapter 222, 251, or 258, as applicable to a health

maintenance organization, Chapter 843 or 1271, Section 1367.053,

Subchapter A, Chapter 1452, or Subchapter B, Chapter 1507; or

(B) receive, handle, or administer funds, if the receipt,

handling, or administration is directly or indirectly related to

a function regulated by this chapter, Chapter 222, 251, or 258,

as applicable to a health maintenance organization, Chapter 843

or 1271, Section 1367.053, Subchapter A, Chapter 1452, or

Subchapter B, Chapter 1507.

(4) "Delegation agreement" means an agreement by which a health

maintenance organization assigns the responsibility for a

function regulated by this chapter, Chapter 222, 251, or 258, as

applicable to a health maintenance organization, Chapter 843 or

1271, Section 1367.053, Subchapter A, Chapter 1452, or Subchapter

B, Chapter 1507.

(5) "Limited provider network" means a subnetwork within a

health maintenance organization delivery network in which

contractual relationships exist between physicians, certain

providers, independent physician associations, or physician

groups that limits an enrollee's access to physicians and

providers to those physicians and providers in the subnetwork.

(b) In this chapter, terms defined by Section 843.002 have the

meanings assigned by that section.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,

2005.

Amended by:

Acts 2005, 79th Leg., Ch.

728, Sec. 11.074(e), eff. September 1, 2005.

Acts 2007, 80th Leg., R.S., Ch.

730, Sec. 3B.02701, eff. September 1, 2007.

Sec. 1272.002. COMPLIANCE OF LIMITED PROVIDER NETWORK OR

DELEGATED ENTITY WITH CERTAIN LEGAL REQUIREMENTS. A limited

provider network or delegated entity shall comply with each

statutory or regulatory requirement that relates to a function

assumed by or carried out by the network or entity under this

chapter.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,

2005.

SUBCHAPTER B. DELEGATION AGREEMENTS

Sec. 1272.051. APPLICABILITY OF SUBCHAPTER. This subchapter

does not apply to a group model health maintenance organization,

as defined by Section 843.111.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,

2005.

Sec. 1272.052. DELEGATION AGREEMENT REQUIRED. (a) A health

maintenance organization that delegates a function required by

this chapter, Chapter 843, 1271, or 1367, Subchapter A, Chapter

1452, or Subchapter B, Chapter 1507, shall execute a written

delegation agreement with the entity to which the function is

delegated.

(b) The health maintenance organization shall file the

delegation agreement with the department not later than the 30th

day after the date the agreement is executed.

which party bears the expense of complying with a requirement of

this subchapter, including the cost of an examination required by

the department under Subchapter B, Chapter 401, if applicable.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,

2005.

Amended by:

Acts 2005, 79th Leg., Ch.

728, Sec. 11.074(f), eff. September 1, 2005.

Acts 2007, 80th Leg., R.S., Ch.

730, Sec. 2G.002, eff. April 1, 2009.

Sec. 1272.053. MONITORING PLAN. A delegation agreement required

by Section 1272.052 must establish a monitoring plan that:

(1) allows the health maintenance organization to monitor

compliance with the minimum solvency requirements established

under Subchapter D, if applicable; and

(2) includes:

(A) a description of financial practices that will ensure that

the delegated entity tracks and reports liabilities that have

been incurred but not reported;

(B) a summary of the total amount paid by the entity to

physicians and providers on a monthly basis; and

enrollees regarding delays in payment or nonpayment of claims,

including the status of each complaint, on a monthly basis.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,

2005.

Sec. 1272.054. REQUIREMENTS FOR TERMINATION WITHOUT CAUSE. A

delegation agreement required by Section 1272.052 must provide

that the agreement cannot be terminated without cause by the

delegated entity or the health maintenance organization unless

the party terminating the agreement provides written notice

before the 90th day before the termination date.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,

2005.

Sec. 1272.055. COLLECTION OF PAYMENTS. A delegation agreement

required by Section 1272.052 must prohibit the delegated entity

and the physicians and providers with whom the entity has

contracted from billing or attempting to collect from an enrollee

under any circumstance, including the insolvency of the health

maintenance organization or entity, payments for covered services

other than authorized copayments and deductibles.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,

2005.

Sec. 1272.056. COMPLIANCE WITH STATUTORY AND REGULATORY

REQUIREMENTS. A delegation agreement required by Section

1272.052 must provide that:

(1) the agreement does not limit in any way the health

maintenance organization's authority or responsibility, including

financial responsibility, to comply with each statutory or

regulatory requirement; and

(2) the delegated entity shall comply with each statutory or

regulatory requirement relating to a function assumed by or

carried out by the entity.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,

2005.

Sec. 1272.057. EXAMINATION BY COMMISSIONER. A delegation

agreement required by Section 1272.052 must require the delegated

entity to permit the commissioner to examine at any time any

information the commissioner reasonably believes is relevant to:

(1) the financial solvency of the entity; or

(2) the ability of the entity to meet the entity's

responsibilities in connection with any function delegated to the

entity by the health maintenance organization.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,

2005.

Sec. 1272.058. INFORMATION RELATING TO DELEGATED THIRD PARTY. A

delegation agreement required by Section 1272.052 must require

the delegated entity to provide the license number of a delegated

third party performing a function that requires:

(1) a license as a third-party administrator under Chapter 4151

or utilization review agent under Chapter 4201; or

(2) another license under this code or another insurance law of

this state.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,

2005.

Amended by:

Acts 2007, 80th Leg., R.S., Ch.

730, Sec. 2G.003, eff. April 1, 2009.

Sec. 1272.059. CONTRACTS WITH DELEGATED THIRD PARTY. A

delegation agreement required by Section 1272.052 must provide

that:

(1) any agreement under which the delegated entity directly or

indirectly delegates a function required by this chapter, Chapter

843, 1271, or 1367, Subchapter A, Chapter 1452, or Subchapter B,

Chapter 1507, including the handling of funds, if applicable, to

a delegated third party must be in writing; and

(2) the delegated entity, in contracting with a delegated third

party directly or through a third party, shall require the

delegated third party to comply with the requirements of Section

1272.057 and any rules adopted by the commissioner implementing

that section.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,

2005.

Amended by:

Acts 2005, 79th Leg., Ch.

728, Sec. 11.074(g), eff. September 1, 2005.

Sec. 1272.060. UTILIZATION REVIEW. A delegation agreement

required by Section 1272.052 must provide that:

(1) enrollees shall receive notification at the time of

enrollment of which entity is responsible for performing

utilization review;

(2) the delegated entity or third party performing utilization

review shall perform that review in accordance with Chapter 4201;

and

(3) the delegated entity or third party shall forward

utilization review decisions made by the entity or third party to

the health maintenance organization on a monthly basis.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,

2005.

Amended by:

Acts 2007, 80th Leg., R.S., Ch.

730, Sec. 2G.004, eff. April 1, 2009.

Sec. 1272.061. RIGHTS AND DUTIES OF DELEGATED ENTITY AND HEALTH

MAINTENANCE ORGANIZATION. A delegation agreement required by

Section 1272.052 must provide that the delegated entity

acknowledges and agrees that:

(1) the health maintenance organization:

(A) is required to establish, operate, and maintain a health

care delivery system, quality assurance system, provider

credentialing system, and other systems and programs that meet

statutory and regulatory standards;

(B) is directly accountable for compliance with those standards;

and

delegated entity provide proof of financial viability;

(2) the role of another delegated entity with which the

delegated entity subcontracts through a delegated third party is

limited to performing certain delegated functions of the health

maintenance organization, using standards that are approved by

the health maintenance organization and that are in compliance

with applicable statutes and rules and subject to the health

maintenance organization's oversight and monitoring of the

entity's performance; and

(3) if the delegated entity fails to meet monitoring standards

established to ensure that functions delegated or assigned to the

entity under the delegation agreement are in full compliance with

all statutory and regulatory requirements, the health maintenance

organization may cancel delegation of any or all delegated

functions.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,

2005.

Sec. 1272.062. INFORMATION TO BE PROVIDED BY DELEGATED ENTITY TO

HEALTH MAINTENANCE ORGANIZATION. (a) A delegation agreement

required by Section 1272.052 must provide that:

(1) except as provided by Subsection (b), the delegated entity

shall make available to the health maintenance organization

samples of contracts with physicians and providers to ensure

compliance with the contractual requirements described by

Sections 1272.054 and 1272.055; and

(2) the delegated entity shall provide to the health maintenance

organization, in a format usable for audit purposes and not more

frequently than quarterly unless otherwise specified in the

delegation agreement, the data necessary for the health

maintenance organization to comply with the department's

reporting requirements with respect to any delegated functions

performed under the delegation agreement, including:

(A) a summary describing the methods, including capitation,

fee-for-service, or other risk arrangements, that the delegated

entity used to pay the entity's physicians and providers, and

including the percentage of physicians and providers paid for

each payment category;

(B) the period that claims and debts for medical services owed

by the delegated entity have been pending and the aggregate

dollar amount of those claims and debts;

file claims for reinsurance, coordination of benefits, and

subrogation, if required by the delegation agreement; and

(D) documentation, except for information, documents, and

deliberations related to peer review that are confidential or

privileged under Subchapter A, Chapter 160, Occupations Code,

that relates to:

(i) a regulatory agency's inquiry or investigation of the

delegated entity or an individual physician or provider with whom

the entity contracts that relates to an enrollee of the health

maintenance organization; and

(ii) the final resolution of a regulatory agency's inquiry or

investigation.

(b) A delegation agreement may not require a delegated entity to

make available to the health maintenance organization contractual

provisions relating to financial arrangements with the entity's

physicians and providers.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,

2005.

Sec. 1272.063. ENROLLEE COMPLAINTS. (a) A delegation agreement

required by Section 1272.052 must provide that:

(1) if the delegated entity receives a complaint that does not

involve emergency care, the entity shall report the complaint to

the health maintenance organization not later than the second

business day after the date the entity receives the complaint;

and

(2) if the delegated entity receives a complaint involving

emergency care, the entity shall immediately forward the

complaint to the health maintenance organization.

(b) Subsection (a) does not prohibit a delegated entity from

attempting to resolve a complaint.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,

2005.

Sec. 1272.064. RULES. The commissioner may adopt rules as

necessary to implement this subchapter.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,

2005.

SUBCHAPTER C. INFORMATION REPORTING TO DELEGATED ENTITY

Sec. 1272.101. APPLICABILITY OF SUBCHAPTER. This subchapter

does not apply to a group model health maintenance organization,

as defined by Section 843.111.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,

2005.

Sec. 1272.102. REPORTING REQUIRED. (a) The commissioner shall

determine the information a health maintenance organization shall

provide to a delegated entity with which the health maintenance

organization has entered into a delegation agreement.

(b) The information must include:

(1) for each enrollee who is eligible or assigned to receive

services from the delegated entity:

(A) the enrollee's name, birth date or social security number,

age, and sex;

(B) the benefit plan and any riders to that plan that are

applicable to the enrollee; and

(2) the name and birth date or social security number of each

enrollee added or terminated since the health maintenance

organization last provided the information;

(3) if the health maintenance organization pays any claims on

behalf of the delegated entity, a summary of the number and

amount of:

(A) claims paid during the previous reporting period; and

(B) pharmacy prescriptions paid for each enrollee during the

previous reporting period for which the delegated entity has

taken partial risk;

(4) information that enables the delegated entity to file claims

for reinsurance, coordination of benefits, and subrogation;

(5) patient complaint data that relates to the delegated entity;

(6) detailed risk-pool data, reported quarterly and on

settlement;

(7) if hospital or facility costs impact the delegated entity's

costs, the percent of premium attributable to hospital or

facility costs, reported quarterly; and

(8) if there are changes in hospital or facility contracts with

the health maintenance organization, the projected impact of

those changes on the percent of premium attributable to hospital

and facility costs during the 30-day period following those

changes.

on request, receive additional nonproprietary information

regarding claims paid by a health maintenance organization on

behalf of the entity.

(d) A health maintenance organization shall provide information

required under Subsections (b)(1)-(5) in standard electronic

format at least monthly unless the delegation agreement provides

otherwise.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,

2005.

Sec. 1272.103. RULES. The commissioner may adopt rules as

necessary to implement this subchapter.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,

2005.

SUBCHAPTER D. RESERVE REQUIREMENTS

Sec. 1272.151. APPLICABILITY OF SUBCHAPTER. This subchapter

does not apply to a group model health maintenance organization,

as defined by Section 843.111.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,

2005.

Sec. 1272.152. GENERAL RESERVE REQUIREMENTS. (a) A delegated

network shall maintain reserves adequate for the liabilities and

risks assumed by the network, as computed in accordance with

accepted standards, practices, and procedures relating to the

liabilities and risks for which the reserves are maintained,

including known and unknown components and anticipated expenses

of providing benefits or services.

(b) Except as provided by Sections 1272.153 and 1272.154, a

delegated network shall maintain reserves as described by

Subsection (c) only with respect to the portion of services

assumed under the delegation agreement that is outside the scope

of the network's license for medical care or hospital or other

institutional services, as applicable.

to the greater of:

(1) 80 percent of the amount of liabilities and risks for which

reserves must be maintained under this subchapter and that have

been incurred but not paid by the network; or

(2) an amount equal to two months of the premium amount assumed

by the network for services with respect to which reserves must

be maintained under this subchapter.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,

2005.

Sec. 1272.153. RESERVE REQUIREMENTS FOR MEDICAL CARE AND

HOSPITAL OR INSTITUTIONAL SERVICES. A delegated network that

assumes under a delegation agreement both medical care and

hospital or institutional services shall maintain reserves

adequate to cover the liabilities and risks associated with

medical care or hospital or institutional services, whichever

category of services is allocated the largest portion of the

premium by the health maintenance organization.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,

2005.

Sec. 1272.154. RESERVE REQUIREMENTS FOR PRESCRIPTION DRUGS. A

delegated network that assumes financial risk for medical care or

hospital or institutional services and for prescription drugs, as

defined by Section 551. 003, Occupations Code, shall maintain, in

addition to any other reserves required under this subchapter,

reserves adequate to cover the liabilities and risks associated

with the prescription drug benefits.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,

2005.

Sec. 1272.155. FORM OF RESERVES. The reserves required under

this subchapter must be:

(1) secured by and consist only of United States legal tender or

bonds of the United States or this state;

(2) held at a financial institution in this state that is

chartered by the United States or this state; and

(3) held in trust for, for the benefit of, or to provide health

care services to enrollees under the delegation agreement.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,

2005.

Sec. 1272.156. ESCROW ACCOUNT. (a) A delegated network

required to maintain reserves under this subchapter shall

establish an escrow account to pay claims and deposit the

reserves into the escrow account on:

(1) notification of the network's intent to terminate or refuse

to renew a contract under which the network assumed liabilities

and risks from a health maintenance organization; or

(2) modification of a contract under which the network assumed

liabilities and risks from a health maintenance organization if

the modified contract eliminates those liabilities and risks.

(b) The delegated network shall notify the commissioner on

establishing an escrow account under this section.

into the escrow account, the delegated network is entitled to the

release of funds remaining in escrow. Funds released from the

escrow account shall be distributed to each individual who

contributed to the reserves deposited into the account in

proportion to the individual's total contribution.

(d) The commissioner shall take any action necessary to ensure

the release of funds remaining in escrow after the date specified

by Subsection (c).

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,

2005.

SUBCHAPTER E. COMPLIANCE

Sec. 1272.201. APPLICABILITY OF SUBCHAPTER. This subchapter

does not apply to a group model health maintenance organization,

as defined by Section 843.111.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,

2005.

Sec. 1272.202. NOTICE OF NONCOMPLIANCE OR HAZARDOUS OPERATING

CONDITION. (a) If a health maintenance organization becomes

aware of information that indicates a delegated entity with which

the health maintenance organization has entered into a delegation

agreement is not operating in accordance with the agreement or is

operating in a condition that renders continuing the entity's

business hazardous to the enrollees, the health maintenance

organization shall in writing:

(1) notify the entity of those findings; and

(2) request a written explanation and documentation supporting

that explanation of the entity's apparent noncompliance or the

existence of the hazardous condition.

(b) A health maintenance organization shall provide to the

commissioner a copy of each notice and request submitted to a

delegated entity under this section and each response or other

documentation the health maintenance organization receives or

generates in response to the notice and request.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,

2005.

Sec. 1272.203. RESPONSE TO NOTICE. A delegated entity shall

respond in writing to a request from a health maintenance

organization under Section 1272.202 not later than the 30th day

after the date the entity receives the request.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,

2005.

Sec. 1272.204. COOPERATION OF HEALTH MAINTENANCE ORGANIZATION.

A health maintenance organization shall cooperate with a

delegated entity to correct a failure by the entity to comply

with the department's regulatory requirements relating to:

(1) a function delegated to the entity by the health maintenance

organization; or

(2) a matter necessary for the health maintenance organization

to ensure compliance with each statutory or regulatory

requirement.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,

2005.

Sec. 1272.205. EXAMINATION BY DEPARTMENT; REPORT. (a) On

receipt of a notice under Section 1272.202 or if complaints are

filed with the department, the department may conduct an

examination regarding:

(1) any matter contained in the notice; and

(2) any other matter relating to the financial solvency of the

delegated entity or the entity's ability to meet the entity's

responsibilities in connection with a function delegated to the

entity by the health maintenance organization.

(b) Except as provided by Subsection (c), the department, on

completion of an examination under this section, shall report to

the delegated entity and the health maintenance organization:

(1) the results of the examination; and

(2) any action the department determines is necessary to ensure

that:

(A) the health maintenance organization meets the health

maintenance organization's responsibilities under this code, any

other insurance laws of this state, and rules adopted by the

commissioner; and

(B) the entity is able to meet the entity's responsibilities in

connection with a function delegated to the entity by the health

maintenance organization.

organization information relating to fee schedules, prices, or

cost of care or other information not relevant to the monitoring

plan.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,

2005.

Sec. 1272.206. RESPONSE TO DEPARTMENT REPORT; CORRECTIVE PLAN.

The delegated entity and health maintenance organization shall

respond to the department's report under Section 1272.205(b) and

submit a corrective plan to the department not later than the

30th day after the date of receipt of the report.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,

2005.

Sec. 1272.207. REQUEST FOR CORRECTIVE ACTION. The department

may request at any time that a delegated entity take corrective

action to comply with the department's statutory and regulatory

requirements that:

(1) relate to a function delegated by the health maintenance

organization to the entity; or

(2) are necessary to ensure the health maintenance

organization's compliance with each statutory or regulatory

requirement.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,

2005.

Sec. 1272.208. AUTHORITY OF COMMISSIONER TO ISSUE ORDER. (a)

Regardless of whether a delegated entity complies with a request

for corrective action under Section 1272.207, the commissioner

may order a health maintenance organization with which the entity

has entered into a delegation agreement to take any action the

commissioner determines is necessary to ensure that the health

maintenance organization is complying with this chapter, Chapter

843, 1271, or 1367, Subchapter A, Chapter 1452, or Subchapter B,

Chapter 1507.

(b) Actions the commissioner may order a health maintenance

organization to take under this section include:

(1) reassuming the functions delegated to the delegated entity,

including claims payments for services previously provided to

enrollees;

(2) temporarily or permanently ceasing assignment of new

enrollees to the entity;

(3) temporarily or permanently transferring enrollees to

alternative delivery systems to receive services; or

(4) terminating the delegation agreement with the entity.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,

2005.

Amended by:

Acts 2005, 79th Leg., Ch.

728, Sec. 11.074(h), eff. September 1, 2005.

Sec. 1272.209. PUBLIC DOCUMENTS. (a) Except as provided by

Subsection (b), a report required under Section 1272.205(b) or

corrective plan required under Section 1272.206 is a public

document.

(b) Health care provider fee schedules, prices, costs of care,

or other information that is not relevant to the monitoring plan

or is confidential by law is not a public document under this

section.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,

2005.

Sec. 1272.210. RECORD OF COMPLAINTS; REPORT. (a) The

department shall:

(1) maintain enrollee and provider complaints in a manner that

identifies complaints made about limited provider networks and

delegated entities; and

(2) periodically issue a report on the complaints that includes

a list of complaints organized by:

(A) category;

(B) action taken on the complaint; and

(b) The department shall make available to the public the report

and information to assist the public in evaluating the

information contained in the report.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,

2005.

Sec. 1272.211. RULES. The commissioner may adopt rules as

necessary to implement this subchapter.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,

2005.

SUBCHAPTER F. PENALTIES

Sec. 1272.251. APPLICABILITY OF SUBCHAPTER. This subchapter

does not apply to a group model health maintenance organization,

as defined by Section 843.111.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,

2005.

Sec. 1272.252. SUSPENSION OR REVOCATION OF LICENSE OF

THIRD-PARTY ADMINISTRATOR OR UTILIZATION REVIEW AGENT.

Notwithstanding any other provision of this code or another

insurance law of this state, the commissioner may suspend or

revoke the license of a third-party administrator or utilization

review agent that fails to comply with Subchapter B, C, or E.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,

2005.

Sec. 1272.253. SANCTIONS AND PENALTIES AGAINST HEALTH

MAINTENANCE ORGANIZATION. The commissioner may impose sanctions

or penalties under Chapters 82, 83, and 84 on a health

maintenance organization that does not provide in a timely manner

information required by Subchapter C.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,

2005.

Sec. 1272.254. CONTRACTUAL PENALTIES REQUIRED. A health

maintenance organization by contract shall establish penalties

for a delegated entity that does not provide in a timely manner

information required under a monitoring plan established under

Section 1272.053.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,

2005.

Sec. 1272.255. RULES. The commissioner may adopt rules as

necessary to implement this subchapter.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,

2005.

SUBCHAPTER G. PROVISION OF SERVICES BY LIMITED PROVIDER NETWORK

OR DELEGATED ENTITY

Sec. 1272.301. ACCESS TO OUT-OF-NETWORK SERVICES. (a) A

contract between a health maintenance organization and a limited

provider network or delegated entity must provide that:

(1) if medically necessary covered services are not available

through network physicians or providers, the limited provider

network or delegated entity, on the request of a network

physician or provider, shall:

(A) allow a referral to a non-network physician or provider; and

(B) fully reimburse the non-network physician or provider at the

usual and customary rate or an agreed rate; and

(2) before the limited provider network or delegated entity may

deny a referral to a non-network physician or provider, a

specialist of the same or similar specialty as the type of

physician or provider to whom the referral is requested must

conduct a review of the request.

(b) The limited provider network or delegated entity shall allow

the referral within the time appropriate to the circumstances

relating to the delivery of the services and the condition of the

enrollee who is a patient, but not later than the fifth business

day after the date the network or entity receives any reasonably

requested documentation.

primary care physician or specialist providers to receive

medically necessary covered services that are not available

within the limited provider network or through the delegated

entity.

(d) A denial of out-of-network services under this section is

subject to appeal under Chapter 4201.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,

2005.

Amended by:

Acts 2007, 80th Leg., R.S., Ch.

730, Sec. 2G.005, eff. April 1, 2009.

Sec. 1272.302. CONTINUITY OF CARE. (a) In this section,

"special circumstance" means a condition regarding which a

treating physician or provider reasonably believes that

discontinuing care by that physician or provider could cause harm

to an enrollee who is a patient. Examples of an enrollee who has

a special circumstance include an enrollee with a disability,

acute condition, or life-threatening illness and an enrollee who

is past the 24th week of pregnancy.

(b) A contract between a health maintenance organization and a

limited provider network or delegated entity must require that

each contract between the network or entity and a physician or

provider must:

(1) require that reasonable advance notice be given to an

enrollee of an impending termination from the network or entity

of a physician or provider who is currently treating the

enrollee; and

(2) provide that the termination of the physician's or

provider's contract, except for reason of medical competence or

professional behavior, does not release the network or entity

from the obligation to reimburse the physician or provider for

treatment of an enrollee who has a special circumstance at a rate

that is not less than the contract rate for that enrollee's care

in exchange for continuity of ongoing treatment of the enrollee

then receiving medically necessary treatment in accordance with

the dictates of medical prudence.

circumstance. That physician or provider must:

(1) request that the enrollee be permitted to continue treatment

under the physician's or provider's care; and

(2) agree not to seek payment from the enrollee who is a patient

of any amount for which the enrollee would not be responsible if

the physician or provider continued to be included in the limited

provider network or delegated entity.

(d) Except as provided by Subsection (e), this section does not

extend the obligation of a limited provider network or delegated

entity to reimburse a terminated physician or provider for

ongoing treatment of an enrollee after:

(1) the 90th day after the effective date of the termination; or

(2) if the enrollee has been diagnosed with a terminal illness

at the time of termination, the expiration of the nine-month

period after the effective date of the termination.

(e) If an enrollee is past the 24th week of pregnancy at the

time of termination, the obligation of the limited provider

network or delegated entity to reimburse the terminated physician

or provider or, if applicable, the enrollee extends through

delivery of the child, immediate postpartum care, and a follow-up

checkup within the six-week period after delivery.

(f) A contract between a limited provider network or delegated

entity and a physician or provider must provide procedures for

resolving disputes regarding the necessity for continued

treatment by a physician or provider.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 3, eff. April 1,

2005.

State Codes and Statutes

State Codes and Statutes

State Codes and Statutes

State Codes and Statutes

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