The Texas Department of Insurance (TDI) suspended preferred provider benefit regulations until it adopts rules implementing legislation passed in the 2011 session of the legislature. A bulletin from Insurance Commissioner Eleanor Kitzman said the legislature passed bills that significantly affect TDI's ability to regulate health care plans.
The rules that TDI suspended were the result of work by the TDI Network Adequacy Workgroup, which included facility-based physician members. The rules are the result of four years of work, beginning with the passage of Senate Bill 1731 in 2007, the study of network adequacy issues (as required by that bill), and the passage of House Bill 2256 in 2009. Since HB 2256 passed, TDI staff have worked with health plans, hospitals, and provider stakeholders to refine the rules, which were improved through the course of two informal and one formal postings, two public stakeholder meetings, and a public hearing.
The adopted but suspended rules enhance preferred provider benefit plan regulations to:
- Ensure availability of contracted physicians and providers in a manner tailored to local markets, as required by HB 2256;
- Allow waivers in narrow circumstances, in accordance with HB 2256;
- Provide important information to consumers to enhance their decision making;
- Provide important information to TDI to enhance its ability to regulate; and
- Provide standards for out-of-network payments without setting rates.
In addition, the rules:
- Retain the prohibition against required contracting of facility-based physicians in insurer-facility contracts but permit insurers to require out-of-network referral notices;
- Set forth the criteria for an adequate network, similar to HMO network requirements;
- Require specific consumer disclosures, designation of service areas, accurate listings of preferred providers with expanded information for consumers, and higher out-of-network reimbursements for reliance on inaccurate directories;
- Establish "Approved Hospital Care Network" designations for compliant plans and "Limited Hospital Care Network" designations for others;
- Establish new criteria for selection, credentialing, and retention of preferred providers based on national standards;
- Provide for waivers of network adequacy requirement(s) when contracts cannot be obtained or would be unreasonable to obtain;
- Require annual network adequacy reports and access plans if network adequacy standards are not met;
- Establish enforcement provisions for failure to provide an adequate network;
- Set reimbursement standards for out-of-network claims that standardize how "usual and customary" and claims data may be used in setting reimbursements, give patients credit for balance-billed amounts paid when there was no choice to stay in network, and give patients comparison information based on their negotiated rates to allow them to better negotiate balance bills; and
- Require analysis of the impact of undercompensated care on contracted charges .
TMA will remain active in the rulemaking process and work to preserve the patient and consumer protection language in the currently adopted network adequacy rules.
"During the rulemaking process, with the input of stakeholders, some requirements for preferred provider plans that were to be implemented by carriers by May 2012 could be modified," the TDI bulletin says. "To prevent disruption of the market, the department is providing notice through this bulletin that carriers will be granted additional time to implement the preferred provider plan requirements, and the department will suspend enforcement of the new requirements until the revised rules are issued."
See the November 2011 Texas Medicine story for more information on the preferred provider rules.
The complete rules are posted online [PDF]; the actual adopted rules start on page 330 of the 400-plus page document.
Action, Jan. 3, 2012