Texas Administrative Code › Title 28 - INSURANCE › Part 1 - TEXAS DEPARTMENT OF INSURANCE › Chapter 11 - HEALTH MAINTENANCE ORGANIZATIONS › Subchapter AA - DELEGATED ENTITIES › Section 11.2604 - Delegation Agreements - General Requirements and Information to be Provided to HMO

Current through Reg. 49, No. 28; July 12, 2024
(a) An HMO that
				  delegates any function required by Insurance Code Chapter 843 (concerning
				  Health Maintenance Organizations) and Chapter 1272 (concerning Delegation of
				  Certain Functions by Health Maintenance Organization), and other applicable
				  insurance laws and regulations of this state to a delegated entity must execute
				  a written agreement with that delegated entity.
(b) Written agreements must include:
(1) a provision that the delegated entity and
				  any delegated third parties must agree to comply with all statutes and rules
				  applicable to the functions being delegated by the HMO;
(2) a provision that the HMO will monitor the
				  acts of the delegated entity through a monitoring plan, which must be set forth
				  in the delegation agreement, and contain, at a minimum:
(A) provisions for the review of the
				  delegated entity's solvency status and financial operations, including, at a
				  minimum, review of the delegated entity's financial statements, consisting of
				  at least a balance sheet, income statement, and statement of cash flows for the
				  current and preceding year;
(B)
				  provisions for the review of the delegated entity's compliance with the terms
				  of the delegation agreement as well as with all applicable statutes and rules
				  affecting the functions delegated by the HMO under the delegation
				  agreement;
(C) a description of the
				  delegated entity's financial practices in sufficient detail that will ensure
				  that the delegated entity tracks and timely reports to the HMO liabilities
				  including incurred but not reported obligations;
(D) a method by which the delegated entity
				  must report monthly a summary of the total amount paid by the delegated entity
				  to physicians and providers under the delegation agreement; and
(E) a monthly log, maintained by the
				  delegated entity, of oral and written complaints from physicians, providers,
				  and enrollees regarding any delay in payment of claims or nonpayment of claims
				  pertaining to the delegated function, including the status of each
				  complaint;
(3) a
				  statement that the HMO will use the monitoring plan on an ongoing basis;
				  compliance with this requirement must be documented by the HMO maintaining, at
				  a minimum:
(A) periodic signed statements
				  from the individual identified by the HMO in paragraph (23) of this subsection
				  that the HMO has reviewed the information required in the monitoring plan;
				  and
(B) periodic signed statements
				  from the chief financial officer of the HMO acknowledging that the most recent
				  financial statements of the delegated entity have been reviewed;
(4) a provision establishing the
				  penalties to be paid by the delegated entity for failure to provide information
				  required by this subchapter;
(5) a
				  provision requiring quarterly assessment and payment of penalties under the
				  agreement, if applicable;
(6) a
				  provision that the agreement cannot be terminated without cause by the
				  delegated entity or the HMO without written notice provided to the other party
				  and the department before the 90th day preceding the termination date, provided
				  that the commissioner may order the HMO to terminate the agreement under §
											11.2608
				  of this title (relating to Department May Order Corrective Action);
(7) a provision that requires the delegated
				  entity, and any entity or physician or provider with which it has contracted to
				  perform a function of the HMO, to hold harmless an enrollee under any
				  circumstance, including the insolvency of the HMO or delegated entity, for
				  payments for covered services other than copayments and deductibles authorized
				  under the evidence of coverage;
(8)
				  a provision that the delegation agreement may not be construed to limit in any
				  way the HMO's responsibility, including financial responsibility, to comply
				  with all statutory and regulatory requirements;
(9) a provision that any failure by the
				  delegated entity to comply with applicable statutes and rules or monitoring
				  standards permits the HMO to terminate delegation of any or all delegated
				  functions;
(10) a provision that
				  the delegated entity must permit the commissioner to examine at any time any
				  information the department reasonably considers is relevant to:
(A) the financial solvency of the delegated
				  entity; or
(B) the ability of the
				  delegated entity to meet the entity's responsibilities in connection with any
				  function delegated to the entity by the HMO;
(11) a provision that the delegated entity,
				  in contracting with a delegated third party directly or through a third party,
				  will require the delegated third party to comply with the requirements of
				  paragraph (10) of this subsection;
(12) a provision that the delegated entity
				  must provide the license number of any delegated third party performing any
				  function that requires a license as a third party administrator under Insurance
				  Code Chapter 4151 (concerning Third-Party Administrators), or a license as a
				  utilization review agent under Insurance Code Chapter 4201 (concerning
				  Utilization Review Agents), or that requires any other license under the
				  Insurance Code or another insurance law of this state;
(13) if utilization review is delegated, a
				  provision stating that:
(A) enrollees will
				  receive notification at the time of enrollment identifying the entity that will
				  be performing utilization review;
(B) the delegated entity or delegated third
				  party performing utilization review must do so in compliance with Insurance
				  Code Chapter 4201 and related rules; and
(C) utilization review decisions made by the
				  delegated entity or a delegated third party must be forwarded to the HMO on a
				  monthly basis;
(14) a
				  provision that any agreement in which the delegated entity directly or
				  indirectly delegates to a delegated third party any function delegated to the
				  delegated entity by the HMO under Insurance Code Chapter 843 and Insurance Code
				  Chapter 1272 and other applicable insurance laws and regulations of this state,
				  including any handling of funds, must be in writing;
(15) a provision that on any subsequent
				  delegation of a function by a delegated entity to a delegated third party, the
				  executed updated agreements must be filed with the department and enrollees
				  must be notified of the change of any party performing a function for which
				  notification of an enrollee is required by this chapter or Insurance Code
				  Chapter 843 and Insurance Code Chapter 1272 and other applicable insurance laws
				  and regulations of this state;
(16)
				  an acknowledgment and agreement by the delegated entity that the HMO is not
				  prevented from requiring that the delegated entity provide any and all evidence
				  requested by the HMO or the department relating to the delegated entity's or
				  delegated third party's financial viability;
(17) a provision acknowledging that any
				  delegated third party with which the delegated entity subcontracts will be
				  limited to performing only those functions set forth and delegated in the
				  agreement, using standards approved by the HMO and that are in compliance with
				  applicable statutes and rules;
(18)
				  a provision that any delegated third party is subject to the HMO's oversight
				  and monitoring of the delegated entity's performance and financial condition
				  under the delegation agreement;
(19) a provision that requires the delegated
				  entity to make available to the HMO samples of each type of contract the
				  delegated entity executes or has executed with physicians and providers to
				  ensure compliance with the contractual requirements described by paragraphs (6)
				  and (7) of this subsection, except that the agreement may not require that the
				  delegated entity make available to the HMO contractual provisions relating to
				  financial arrangements with the delegated entity's physicians and
				  providers;
(20) a provision that
				  requires the delegated entity to provide information to the HMO on a quarterly
				  basis and in a format determined by the HMO to permit an audit of the delegated
				  entity and to ensure compliance with the department's reporting requirements
				  with respect to any functions delegated by the HMO to the delegated entity and
				  to ensure that the delegated entity remains solvent to perform the delegated
				  functions, including:
(A) a summary:
(i) describing any payment methods, including
				  capitation or fee for services, that the delegated entity uses to pay its
				  physicians and providers and any other third party performing a function
				  delegated by the HMO; and
(ii) of
				  the breakdown of the percentage of physicians and providers and any other third
				  party paid by each payment method listed in clause (i) of this
				  subparagraph;
(B) the
				  period that claims and any other obligations for health care filed with the
				  delegated entity, under this and any other delegation agreements to which the
				  delegated entity is a party, have been pending but remain unpaid, divided into
				  categories of 0-to-45 days, 46-to-90 days, and 91-or-more days. The summary
				  must include aggregate information for all delegation agreements entered into
				  by the delegated entity and information for the specific delegation agreement
				  entered into between the parties;
(C) the aggregate dollar amount of claims and
				  other obligations for health care owed by the delegated entity to any physician
				  or provider, including estimates for incurred but not reported
				  obligations;
(D) information that
				  the HMO requires in order to file claims for reinsurance, coordination of
				  benefits, and subrogation; and
(E)
				  documentation, except for information, documents, and deliberations related to
				  peer review that are confidential or privileged under Occupations Code, Chapter
				  160, Subchapter A, (concerning Requirements Relating to Medical Peer Review),
				  that relates to:
(i) any regulatory agency's
				  inquiry or investigation of the delegated entity or of an individual physician
				  or provider with whom the delegated entity contracts that relates to an
				  enrollee of the HMO; and
(ii) the
				  final resolution of any regulatory agency's inquiry or investigation;
(21) a provision
				  relating to enrollee complaints that requires the delegated entity to ensure
				  that on receipt of a complaint, as defined in Insurance Code Chapter 843 and
				  other applicable insurance laws and regulations of this state, a copy of the
				  complaint must be sent to the HMO within two business days, except that in a
				  case in which a complaint involves emergency care, as defined in Insurance Code
				  Chapter 843 and other applicable insurance laws and regulations of this state,
				  the delegated entity must forward the complaint immediately to the HMO,
				  provided that nothing in this paragraph prohibits the delegated entity from
				  attempting to resolve a complaint;
(22) a provision that the HMO, the delegated
				  entity, and any delegated third party must comply with the provisions of
				  Chapter 22 of this title (relating to Privacy);
(23) a provision identifying an officer of
				  the HMO as the representative of the HMO for all matters related to the
				  delegation agreement; and
(24) a
				  provision identifying which party to the agreement will bear the expense of
				  compliance with each requirement set forth in this subsection, including the
				  cost of any examinations performed under this subchapter.