HBA-DMH H.B. 2827 77(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 2827 By: Smithee Insurance 4/8/2001 Introduced BACKGROUND AND PURPOSE A list of physicians and providers divided by specialty or provider type is usually included in the material that a health maintenance organization (HMO) or preferred provider benefit plan (PPO) provides to current and prospective enrollees or insureds. There may be limitations or conditions that apply to the use of specialty physicians or providers that are not applicable to other physicians or providers. However, HMOs and PPOs do not always disclose these limitations and conditions and such omissions may mislead people who are selecting a health benefit plan. Additionally, some HMOs and PPOs attempt to encourage enrollees and insureds to use the services of a particular physician or provider without disclosing this information. House Bill 2827 expands the disclosure requirements for HMOs and PPOs. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that this bill does not expressly delegate any additional rulemaking authority to a state officer, department, agency, or institution. ANALYSIS House Bill 2827 amends the Insurance Code to require each health maintenance organization (HMO) to provide an accurate written disclosure of any limitation or condition on enrollee access to a specialty physician or provider in the HMO's health care plan terms and conditions, current list of physicians and providers, and handbook to allow a current or prospective group contract holder and current or prospective enrollee eligible for enrollment in a health care plan to make comparisons and informed decisions before selecting among health care plans. The bill requires each preferred provider benefit plan (PPO) to provide an accurate written disclosure of such information in the PPO's health care plan policy, current list of preferred providers, and handbook. The bill requires an HMO or PPO to disclose any practice used by the HMO or PPO to attempt to persuade, direct, or otherwise encourage an enrollee or an insured to use the services of a particular physician or provider and the identity of those physicians or providers. The bill prohibits an HMO or PPO from limiting or conditioning an enrollee's or insured's access to any physician or provider or from attempting to persuade, direct, or otherwise encourage an enrollee or insured to use the services of a particular physician or provider, unless the HMO or PPO has made the required disclosure. The bill provides a description of a standard disclosure statement. The bill modifies mandatory disclosure requirements for PPOs by requiring a current list of preferred providers to be updated and provided to all insureds at least quarterly, rather than annually. EFFECTIVE DATE September 1, 2001. The Act applies only to an insurance policy, contract, or evidence of coverage delivered, issued for delivery, or renewed on or after January 1, 2002.