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Texas Department of Insurance
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Subchapter D. Regulatory Requirements for an HMO Subsequent to Issuance of Certificate of Authority

28 TAC §11.301

The Texas Department of Insurance proposes amendments to §11.301 concerning certain health maintenance organization (HMO) filings. The proposed amendments to §11.301 are necessary to provide uniformity in the establishment of a billing system for filing fees which is proposed to be added by new §7.1302 published elsewhere in this issue of the Texas Register. Under proposed new §7.1302, filing fees for certain filings made pursuant to Chapters 3 and 11 of this title will be subject to the billing system. The current system of submitting fees for filings requires that the fee(s) be submitted along with the filing. Upon implementation of the billing system as it relates to the proposed amendments to §11.301(3)(C), filing fee(s) for certain HMO filings (i.e., paragraphs (4)(A), (B), and (L), and (5)(C), (G), (K), (M), and (N)) will no longer be required to be submitted at the time of the filing; instead, the HMO submitting the filing will be billed by itemized invoice from the department. The new billing system will reduce the process of refunding fee amounts received in excess of the actual fee amount and eliminate the need to reject filings due to insufficient fee amounts.

Angelia Johnson, Deputy Commissioner, Filings Intake Division, Life, Health and Licensing Program, has determined that for each year of the first five years the proposed amendments are in effect, there will be no fiscal implications for state or local governments as a result of enforcing or administering the proposed amendments. There will be no effect on local employment or the local economy.

Ms. Johnson has determined that for each year of the first five years the proposed amendments are in effect, the anticipated public benefits will be a more efficient and effective use of the department´s resources because staff will spend significantly less time handling fees, issuing refunds for overpayments, and rejecting filings submitted with an incorrect filing fee. Additional public benefits will include a reduction in the amount of paperwork and time spent by HMOs issuing checks in payment of fees with each filing by enabling them to submit a single payment for numerous filings, versus a separate payment for each filing, thereby decreasing the amount of the HMO staff's time needed preparing and submitting filing fees, and decreasing the expense of issuing multiple payments to the department. Ms. Johnson has determined that there will be no economic costs associated with having to comply with the proposed amendments because the proposed amendments will actually have the effect of reducing any costs of compliance. It is the department´s position that the proposed amendments will not have an adverse economic effect on small businesses or micro-businesses. Regardless of the fiscal effect, it is neither legal nor feasible to waive or modify the requirements of the proposed amendments for small and micro-businesses because the billing system needs to be consistent for all HMOs.

To be considered, written comments on the proposal must be submitted no later than 5:00 P.M. on January 6, 2003 to Gene C. Jarmon, Acting General Counsel and Chief Clerk, Mail Code 113-2A, Texas Department of Insurance, P. O. Box 149104, Austin, Texas, 78714-9104. An additional copy of the comments should be simultaneously submitted to Bill Bingham, Deputy for Regulatory Matters, Life, Health and Licensing Program, Mail Code 107-2A, Texas Department of Insurance, P. O. Box 149104, Austin, Texas 78714-9104. A request for public hearing on the proposal should be submitted separately to the Office of the Chief Clerk.

The amendments are proposed pursuant to Insurance Code Articles 20A.22, 20A.32, and §36.001. Insurance Code Article 20A.22 provides that the commissioner may promulgate such reasonable rules as are necessary and proper to carry out the provisions of the HMO Act. Insurance Code Article 20A.32 requires that the expenses for filing fees for every organization subject to Chapter 20A of the Insurance Code shall be paid in accordance with rules adopted by the commissioner. Insurance Code §36.001 authorizes the commissioner of insurance to adopt rules for the conduct and execution of the powers and duties of the department as authorized by statute.

The following Articles are affected by the proposal: Insurance Code Article 20A.22 and 20A.32

§11.301. Filing Requirements. Subsequent to the issuance of a certificate of authority, each HMO is required to file certain information with the commissioner, either for approval prior to effectuation or for information only, as outlined in paragraphs (4) and (5) of this section and in §11.302 of this title (relating to Service Area Expansion Requests). These requirements include filing changes necessitated by federal or state law or regulations.

(1) ­ (2) (No change.)

(3) Attachments for filings. The filings required in paragraphs (4) and (5) of this section must be accompanied by the following:

(A) - (B) (No Change.)

(C) except for the filings outlined in paragraphs (4)(A), (B), and (L), and (5)(C), (G), (K), (M), and (N) of this section, the applicable filing fee for other filings as required by [ the] Insurance Code Article 20A.32, as determined by §7.1301 of this title (relating to Regulatory Fees). The fee(s) for filings outlined in paragraphs (4)(A), (B), and (L), and (5)(C), (G), (K), (M), and (N) of this section are subject to the fee amounts described in §7.1301(g) of this title, but shall not be attached with the filing. Instead, the submission of such fee(s) is subject to the billing provisions of §7.1302 of this title (relating to Billing System).

(4) ­ (6) (No change.)

(7) Filing Review Procedure. Within 20 days from the department's receipt of an initial filing for commissioner's approval under this section, the department shall determine whether the filing is complete or incomplete for purposes of acceptance for review and, if found to be incomplete, the department shall issue a written or electronic notice to the HMO of its incomplete filing. A filing under this subchapter that is subject to the billing provisions of §7.1302 of this title and which, upon receipt by the department, fails to comply with the requirements of that section, will be deemed to be incomplete for purposes of this subchapter.

(A) ­ (C) (No change.)

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