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Senate Interim Committee on Managed Care and Consumer Protections

Review the adequacy of consumer protections available through managed health care and the need to enhance those protections through statutory revision.

The trend toward managed care has significantly changed the delivery of health care in the United States. While indemnity policies have the advantage of offering consumers greater choices in health care services, managed care has resulted in cost savings that make quality health care available to more people. The Texas managed care market has grown over the last four years, with the number of HMO enrollees increasing by 64 percent since 1992. There are currently 40 basic service HMOs and 16 single service HMOs, with 12 percent of the Texas health care market. But the committee concluded that it is imperative that the cost containment resulting from a competitive HMO industry not reduce or endanger access to quality health care services.
Findings and Recommendations

The report makes a number of recommendations designed to protect consumers by amending existing statutes and codifying agency rules in the following areas: determination of medical necessity, access to care, consumer protections, quality of care, physician and provider contracts, licensing regulations, and solvency regulations. The recommendations include:

  • Managed care organizations should be held accountable for negligent decisions which result in injury to an enrollee of the plan because of the denial of medically necessary treatment.

  • Amend the HMO Act to clarify that the Insurance Commissioner has rulemaking authority to establish minimum physician/patient ratios, mileage requirements for primary and specialty care, and maximum waiting times for scheduled appointments.

  • Amend the HMO Act to prohibit an HMO from including any provision which excludes or limits initial coverage of a newborn infant or adopted newborn infant for a period of time, or limits or excludes congenital defects of a newborn child or adopted newborn child.

  • Amend the Medical Practice Act to prohibit physicians from accepting financial incentives or payments which act directly or indirectly as inducements to limit medically necessary services.