Daniel Kruger 2015-08-25 10:50:44
The 84th session of the Texas Legislature enacted numerous changes to the Texas Insurance Code, many of which increased consumer protection in the State of Texas. Several of these updates are discussed more fully in this article. Delivery of Insurance Policies Chapter 525 has been added to the Insurance Code. It requires personal automobile or residential property insurance companies, the Texas Windstorm Insurance Association, the FAIR Plan Association, and the Texas Automobile Insurance Plan Association to deliver a policy to the policyholder, or to the insurer’s agent for delivery to the policyholder, not more than (a) 30 days after the effective date if the policy term is more than 30 days; (b) the 10th day after the effective date if the policy term is more than 10 days but fewer than 31; or (c) within the policy period for a policy with a term of 10 days or fewer. An insurer to whom this chapter applies is required to deliver a renewed or amended policy to the policyholder or to the agent not later than 15 days after receiving such a written request.1 Consumer Inquiry Chapter 544 has been expanded to apply to standard fire, homeowner’s, or farm and ranch owner’s insurance policies and also to include a farm mutual insurance company, a county mutual insurance company, a Lloyd’s plan, and a reciprocal or interinsurance exchange.2 The insurer is now prohibited from: (a) using an underwriting guideline or increasing a rate based solely on whether a consumer inquiry has been made, or (b) charging a rate that is different from the rate charged to other individuals for the same coverage. In addition, insurers are now prohibited from assigning a rate consequence solely to a consumer inquiry or a claim filed by an insured under a personal automobile insurance policy that is not paid.3 Unfair Methods of Competition Regarding Discount Health Care Programs It is now an unfair method of competition or an unfair or deceptive act or practice for a discount health care program operator to require a pharmacy or pharmacist to: (a) participate in a specified provider network as a condition of processing a claim for prescription drugs under the discount health care program, or (b) participate in, or process claims under, a discount health care program as a condition of participation in a provider network.4 It is also unfair or deceptive for a discount health care program operator to pay any consideration to a health care service provider or an employee of a provider in order to: (a) encourage an individual to claim a discount for prescription drugs under a discount health care program, or (b) include discount health care program information on a prescription for a drug or in accompanying materials.5 It is also unfair or deceptive for a program operator to provide written prescription forms that could reasonably mislead an individual to believe that the program is or provides coverage similar to health insurance.6 Health Maintenance Organization An HMO is now prohibited from: (a) terminating participation of a physician or provider solely because they inform an enrollee of the full range of physicians and providers available,7 and (b) requiring a physician, dentist, or provider to notify a current, prospective, or former patient, or a person designated by the patient, that the provider is out-of-network if the notifying form is intended or presented in a manner that is intended to intimidate the patient.8 Annuity Contracts Due to the amendment of Chapter 1116, the commissioner is now authorized to adopt reasonable standards for contingent deferred annuity contracts, including: (a) standards for the review and approval by the Department of Insurance, and (b) criteria to be used in approving the contracts as well as replacement, suitability, and disclosure requirements that are consistent with regulations from the National Association of Insurance Commissioners (this will include the advertising of contracts).9 Coordination of Dental Benefits Chapter 1203 now includes insurance policies that provide dental benefits (not separate dental policies that exclusively provide noncoordinated fixed indemnity benefits for dental care).10 If an insured is covered by at least two insurance policies that provide dental benefits, the primary insurance company must exhaust its benefits before the secondary insurer is required to pay for services that exceed the primary’s limits. An insurance company subject to this provision may not deliver, issue for delivery, or renew a policy if it uses the following reasons to exclude or reduce the payment of dental benefits: (a) the dental benefits are payable, or have been paid to or on behalf of the insured, under another policy; and (b) the exclusion or reduction would apply before the full amount of the expenses covered by both policies have been paid.11 Any provision that violates this section is void.12 Preferred Provider Benefit Plan In Preferred Provider Programs, insurers provide payment for an above-basic level of coverage. If the insured person uses a preferred provider, an insurance company may not prohibit or attempt to prohibit, penalize, terminate, or otherwise restrict that preferred provider from communicating with the insured about the availability of out-of-network providers.13 An insurer may not terminate the contract of or otherwise penalize a preferred provider solely because the provider’s patients use out-of-network providers.14 The insurance company’s contract with the preferred provider may require that, before making an out-of-network referral, the preferred provider inform the insured that he or she: (a) may choose a preferred provider or an out-of-network provider, and (b) may incur higher out-of-pocket expenses if choosing the out-of-network provider. The preferred provider must inform the insured if it has a financial interest in the out-of-network provider.15 An insurer may not require a physician or provider to furnish a current, prospective, or former patient, or a person designated by the patient, with a notification form stating that the physician or provider is out-of-network if the form contains information or is presented in a manner that is intended to intimidate the patient.16 Access to Optometrists and Ophthalmologists Chapter 1451 now prohibits a managed care plan from directly or indirectly: (a) controlling or attempting to control the professional judgment, manner of practice, or practice of an optometrist or therapeutic optometrist; (b) employing an optometrist or therapeutic optometrist to provide a vision care product or service; (c) paying an optometrist or therapeutic optometrist for a service not provided; (d) restricting or limiting choice of sources or suppliers of services or materials; or (e) requiring an optometrist or therapeutic optometrist to disclose a patient’s protected health information unless authorized by the patient or permitted under federal law.17 Optometrists or therapeutic optometrists must now disclose any business interest they have in an out-of-network supplier or manufacturer to which they refer the patient.18 Cost for Pharmacy Drug Benefit Chapter 1369 has been expanded to require a health benefit plan issuer or pharmacy benefit manager to: (a) disclose to a pharmacist or pharmacy (upon entering into a contract or upon request) the sources of data used in formulating maximum allowable cost prices,19 (b) establish a process that will eliminate drugs from maximum allowable cost lists or modify maximum allowable costs prices to remain consistent with changes in pricing data,20 (c) provide a process that readily accesses the applicable maximum allowable cost list,21 and (d) provide a procedure for pharmacists or pharmacies to appeal a drug’s maximum allowable cost price 10 or fewer days after making a pharmacy benefit claim for the drug.22 The health benefit plan issuer or pharmacy benefit plan manager is also prohibited from charging or holding a pharmacist or pharmacy responsible for a fee related to the claim adjudication process.23 Tests for Ovarian and Cervical Cancer Chapter 1370 now requires that a health benefit plan covering diagnostic medical procedures must cover expenses for annual diagnostic examinations for the early detection of ovarian cancer or cervical cancer.24 Disclosure of Provider Status The definition of “facility-based physician” has been expanded to include an assistant surgeon.25 If the facility-based physician bills a patient covered by a preferred provider plan or a non-contracted plan, the billing statement shall contain a conspicuous, plain-language explanation of the mandatory mediation process available under Chapter 1467 if the amount owed is greater than $500.26 Digital Network Drivers Chapter 1954 has been added to require that companies using a digital network to connect individuals with company drivers who provide fee-based prearranged rides carry insurance polices with: (a) a minimum coverage with a total aggregate limit of liability of $1 million for death, bodily injury, and property damage for each incident; (b) uninsured or underinsured motorist coverage; and (c) personal injury protection coverage.27 The company driver is required to carry proof of insurance that satisfies this requirement.28 The company is required to disclose to the driver that a personal automobile insurance company is allowed to exclude coverage for any loss or injury that occurs while employed as a company driver.29 Title Insurance Escrow Officer Title insurance companies now must appoint escrow agents and file a written appointment with the Department of Insurance on the form provided.30 The department is required to make available to the public the name of each escrow officer, the license number, continuing education compliance status, and appointment history.31 The appointment form must: (a) certify that the individual is a bona fide employee of the agent or direct operation making the appointment, (b) certify that the agent or direct operation has an office in Texas, (c) be signed and sworn to by the agent or direct operation and by the escrow officer, and (d) certify that the escrow officer is covered by a surety bond or deposit.32 Licensed Public Insurance Adjuster A public insurance adjuster is now prohibited from: (a) directly or indirectly soliciting employment for an attorney, or (b) entering into a contract with an insured for the primary purpose of providing an attorney referral and without intending to perform services customary of licensed public insurance adjusters. This provision does not prohibit a public insurance adjuster from recommending a particular attorney,33 but does prohibit the adjuster from having an insured sign a representation agreement34 and from accepting a valuable consideration in exchange for the referral to any attorney, appraiser, umpire, construction company, contractor, or salvage company.35 The Deceptive Trade Practices Act has been amended accordingly.36 Expedited Review by a Utilization Review Agent When individuals are denied prescription drugs or intravenous infusions for which they were receiving health insurance policy benefits, a notice of an adverse determination must now include a description of the right to an immediate review by an independent organization. 37 The review must be conducted not later than 30 days before the prescriptions or infusions will be discontinued. 38 The procedure for appealing an adverse determination must include a review by a health care provider that has not previously reviewed the case and that is of the same or a similar specialty as the health care provider that would typically manage the condition, procedure, or treatment.39 Direct Primary Care Physicians who agree to provide direct, ongoing primary care services for a patient in exchange for a direct fee from the patient may not bill an insurance company or a health maintenance organization for direct primary care that is paid pursuant to the medical service agreement. 40 A physician providing direct primary care is not considered an insurer or health maintenance organization, and the physician is not subject to regulation by the Texas Department of Insurance for the direct primary care, nor is a medical service agreement considered a health or accident insurance policy.41 Notes 1). Texas Insurance Code, Section 525.002. 2). Texas Insurance Code, Section 544.552. 3). Texas Insurance Code, Section 1953.051. 4). Texas Insurance Code, Section 562.055. 5). Texas Insurance Code, Section 562.056. 6). Texas Insurance Code, Section 562.056(b). 7). Texas Insurance Code, Section 843.306(f). 8). Texas Insurance Code, Section 843.363(a-1). 9). Texas Insurance Code, Section 1116.003. 10). Texas Insurance Code, Section 1203.051. 11). Texas Insurance Code, Section 1203.053. 12). Texas Insurance Code, Section 1203.054. 13). Texas Insurance Code, Section 1301.0058(a). 14). Texas Insurance Code, Section 1301.0058(b). 15). Texas Insurance Code, Section 1301.0058(d). 16). Texas Insurance Code, Section 1301.067(a-1). 17). Texas Insurance Code, Section 1451.156(a). 18). Texas Insurance Code, Section 1451.156(e). 19). Texas Insurance Code, Section 1369.354(c). 20). Texas Insurance Code, Section 1369.355. 21). Texas Insurance Code, Section 1369.356. 22). Texas Insurance Code, Section 1369.357. 23). Texas Insurance Code, Section 1369.402. 24). Texas Insurance Code, Section 1370.003(a). 25). Texas Insurance Code, Section 1456.001(3) and Health and Safety Code, Section 324.001(8). 26). Texas Insurance Code, Section 1456.004(c). 27). Texas Insurance Code, Section 1954.052. 28). Texas Insurance Code, Section 1954.056. 29). Texas Insurance Code, Section 1954.101. 30). Texas Insurance Code, Section 2652.002. 31). Texas Insurance Code, Section 2652.006. 32). Texas Insurance Code, Section 2652.1511(b). 33). Texas Insurance Code, Section 4102.158(d). 34). Texas Insurance Code, Section 4102.158(e). 35). Texas Insurance Code, Section 4102.164. 36). Texas Business and Commerce Code, Section 17.46(b)(31). 37). Texas Insurance Code, Section 4201.303(c). 38). Texas Insurance Code, Section 4201.304(b). 39). Texas Insurance Code, Section 4201.357(a-1). 40). Texas Occupations Code, Section 162.254. 41). Texas Occupations Code, Section 162.253.
Published by State Bar of Texas. View All Articles.
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