|
|
 |
General Information for Delegated Entities (Texas)
Delegation of Certain Functions by an HMO-HB 2828-Signed by the Governor
This bill expands the requirements for delegated networks set forth under SB 890 passed last session. One of the most important features of the bill is that it gives the TDI more authority to oversee these entities. In addition the bill provides the following:
- Requires HMOs to track complaints related to delegated entities.
- The HMO and the delegated entity must agree which is financially responsible for compliance with this Act. And such agreement must include a plan for the HMO to monitor the delegated entity's solvency.
- Requires a delegated entity to maintain adequate reserves and cover medical and hospital risks as applicable.
- Requires reserves to be 80% of the risk or 2 month's premium, whichever is greater.
- Requires that each contract between an HMO and a limited provider network or delegated entity provide for out-of-network services under certain conditions.
- Establishes a procedure for referral, approval and denial, which is subject to appeal, of out-of-network services.
- Requires an HMO to provide an accurate written description of health care plan terms and conditions to an enrollee who chooses a primary care physician practicing in a limited provider network or delegated entity. Such information must be included with the enrollee's identification card or in a separate mailing.
- Requires that the agreement between an HMO and delegated entity include provisions related to financial solvency and qualifications of utilization review agents.
- Requires an HMO to take specified actions against a delegated entity if the HMO becomes aware of any information that indicates that a delegated entity is not operating in accordance with its written agreement or is operating its business in a condition hazardous to its enrollees.
- Requires an HMO to establish penalties for delegated entities that do not provide timely information required under a monitoring plan.
Subchapter AA. Delegated Entities 28 TAC §§11.2601-11.2612
The Texas Department of Insurance proposes new sections to Chapter 11 by adding Subchapter AA, §§11.2601-11.2612, relating to delegation agreements entered into by Health Maintenance Organizations (HMOs) with certain delegated entities. This proposal is necessary to implement provisions of House Bill (HB) 2828, 77th Texas Legislature. HB 2828 amends the definition of delegated entity in the Texas HMO Act, Texas Insurance Code (TIC), Article 20A.02(ee) and adds definitions for "delegated network," "delegated third party" and "limited provider network." HB 2828 also re-enacts and amends the original delegated entity section of the Texas HMO Act of the TIC (Article 20A.18C) by clarifying the requirements that must be met in order for an HMO to delegate certain functions to delegated entities as defined in the bill. The bill defines a "delegated entity" as any non-HMO entity to which an HMO delegates the responsibility to arrange for or to provide medical care or health care to an enrollee in exchange for a predetermined payment on a prospective basis and that accepts responsibility to perform on behalf of the HMO any function regulated by the Texas HMO Act. The bill requires that delegation contracts between HMOs and delegated entities, as well as contracts between delegated entities and other third parties involved in the delegation chain, contain clauses that require the delegated entity to provide sufficient information to the HMO to allow the HMO to monitor the solvency of the delegated entity and the ability of the delegated entity and any delegated third parties to perform the functions delegated by the HMO in the contract.
These contracts must also allow the department to conduct on-site examinations of the delegated entity and any delegated third parties to obtain information that the department believes is relevant to the issue of the delegated entity or the delegated third party's solvency or the delegated entity or delegated third party's ability to carry out any function delegated by the HMO. These examinations may be conducted based on information received from the HMO as a result of its monitoring or upon the department's own initiative if the department believes that circumstances so warrant. The bill also sets out specific solvency requirements that must be met by a delegated network that takes on full responsibility for the provision of services on behalf of the HMO. HB 2828 specifies that an HMO remains ultimately responsible for ensuring that any function delegated under Art. 20A.18C, including claims payment, is performed in compliance with the laws and rules governing that function. This does not mean that the HMO would be responsible, beyond what is explicitly required in this subchapter, for directing the day to day operations of the delegated entity or attempting to enforce or control contracts between a delegated entity and any third parties with whom a delegated entity has contracted. Instead, the HMO must develop and maintain a monitoring plan that enables the HMO to determine that all delegated functions are being performed appropriately and that all delegated entities and or third parties performing delegated functions have the financial ability to continue to perform the delegated functions. If an HMO cannot determine this through its monitoring plan, the HMO should either amend its agreement with the delegated entity or end the agreement and enter into an agreement with a delegated entity that includes an effective monitoring plan. In the event that the HMO does not or cannot comply with its responsibilities under the subchapter, the commissioner is explicitly authorized to take any action necessary, including the ability to order an HMO to resume any delegated function, up to and including, in accordance with applicable statutes and rules, the payment of claims that a delegated entity has failed to pay. The commissioner has the authority, in entering these orders, to take into account the extent to which the HMO monitored the delegated entity and took any actions required under this subchapter.
§11.2601. General Provisions.
(a) Purpose. The purpose of this subchapter is to set forth the requirements that must be met by any HMO that delegates any function as described in Texas Insurance Code Art. 20A.18C. These requirements are designed to ensure that a delegating HMO:
(1) identifies all responsibilities relating to the function being delegated;
(2) creates an agreement that enables the HMO and department to monitor both the delegated entity's financial solvency and performance or subsequent delegation of all delegated functions; and
(3) retains ultimate responsibility for ensuring that all delegated functions are performed in accordance with applicable statutes and rules.
(b) Severability. Where any terms or sections of this subchapter are determined by a court of competent jurisdiction to be inconsistent with the Act, as identified by this subchapter, the Act will apply and the remaining terms and provisions of this subchapter shall continue in effect.
(c) Applicability to Group Model HMO. This subchapter does not apply to a group model HMO, as defined by Texas Insurance Code Art. 20A.06A.
§11.2602. Definitions. The following words and terms, when used in this subchapter, shall have the following meanings, unless the context clearly indicates otherwise.
(1) Act--The HMO Act, Texas Insurance Code, Chapter 20A.
(2) Delegated entity--An entity, other than an HMO authorized to do business under the Act, that by itself, or through subcontracts with one or more entities, undertakes to arrange for or to provide medical care or health care to an enrollee in exchange for a predetermined payment on a prospective basis and that accepts responsibility to perform on behalf of the HMO any function regulated by the Act. The term does not include an individual physician or a group of employed physicians practicing medicine under one federal tax identification number and whose total claims paid to providers not employed by the group is less than 20 percent of the total collected revenue of the group calculated on a calendar year basis.
(3) Delegated network--Any 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 an HMO.
(4) Delegated third party--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 to perform any function regulated by the Act; or
(B) receive, handle, or administer funds, if the receipt, handling, or administration of the funds is directly or indirectly related to a function regulated by the Act.
(5) Health Care--Any services, including the furnishing to any individual of pharmaceutical services, medical, chiropractic, or dental care, or hospitalization, or incident to the furnishing of such services, care, or hospitalization, as well as the furnishing to any person of any and all other services for the purpose of preventing, alleviating, curing or healing human illness or injury.
§11.2612. Applicability. This subchapter applies to all contracts entered into, renewed or amended on and after the effective date of these rules.
Requirements for Delegation by HMO's (Texas)
§11.2603. Requirements for Delegation by HMOs.
(a) Any delegation of any function pursuant to Texas Insurance Code Art. 20A.18C by an HMO shall comply with this subchapter.
(b) Oversight by the department does not relieve the HMO of responsibility for monitoring and oversight of its delegated entities.
(c) Prior to entering into, renewing or amending a delegation agreement, an HMO shall make a reasonable effort to evaluate the delegated entity's current and prospective ability to perform the functions to be delegated, including, but not limited to, the solvency and financial operations of the delegated entity and the projected financial effects of the agreement upon the delegated entity.
(d) An HMO that delegates functions to a delegated entity must have a written contingency plan to resume any and all delegated functions, including, as applicable:
(1) quality of care;
(2) continuity of care, including a plan for transferring enrollees to new providers in the event of termination of the delegation agreement; and
(3) processing, adjudication and payment of claims.
(e) The department may require an HMO to immediately terminate any delegation agreement to ensure that the HMO is in compliance with the Act.
(f) The HMO retains ultimate responsibility for any and all functions delegated.
(g) A delegated entity's failure to comply with applicable statutes or rules constitutes a violation of the Act by the delegating HMO.
(h) An HMO is responsible for monitoring each delegated entity with which it contracts to ensure compliance with all applicable statutes and rules, as well as for solvency.
(i) An HMO shall report to the department, within a reasonable time, all penalties assessed against a delegated entity under the provisions of the delegation agreement.
(j) If an HMO cannot ensure that a delegated entity is performing all delegated functions in accordance with all applicable statutes, rules, or an order issued by the department pursuant to this subchapter, the HMO shall resume all delegated functions from the delegated entity.
(k) If a license is required for any function delegated by an HMO, the HMO must ensure that the delegated entity or third party performing the function has a current appropriate license.
(l) Upon termination of a delegation agreement by either party, the HMO shall notify the department.
Delegation Agreements (Texas
§11.2604. Delegation Agreements - General Requirements and Information to be provided to HMO.
(a) An HMO that delegates to a delegated entity any function required by the Act shall execute a written agreement with that delegated entity.
(b) Written agreements shall include the following:
(1) a provision that the delegated entity and any delegated third parties must agree to comply with all statutes and rules applicable to the functions being delegated by the HMO;
(2) a provision that the HMO shall monitor the acts of the delegated entity through a monitoring plan. The monitoring plan shall be set forth in the delegation agreement, and must contain, at a minimum:
(A) provisions for the review of the delegated entity's solvency status and financial operations. This shall include, at a minimum, review of the delegated entity's financial statements, consisting of at least a balance sheet, income statement, and statement of cash flows for the current and preceding year;
(B) provisions for the review of the delegated entity's compliance with the terms of the delegation agreement as well as with all applicable statutes and rules affecting the functions delegated by the HMO under the delegation agreement;
(C) a description of the delegated entity's financial practices in sufficient detail that will ensure that the delegated entity tracks and timely reports to the HMO liabilities including incurred but not reported obligations;
(D) a method by which the delegated entity shall report monthly a summary of the total amount paid by the delegated entity to physicians and providers under the delegation agreement; and
(E) a monthly log, maintained by the delegated entity, of oral and written complaints from physicians, providers, and enrollees regarding any delay in payment of claims or nonpayment of claims pertaining to the delegated function, including the status of each complaint;
(3) a statement that the HMO shall utilize the monitoring plan on an ongoing basis. Compliance with this requirement shall be documented by the HMO maintaining, at a minimum:
(A) periodic signed statements from the individual identified by the HMO in paragraph (23) of this subsection that the HMO has reviewed the information required in the monitoring plan; and
(B) periodic signed statements from the chief financial officer of the HMO acknowledging that the most recent financial statements of the delegated entity have been reviewed.
(4) a provision establishing the penalties to be paid by the delegated entity for failure to provide information required by this subchapter;
(5) a provision requiring quarterly assessment and payment of penalties under the agreement, if applicable;
(6) a provision that the agreement cannot be terminated without cause by the delegated entity or the HMO without written notice provided to the other party and the department before the 90th day preceding the termination date, provided that the commissioner may order the HMO to terminate the agreement under §11.2608 of this subchapter (relating to Department May Order Corrective Action);
(7) a provision that requires the delegated entity, and any entity or physician or provider with which it has contracted to perform a function of the HMO, to hold harmless an enrollee under any circumstance, including the insolvency of the HMO or delegated entity, for payments for covered services other than copayments and deductibles authorized under the evidence of coverage;
(8) a provision that the delegation agreement may not be construed to limit in any way the HMO's responsibility, including financial responsibility, to comply with all statutory and regulatory requirements;
(9) a provision that any failure by the delegated entity to comply with applicable statutes and rules or monitoring standards shall allow the HMO to terminate delegation of any or all delegated functions;
(10) a provision that the delegated entity must permit the commissioner to examine at any time any information the department reasonably considers is relevant to:
(A) the financial solvency of the delegated entity; or
(B) the ability of the delegated entity to meet the entity's responsibilities in connection with any function delegated to the entity by the HMO;
(11) a provision that 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 paragraph (10) of this subsection;
(12) a provision that the delegated entity shall provide the license number of any delegated third party performing any function that requires a license as a third party administrator under Texas Insurance Code Art. 21.07-6, or a license as a utilization review agent under Texas Insurance Code Art. 21.58A, or that requires any other license under the Texas Insurance Code or another insurance law of this state;
(13) if utilization review is delegated, a provision stating that:
(A) enrollees will receive notification at the time of enrollment identifying the entity that will be performing utilization review;
(B) the delegated entity or delegated third party performing utilization review shall do so in accordance with Texas Insurance Code Art. 21.58A and related rules; and
(C) utilization review decisions made by the delegated entity or a delegated third party shall be forwarded to the HMO on a monthly basis;
(14) a provision that any agreement in which the delegated entity directly or indirectly delegates to a delegated third party any function delegated to the delegated entity by the HMO pursuant to Texas Insurance Code Art. 20A.18C, including any handling of funds, shall be in writing;
(15) a provision that upon any subsequent delegation of a function by a delegated entity to a delegated third party, the executed updated agreements shall be filed with the department and enrollees shall be notified of the change of any party performing a function for which notification of an enrollee is required by this chapter or the Act;
(16) an acknowledgment and agreement by the delegated entity that the HMO is not precluded from requiring that the delegated entity provide any and all evidence requested by the HMO or the department relating to the delegated entity's or delegated third party's financial viability;
(17) a provision acknowledging that any delegated third party with which the delegated entity subcontracts will be limited to performing only those functions set forth and delegated in the agreement, using standards approved by the HMO and that are in compliance with applicable statutes and rules;
(18) a provision that any delegated third party is subject to the HMO's oversight and monitoring of the delegated entity's performance and financial condition under the delegation agreement;
(19) a provision that requires the delegated entity to make available to the HMO samples of each type of contract the delegated entity executes or has executed with physicians and providers to ensure compliance with the contractual requirements described by paragraphs (6) and (7) of this subsection, except that the agreement may not require that the delegated entity make available to the HMO contractual provisions relating to financial arrangements with the delegated entity's physicians and providers;
(20) a provision that requires the delegated entity to provide information to the HMO on a quarterly basis and in a format determined by the HMO to permit an audit of the delegated entity and to ensure compliance with the department's reporting requirements with respect to any functions delegated by the HMO to the delegated entity and to ensure that the delegated entity remains solvent to perform the delegated functions, including:
(A) a summary:
(i) describing any payment methods, including capitation or fee-for-services, that the delegated entity uses to pay its physicians and providers and any other third party performing a function delegated by the HMO; and
(ii) of the breakdown of the percentage of physicians and providers and any other third party paid by each payment method listed in clause (i) of this subparagraph;
(B) the period of time that claims and any other obligations for health care filed with the delegated entity, under this and any other delegation agreements to which the delegated entity is a party, have been pending but remain unpaid, divided into categories of 0-45 days, 46-90 days, and 91 or more days. The summary shall include aggregate information for all delegation agreements entered into by the delegated entity and information for the specific delegation agreement entered into between the parties;
(C) the aggregate dollar amount of claims and other obligations for health care owed by the delegated entity to any physician or provider;
(D) information that the HMO requires in order to file claims for reinsurance, coordination of benefits, and subrogation; and
(E) 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) any regulatory agency's inquiry or investigation of the delegated entity or of an individual physician or provider with whom the delegated entity contracts that relates to an enrollee of the HMO; and
(ii) the final resolution of any regulatory agency's inquiry or investigation;
(21) a provision relating to enrollee complaints that requires the delegated entity to ensure that upon receipt of a complaint, as defined in the Act, a copy of the complaint shall be sent to the HMO within two business days, except that in a case in which a complaint involves emergency care, as defined in the Act, the delegated entity shall forward the complaint immediately to the HMO, and provided that nothing in this paragraph prohibits the delegated entity from attempting to resolve a complaint;
(22) a provision that the HMO, the delegated entity and any delegated third party shall comply with the provisions of Chapter 22 of this title;
(23) a provision identifying an officer of the HMO as the representative of the HMO for all matters related to the delegation agreement; and
(24) a provision identifying which party to the agreement shall bear the expense of compliance with each requirement set forth in this subsection, including the cost of any examinations performed pursuant to this subchapter.
§11.2605. Delegation Agreements - Information to be Provided by HMO to Delegated Entity.
(a) An HMO shall provide to each delegated entity with which the HMO has a delegation agreement, at least monthly unless otherwise stated in the agreement and provided in standard electronic format agreed to by the parties, the following information:
(1) the name and either the date of birth or social security number of each enrollee of the HMO who is eligible or assigned to receive health care from the delegated entity, including the enrollees added and terminated since the previous reporting period;
(2) the age, sex, evidence of coverage and any riders to that evidence of coverage, and if applicable the name of the employer, for the enrollees of the HMO who are eligible or assigned to receive health care from the delegated entity;
(3) a summary of the number and amount of claims paid by the HMO on behalf of the delegated entity during the previous reporting period. However, an HMO is not precluded from providing, upon request, additional nonproprietary information regarding such claims, if the HMO pays any claims for the delegated entity;
(4) a summary of the number and amount of pharmacy prescriptions paid for each enrollee for which the delegated entity has taken partial risk during the previous reporting period, provided that an HMO is not precluded from providing, upon request, additional nonproprietary information regarding such claims, if the HMO pays any claims for the delegated entity;
(5) information that is needed by the delegated entity to file claims for reinsurance, coordination of benefits, and subrogation; and
(6) patient complaint data that relates to the delegated entity.
(b) An HMO shall provide to each delegated entity with which the HMO has a delegation agreement the following information, as applicable, provided in standard electronic format agreed to by the parties at least quarterly unless otherwise stated in the agreement:
(1) detailed risk-pool data, reported quarterly and on settlement, sufficient to allow the delegated entity to adequately monitor its position in the risk pool; and
(2) the percent of premium attributable to hospital or facility costs, if hospital or facility costs impact the delegated entity's costs and, if there are changes in hospital or facility contracts with the HMO, the projected impact of those changes on the percent of premium attributable to hospital and facility costs within 30 days of such changes.
Filing of Delegation Agreements (Texas)
§11.2611. Filing of Delegation Agreements.
(a) An HMO shall file the written executed agreement described in this subchapter and any subsequently executed amendments to the agreement with the department not later than the 30th day after the date the agreement or amendment is executed.
(b) The copy of the executed agreement shall be filed for information in accordance with §11.301 of subchapter D of this title (relating to Filing Requirements).
(c) Every agreement shall include, as an attachment, a table of contents that allows the department to track the agreement's compliance with the requirements of §§11.2604 (relating to Delegation Agreements - General Requirements and Information to be Provided to HMO) and 11.2605 (relating to Delegation Agreements Information to be Provided by HMO to Delegated Entity) of this subchapter.
(d) Upon notification from the department of a deficiency in a delegation agreement or filing required under this subchapter, the HMO shall respond within ten business days with a proposed correction for the defect.
Reporting Requirements (Texas)
§11.2606. Reporting Requirements.
(a) Upon receipt of a financial statement indicating that a delegated entity or delegated third party has an amount of total liabilities greater than its total assets, the HMO shall immediately forward a copy of the financial statement to the department.
(b) An HMO that becomes aware of any information, including the information described in subsection (a) of this section, that suggests or indicates that the delegated entity or delegated third party is not operating in accordance with its written agreement or is operating in a condition that may render the continuance of its business hazardous to the enrollees, shall immediately:
(1) notify the delegated entity in writing of those findings; and
(2) request, in writing, a written explanation with supporting documentation of:
(A) the delegated entity's or delegated third party's apparent noncompliance with the written agreement; or
(B) the existence of the condition that apparently renders the continuance of the delegated entity's or delegated third party's business hazardous to the enrollees.
(c) A delegated entity shall respond in writing to a request from an HMO under subsection (b) of this section not later than the 30th day after the date the request is received. The response shall include a corrective action plan.
(d) A copy of all written communications required by subsections (b) and (c) of this section shall be sent to the department simultaneously with transmission to the HMO or delegated entity or delegated third party.
(e) The HMO shall cooperate with the delegated entity to correct any failure by the delegated entity to comply with the applicable statutes and rules relating to any matters:
(1) delegated to the delegated entity by the HMO; or
(2) necessary for the HMO to ensure compliance with statutory or regulatory requirements.
Examinations (Texas)
§11.2607. Examinations of Delegated Entities.
(a) On receipt of a notice under §11.2606 of this title (relating to Reporting Requirements), or as otherwise permitted under the Texas Insurance Code or rules adopted thereunder, the department may examine any matter relating to the financial solvency of the delegated entity or delegated third party or the delegated entity's ability to meet its responsibilities under the delegation agreement.
(b) The department may request documents, perform on-site examinations and require any other action of the delegated entity and any delegated third party that the department determines necessary to perform an examination under this section.
(c) A delegated entity's failure to comply with a request under subsection (b) of this section may result in:
(1) notification to the HMO that the delegated entity is subject to penalties pursuant to the delegation agreement;
(2) entry of an order by the commissioner to resume or redelegate any functions delegated to the delegated entity or terminate the agreement in its entirety.
(d) The department shall issue a report to the delegated entity and HMO upon completion of the department's examination. The report shall detail the results of the examination and any corrective actions necessary by the delegated entity and/or the HMO.
(e) The delegated entity and the HMO shall respond to the department's report and submit a corrective action plan to the department not later than the 30th day after the date of receipt of the department's report.
Corrective Action (Texas)
§11.2608. Department May Order Corrective Action.
(a) The department may require at any time that a delegated entity take corrective action to comply with the department's statutory and regulatory requirements that:
(1) relates to any matters delegated by the HMO to the delegated entity;
(2) is necessary to ensure the HMO's compliance with statutory and regulatory requirements; or
(3) relates to the financial solvency and operations of the delegated entity.
(b) The commissioner may order the HMO to take any action the commissioner determines is necessary to ensure that the HMO maintains compliance with the Act, including but not limited to:
(1) resumption of any or all functions delegated to the delegated entity, including claims processing, adjudication, and payments for health care previously rendered to enrollees of the HMO;
(2) temporarily or permanently ceasing assignment of new enrollees to the delegated entity;
(3) temporarily or permanently transferring enrollees to alternative delivery systems to receive health care; or
(4) termination of the HMO's delegation agreement with the delegated entity.
Reserve Requirements (Texas)
§11.2609. Reserve Requirements for Delegated Networks. In addition to any other requirements set forth in this subchapter, HMOs that contract with delegated networks shall ensure that the delegated network complies with Texas Insurance Code Art. 20A.18D. The HMO's agreement with the delegated network shall include a provision:
(1) that records related to the requirements of Texas Insurance Code Art. 20A.18D shall be accessible at all times to the HMO;
(2) requiring all financial records and related information necessary to show the delegated network's compliance with the requirements of Texas Insurance Code Art. 20A.18D;
(3) making the records described in paragraph (1) of this section available to the department upon request; and
(4) that records be kept providing evidence that the HMO has adequately monitored the delegated network for compliance with the requirements of Texas Insurance Code Art. 20A.18D.
I.C. Art. 20A.18D - Reserve requirements for delegated network.
(a) A delegated network shall establish and maintain reserves that are adequate for the liabilities and risks assumed by the delegated network, as computed in accordance with accepted standards, practices, and procedures relating to the liabilities and risks reserved for, including known and unknown components and anticipated expenses of providing benefits or services.
(b) Except as provided by Subsections (c) and (d), the delegated network shall establish and maintain reserves as described by Subsection (e)(1) or (2) only with respect to the portion of services assumed under the delegation agreement that are not within the scope of the network's license for medical care or hospital or other institutional services, as applicable.
(c) If the scope of services assumed under the delegation agreement includes both medical care and hospital or institutional services, the delegated network shall establish and maintain reserves that are adequate to cover the liabilities and risks associated with medical care or with hospital or institutional services, whichever type of services has been allocated the largest portion of the premium by the health maintenance organization.
(d) If the delegated network assumes financial risk for medical care or hospital or institutional services and for prescription drugs, as defined by Section 551.003, Occupations Code, the network shall establish and maintain reserves that are adequate to cover the liabilities and risks associated with the prescription drug benefits, in addition to any other reserves required under this section.
(e) A delegated network shall maintain financial reserves equal to the greater of:
(1) 80 percent of the risk and liabilities that must be reserved under this section and that have been incurred but not paid by the delegated network; or
(2) two months of premium amount assumed by the delegated network for services that must be reserved under this section.
(f) The reserves required under this section must be secured by and only consist of legal tender of the United States or bonds of the United States or this state. The reserves must be held at a financial institution in this state that is chartered by the United States or this state. The reserves must be held in trust for, for the benefit of, or to provide health care services to, enrollees of the health maintenance organization under the agreement between the health maintenance organization and the delegated network.
(g)(1) A delegated network required to establish and maintain reserves under this section shall establish an escrow account for the payment of claims and deposit such reserves into the escrow account upon providing notice of its intent to terminate or non-renew a contract through which the delegated network assumed liabilities and risks from a health maintenance organization. Upon the establishment of the escrow account, the delegated network shall notify the commissioner.
(2) A delegated network required to establish and maintain reserves under this section shall establish an escrow account for the payment of claims and deposit such reserves into the escrow account upon the modification of a contract through which the delegated network assumed liabilities and risks from a health maintenance organization if the modified contract eliminates the liabilities and risks previously assumed by the delegated network. Upon the establishment of the escrow account, the delegated network shall notify the commissioner.
(3) Two hundred seventy days after the date the reserves are deposited into the escrow account, the delegated network shall be entitled to the release of the remaining amounts held in escrow.
(4) The amounts released from the escrow account shall be distributed to those individuals who contributed to the reserves deposited into escrow in proportion to the individuals' total contribution.
(5) The commissioner shall, and has the authority to, take any action necessary to ensure the release of any amounts remaining in escrow in excess of the 270-day time period in Subsection (g)(3).
(h) This section does not apply to a group model health maintenance organization, as defined by Section 6A of this Act.
Non-Compliance (Texas)
§11.2610. Penalties for Non-Compliance.
(a) Failure of any party to any agreement under this subchapter to comply with any requirement of this subchapter may result in an order from the commissioner that the HMO must terminate the delegation agreement and/or resume or redelegate any or all delegated functions as well as the imposition of penalties provided under the Texas Insurance Code and applicable rules adopted thereunder.
(b) Any action by an HMO relating to a delegation agreement that does not comply with this subchapter or takes place pursuant to a provision of a delegation agreement not in compliance with this subchapter constitutes a violation under this such.
|
|
