SB 742

relating to the adequacy and effectiveness of managed care plan
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1.  Section 108.002(9), Health and Safety Code, is
(9)  "Health benefit plan" means a plan provided by:
(A)  a health maintenance organization;
(B)  a preferred provider or exclusive provider
benefit plan issuer under Chapter 1301, Insurance Code; or
(C) [(B)]  an approved nonprofit health
corporation that is certified under Section 162.001, Occupations
Code, and that holds a certificate of authority issued by the
commissioner of insurance under Chapter 844, Insurance Code.
SECTION 2.  Section 501.001, Insurance Code, is amended to
Sec. 501.001.  DEFINITIONS [DEFINITION].  In this chapter:
(1)  "Managed care plan" means:
(A)  a health maintenance organization plan
(B)  a preferred provider benefit plan, as defined
(C)  an exclusive provider benefit plan, as
(2)  "Office" [, "office"] means the office of public
SECTION 3.  Section 501.151, Insurance Code, is amended to
Sec. 501.151.  POWERS AND DUTIES OF OFFICE.  The office:
(1)  may assess the impact of insurance rates, rules,
and forms on insurance consumers in this state; [and]
(2)  shall advocate in the office's own name positions
determined by the public counsel to be most advantageous to a
substantial number of insurance consumers;
(3)  shall monitor the adequacy of networks offered by
managed care plans in this state by reviewing related filings,
applications, and requests, including filings, applications, and
requests related to access plans or waivers of network adequacy
requirements, for accuracy, accessibility of health care services,
and reasonable access to covered benefits; and
(4)  may advocate for consumers in the office's own
(A)  positions to strengthen the overall adequacy
or oversight of networks offered by managed care plans in this
(B)  positions to strengthen the adequacy or
oversight of a particular network offered by a managed care plan in
SECTION 4.  Section 501.153, Insurance Code, is amended to
Sec. 501.153.  AUTHORITY TO APPEAR, INTERVENE, OR INITIATE.
(1)  may appear or intervene, as a party or otherwise,
as a matter of right before the commissioner or department on behalf
of insurance consumers, as a class, in matters involving:
(A)  rates, rules, and forms affecting:
(i)  property and casualty insurance;
(iv)  credit accident and health insurance;
(v)  any other line of insurance for which
the commissioner or department promulgates, sets, adopts, or
approves rates, rules, or forms;
(B)  rules affecting life, health, or accident
(C)  a managed care plan's ability to provide
accessible health care services and reasonable access to covered
(D)  withdrawal of approval of policy forms:
(i)  in proceedings initiated by the
department under Sections 1701.055 and 1701.057; or
(ii)  if the public counsel presents
persuasive evidence to the department that the forms do not comply
with this code, a rule adopted under this code, or any other law;
(2)  may initiate or intervene as a matter of right or
otherwise appear in a judicial proceeding involving or arising from
an action taken by an administrative agency in a proceeding in which
the public counsel previously appeared under the authority granted
(3)  may appear or intervene, as a party or otherwise,
as a matter of right on behalf of insurance consumers as a class in
any proceeding in which the public counsel determines that
insurance consumers are in need of representation, except that the
public counsel may not intervene in an enforcement or parens
patriae proceeding brought by the attorney general; [and]
(4)  may appear or intervene before the commissioner or
department as a party or otherwise on behalf of small commercial
insurance consumers, as a class, in a matter involving rates,
rules, or forms affecting commercial insurance consumers, as a
class, in any proceeding in which the public counsel determines
that small commercial consumers are in need of representation; and
(5)  may file objections and request a hearing
regarding any application, filing, or request that a managed care
plan files with the department related to an access plan or waiver
of a network adequacy requirement, including an application,
filing, or request that is currently pending or that has already
(b)  To assist the office in determining whether to request a
hearing under Subsection (a)(5), the office is entitled to:
(1)  review all relevant filings and information that a
managed care plan submits to the department, including
communications related to the filing; and
(2)  communicate with a managed care plan regarding a
submission described by Subdivision (1).
(c)  A matter described by Subsection (a)(5) is a contested
case that may be subject to informal disposition or heard by the
State Office of Administrative Hearings under Chapter 2001,
(d)  Nothing in this chapter may be construed as authorizing
a managed care plan to request a waiver of network adequacy
requirements or to use an access plan unless otherwise authorized
SECTION 5.  Section 501.154, Insurance Code, is amended to
Sec. 501.154.  ACCESS TO INFORMATION.  The public counsel:
(1)  is entitled to the same access as a party, other
than department staff, to department records available in a
proceeding before the commissioner or department under the
authority granted to the public counsel by this chapter; [and]
(2)  is entitled to obtain discovery under Chapter
2001, Government Code, of any nonprivileged matter that is relevant
to the subject matter involved in a proceeding or submission before
the commissioner or department as authorized by this chapter; and
(3)  is entitled to all filings, including any
attachments and supporting documentation, made by a managed care
plan relating to the adequacy of a network offered by the plan, and
any regulatory correspondence relating to the filings.
SECTION 6.  Section 501.157, Insurance Code, is amended to
Sec. 501.157.  PROHIBITED INTERVENTIONS OR APPEARANCES.
Except as otherwise provided by this code, the [The] public counsel
may not intervene or appear in:
(1)  any proceeding or hearing before the commissioner
or department, or any other proceeding, that relates to approval or
consideration of an individual charter, license, certificate of
authority, acquisition, merger, or examination; or
(2)  any proceeding concerning the solvency of an
individual insurer, a financial issue, a policy form, advertising,
or another regulatory issue affecting an individual insurer or
SECTION 7.  Section 501.159, Insurance Code, is amended by
amending Subsection (a) and adding Subsections (a-1) and (a-2) to
(a)  Notwithstanding this chapter, the office may submit
written comments to the commissioner and otherwise participate
regarding individual insurer filings:
(1)  made under Chapters 2251 and 2301 relating to
insurance described by Subchapter B, Chapter 2301; or
(2)  relating to the adequacy of a network offered by a
managed care plan, regardless of whether the filing is pending or
(a-1)  The office may comment on or otherwise participate
regarding the effect or implementation of a filing described by
Subsection (a)(2), including comments regarding concerns that a
(1)  is operating with an inadequate network in this
(2)  may be in violation of a network adequacy law or
(3)  has an inaccurate provider network directory.
(a-2)  For written comments filed with the department
regarding filings described by Subsection (a)(2), the department
(1)  respond to the comments promptly and provide
updates to the office and the managed care plan regarding actions
taken by the department or other actions taken to address issues
(2)  consider conducting a targeted market conduct
examination under Chapter 751 or another form of investigation to
determine the existence and extent of potential violations.
SECTION 8.  The heading to Subchapter F, Chapter 501,
Insurance Code, is amended to read as follows:
SUBCHAPTER F. DUTIES RELATING TO MANAGED CARE PLANS [HEALTH
SECTION 9.  Section 501.251, Insurance Code, is amended to
Sec. 501.251.  COMPARISON OF MANAGED CARE PLANS [HEALTH
MAINTENANCE ORGANIZATIONS].  (a)  The office shall develop and
implement a system to compare and evaluate, on an objective basis,
the quality of care provided by, the adequacy of networks offered
by, and the performance of managed care plans [health maintenance
organizations established under Chapter 843].
(b)  In conducting comparisons under the system described by
Subsection (a), the office shall compare:
(1)  health maintenance organizations to other health
(2)  preferred provider benefit plans to other
preferred provider benefit plans; and
(3)  exclusive provider benefit plans to other
exclusive provider benefit plans.
(c)  In developing the system, the office may use information
or data from a person, agency, organization, or governmental unit
that the office considers reliable.
SECTION 10.  Section 501.252, Insurance Code, is amended to
Sec. 501.252.  ANNUAL CONSUMER REPORT CARDS.  (a)  The office
shall develop and issue annual consumer report cards that identify
and compare, on an objective basis, managed care plans [health
maintenance organizations in this state].
(b)  The consumer report cards required by Subsection (a)
(1)  include comparisons of types of managed care plans
in the same manner as provided by Section 501.251(b); and
(2)  at the discretion of the office, be staggered for
release throughout the year based on the type of managed care plan
that is the subject of the consumer report card.
(c)  Notwithstanding Subsection (b)(2), all consumer report
cards for a particular type of managed care plan must be released at
(d)  The consumer report cards may be based on information or
data from any person, agency, organization, or governmental unit
that the office considers reliable.
(e) [(b)]  The office may not endorse or recommend a specific
managed care [health maintenance organization or] plan, or
subjectively rate or rank managed care [health maintenance
organizations or] plans or managed care plan issuers, other than
through comparison and evaluation of objective criteria.
(f) [(c)]  The office shall provide a copy of any consumer
report card on request on payment of a reasonable fee.
SECTION 11.  It is the intent of the legislature to provide
the office of public insurance counsel with the flexibility to
establish a timeline for the implementation, development, and
initial issuance of annual consumer report cards under Section
501.252, Insurance Code, as amended by this Act, in a manner that
best uses current office of public insurance counsel resources.
SECTION 12.  This Act takes effect September 1, 2025.