The Texas Department of Insurance (Department) has received inquiries concerning whether tailored networks, also referred to as customized networks or sub-networks (tailored networks), may operate under the certification of a workers' compensation health care network established under Chapter 1305, Insurance Code (certified network). Inquiries have generally come from applicants or potential applicants considering offering tailored networks as an option to employers. However, as yet, no applicant has filed a proposal to use tailored networks in conjunction with network certification applications. This bulletin serves as notice to these inquirers, and workers' compensation participants in general, that tailored networks are not contemplated under Chapter 1305, Insurance Code and, therefore, all workers' compensation networks, including a network carved out of an existing certified network, must be certified through a separate application process.
In the enactment of Chapter 1305, Insurance Code under Article 4 of House Bill (HB) 7 (79th Legislature, Regular Session, 2005), the legislature set forth an elaborate regulatory scheme for certified networks. This scheme contemplates that all networks will be certified by the Department in accordance with network application and certification requirements; detailed participatory and notice requirements; specified powers and duties; contracting requirements; financial requirements; and health care service and quality improvement requirements, among other specific requirements. In addition, this scheme calls for issuance of consumer report cards that compare and evaluate certified networks based upon objective criteria. This scheme does not address nor contemplate any certified network carve outs. Therefore, pursuant to Chapter 1305 of the Insurance Code, any workers' compensation network contemplating the use of a tailored network must submit an application to have that tailored network certified.
Under 28 Texas Administrative Code §10.27, the Department may approve or disapprove a network request for modification to make a material change to a network configuration, which refers to the adequacy of the network to provide comprehensive health care services sufficient to serve the population of injured employees. This rule does not imply that the Department may approve a tailored network that is established and operated under a certified network as a service area or network configuration modification. Therefore, creating a new separate network through a modification of an existing certified network is not allowed.
Questions regarding this bulletin should be directed to: Margaret Lazaretti, Deputy Commissioner, Health and WC Network Certification & QA Division, Texas Department of Insurance, at wcnet@tdi.state.tx.us.
For more information contact: LifeHealth@tdi.state.tx.us.
_________________________
Mike Geeslin
Commissioner of Insurance