Court Opinion

ID: 4131462
Source: CourtListenerOpinion
Date Created: 2017-02-18 01:16:00.559244+00
Date Added: 2024-06-11T14:10:55.378798
License: Public Domain

The Attorney                     General of Texas
                                                             March      9.    1983
    JIM MATTOX
    Attorney General

                                   Honorable     Gibson D. Lewis                               Opinion      No. JM-5
    Supreme Court Building         Chairman
    P. 0. BOX 12548                Committee     on Intergovernmental                          Re:    Benefits     for   treatment
    Austin. TX. 78711.2548
                                       Affairs                                                 of alcohol    and drug dependency
    512/475-2501
    Telex 919lS74.1367             Texas House of Representatives.                             under   article    3.51-9    of  the
    Telecopier 5121475Q255         P. 0. Box 2910                                              Insurance    Code
                                   Austin,     Texas     78769

    1607 Main a.. suite 1400
                                   Dear   Representative       Lewis:
    Dallas. TX. 75201.4709
    21,417428944
                                           You have    asked several    questions  regarding     the construction    of
                                   the Availability       of Alcohol   and Other Drug.Dependency       Coverage   Act,
    4824 Alberta Ave.. Suite 1SO   article    3.51-9   of the Insurance    Code.  Section    2 of this act provides:
    El Paso. TX. 799052793
    915/533-3464
r
                                                     Insurers,           nonprofit         hospital         sad     medical
                                                service     plan corporations             subject      to Chapter 20 of
    1220 Dallas Ave.. Suite 202                 thls    code,       and health          msintensnce         organizations
    Hous.~o”. TX. 770026986
                                                transacting         health        insurance       or providing          other
    7 131650-0666
                                                health     coverage        In this state         shall    offer    and make
                                                available,         under      group     policies.        contrscts.        and
    808 Broadway. Suite 312                     plans    providing          hospital      and medical          coverage      on
    Lubtwxk. TX. 79401.3479                     an expense          incurred,         service      or prepaid          basis.
    8061747.5238                                benefits       for     the necessary          care and treatment             of
                                                alcohol      and other.          drug    dependency         that    are    not
    4309 N. Tenth. Suite S
                                                leas    : favorable             than      for       physical         illness
    McAllsn. TX. 78501.1885                     generally,       subject         to the same .durstional             limits,
    51218824547                                 dollar        limits.          deductibles,           and      coinsurance
                                                factors.        Such offer~of           benefits       shall     be subject
                                                to    the    right        of    the    group      policy      or   contract
    2W Main Plaza. Suite 400
    San Antonio. TX. 78205.2797                 holder      to reject          the coverage          or to select          any
    51212254191                                 alternative          level    ‘of    benefits      ~‘lf %uch right            Is
                                                offered      :by      :or ~~negotiated          .with    ‘such     insurer,
                                               -service      plans. corporation.             or    health     ,mainteaance
    An Equal Oppdrtunityl
                                                organization.~
    Affirmative Action Employer

                                                     Any benefits    ‘so provide@phall       be determined   as
                                                if necessary      care and treatment        in en alcohol    or
                                                other    drug dependency      treatment     center  were care
                                                and treatraent     in a hospital..      For purposes   of this
                                                Act,    the term ‘alcohol        or other     drug dependency
                                                treatment    center’    mesns a facility       vhlch provides

                                                                             p.   15
Honorable    Gibson     D. Lewis      -   Page   2        (JM-5)

             a program        for   the treatment          of alcohol          or other
             drug dependency           pursuant       to a written            treatment
             plan     approved      and monitored          by a physician               and
             which      facility       is   also      (1)    affiliated          with      s
             hospital       under     a contractual           agreement         with     an
             established         system    for    patient       referral,         or    (2)
             accredited         8s    such     a    facility         by     the     Joint
             Commission        on Accreditation           of Hospitals.           or (3)
             licensed       as an alcohol         treatment         program       by the
             Texas Conrmission on Alcoholism,                    or (4)       certified
             ss   a drug        dependency       trestment         program       by     the
             Texas       Department          of      Community          Affairs          in
             accordance       with such standards.             if any, ss may be
             adopted pursuant          to Subsection         (c) of Section           5.12
             of the Texas          Controlled        Substances         Act     (Article
             4476-15,       Vernon's      Texas    Civil       Statutes),         by the
             Executive        Director      of    the     Texas       Department         of
             Community Affairs.           or (5) licensed,             certified,        or
             approved      ss an alcohol          or other         dtig     dependency
             treatment       program      or    center      by any other             state
             agency      having      legal      authority         to     so    license,
             certify,      or approve.

      The act is remedial   and therefore     should be liberally    construed.
See Burch v. City    of San Antonio.      518 S.W.Zd    540. 544 (Tex.    1975);
Board   of Insurance   Conrmissioners   v.   Great   Southern   Life  Insurance
Company. 239 S.W.2d 803. 809 (Tex.     1951).

      You   first   ask:

                 Can an insurer      deny payment of benefits          for the
             necessary     csre and treatment        of alcohol     and other
             drug     dependency       to    s    provider      meeting    the
             definition     of.an   !alcohol     or other drug dependency
             treatment      center'     in   article     3.51-9.    Insurance
             Gode. on the basis         that   the provider      Is not slso
             included    in the definition        of a 'hospital.'

We,flrst     note that     benefits     are provided     to the insured.   i.e.,    the
individual     covered   by the group insurance         policy,  not to thefacility
or   doctor    providing     the    treatment.    Thus,.     the question  should    be
whether    an Insurer     may deny benefits      when the provider-is     sn alcohol
or other     drug dependency        treatment   center,     but not a hospital.      We
snsver   in the negative.        The act states     that
                                                              -.
             [a]ny    benefits        so provided     shall  be   determined
             as if   necessary         csre  snd treatment   in sn alcohol
             or   other   drug        dependency   treatment    center   were
                                                                                               ?

                                                     P.     16
Honorable     Gibson    D.   Lewis   -     Page    3        (JM-5)

              csre    and     treatment           in   a      hospital.   (Emphasis
              added).

Ins.   Code art.     3.51-9,     62.     It is clear      from the underscored         language
that    the   legislature        did    not   intend     that    “alcohol     or   other    drug
dependency     treatment      center,”     ss that item Is defined           in section     2 of
the act,    should be synonomous with “hospital.”                    The fact    that the act
uses    the word      “shall”      also     shows    that    insurers     sre    not   free    to
discriminate       against      euthorised      treatment      centers.      See Schepps .v.
Presbyterian      Hospitsl.       638 S.W.2d 156, 157 (Tex.        Civ.App.      - Dallas
1982, writ     ref’d   n.r.e.).

      Your    second    question     is:

                  Are   benefits       for    the    necessary      csre   and
              treatment    of    alcohol     snd other      drug   dependency
              payable   under article       3.51-9    to all   providers   who
              fit   the definition       of an ‘alcohol       or other    drug
              dependency    treatment      center’   or only to those who
              contract   with the insurer        providing    such coverage?

For the reasons         stated   above.     question    two should be whether          benefits
are    payable    if    the insured       goes    to any alcohol         or drug    dependency
treatment     ~center,     or only     to one that       contrscts     with   the insurer       to
provide     such coverage.          The act      does not specifically           address    this
issue,    but states       only that benefits        shall   be not less       favorable    than
for physical       illness     generally.       Therefore,     if the insurer       is able to
limit    benefits      for   physical     illness     on the basis        of the particular
providers,     It would be equally           able to limit      benefits    under the act.

       Unless    statute   or public    policy    prohibits      it.     the parties    to an
insursnce      contrsct   may agree    to any- provisions          they wish.       Hatch v.
Turner,    193 S.W.2d 668. 669-70 (Tex.          1946);     Boon v. Premier        Insurance
Company, 519 S.W.2d 703. 704 (Tex.       Clv.    App. - Texarkana           1975, no
writ) ; Fruhman v. Nswcas          Benevolent     Auxiliary,        436 S.W.2d 912, 915
(Tex.   Civ. App. - Dallas       1969, writ    ref’d   n.r.e.).       .,Thus, unless    other
statutes    or the policy      of the act prohibits          it,    an insurer     may limit
provision     of benefits    under the act to certain           providers.

       The ‘act    governs    three    different      types    of insurers:        (1)  group
health    insurers     subject      to chapter       3 of    the    Insurance     Code,    (2)
nonprofit     hospitsl     and medical       service    plan    corporations     subject     to
chapter     20   of    the     Insurance      Code,     and    (3)    heelth    maintenance
organizations      subject    to chapter     20A of the.Insurance         Code.
                                                              : .

       Chapter   3 insurers    sre prohibited      from restricting   coverage   to
certain   providers   by article     3.51-6.  section   3 of the Insurance    Code.
which states,     in pertinent    part:

                                                                          _.    -7
                                                                                  I

                                                       p.    17
Honorable       Gibson     D. Lewis    -    Page   4        (JM-5)

            The policy        may provide       that  all   or s portion        of
            any Indemnities           provided     by any such policy           on
            account     of hospital.       nursing,    medical,    or surgical
            services      may. at the option            of the    insurer     and
            unless     the insured        requests    otherwise     in 'writing
            not later       than the time of filing           proofs    of such
            loss,    be paid directly          to the hospital       or. person
            rendering       such services;        but the policy        may not
            require       that     the     service     be    rendered     by     a
            Particular       hospital      or person.       Payment so made
            shall   discharge       the obligation      of the insurer      with
            respect      to    the     amount     of   insurance      so   paid.
            (Emphasis      added).

Therefore, a chapter   3 insurer  must provide    benefits  if                            the       insured
goes to any alcohol  or drug dependency  trest.ment center.

      Nonprofit    corporations       for   group  hospital     service    governed    by
chapter   20 of    the Insurance        Code are    given   statutory     authority    to
contract   with specific     providers.       Such corporations-have        the purpose
of operating    nonprofit    hospital     service  plans whereby care-is       provided
through   an established       hospital     or hospitals,      and sanitariums      with
which it has contracted       for such csre.       Ins.   Code art.    20.01.

      Article      20.11     further       describes        the   right   to‘contract.         It   states:

                 Such      corporations           shall        have       authority       to
            contract       with      health      care      providers,        other     than
            physicians,         in such manner as to sssure                        to each
            person      holding       a policy         or     certificate         of   said
            corporation          the furnishing             of such services             and
            supplies      ss may be agreed upon In the policy,                         with
            the    right      to said         corporation           to limit        in the
            policy      the types          of disease          for    which     it    shall
            furnish      benefits;        provided        that     such corporations
            shall      not      be     required         to     contract        with      any
            particular         health        care      provider;          and    provided
            further      that this         Article       shall     not be deemed to
            authorize       such corporation                to contract         with     any
            health       csre      provider        in     any      manner      which      is
            prohibited         by any licensing                 law     of   this     state
            under     which       the health          care       provider      operates.
            Health         csre         provider           means         any       person,
            association.           partnership.           corporation,         or     other
            entity      furnishing          or providing             any services         or
            supplies          for        the      purpose            of     preventing.
            alleviating.          curing,      or healing           human illness         or
            injury.

                                                       p.    18
      Honorable     Gibson    D. Lewis     -    Page   5        (JM-5)

             Thus,     the corporation        is free      to contract      with    specific       health
      csre    providers      so long as the policyholder               is assured       services       and
      supplies      ss may be 'agreed        upon in the policy.              Since    article      20.11
      authorizes      the corporation        to limit      the types of disease          for which it
      shall     furnish     benefits,      a corporation       that     offers     only    limited      or
      specified      disease    policies    would not have to offer             alcohol     dependency
      coverege.       The set exempts such policies             from its coverage.            Ins.   Code
      art.    3.51-9.      $3.     Of    course.      chapter     20 corporations          must     treat
      alcohol      or    drug   treatment       facilities       like    hospitals       under      their
      policies.

             Article      20.12 prohibits          a corporation     from contracting       to furnish
      to the member s physician                or any medical      services,     from attempting      to
      control       the     relations       existing     between    a member end his            or  her
      physician.       and from restricting           the right    of the patient       to obtain   the
      services      of any licensed          doctor    of medicine.      Article     20.12.   however,
      does not give the insured                the right     to insist     on a physician       for the
      treatment       of alcohol       or drug dependency         who is not acceptable          to the
      provider,        -,          hospital      or   elcohoSl,etre&sent         center,     that   has
      contracted         with     the    corporation.                         Hospital     Service    v.
      ~;~rcc~~:,f;l            S.W.Zd    418. 423 (Tex.5.            Appp - Amarillo        1951, writ
                                The interpretation         is in harmony with the act because
,-    the corporation           must still       make available      benefits     under the act and
      because     the insured         likewise      does not have full         choice    of physician
      for physical         illness     generally.

            A health     meintenance   organization      [hereinafter      "HMO"] governed        by
      chapter    20A of the Insurance          Code is    authorized      to furnish       medical
      care   services     through   physicians,     providers,      or groups      of providers
      who contrsct      with   the DMO.     Ins.   Code art.     20A.06(~)(3).         Therefore,
      HMO'S,    like    chspter    20 corporations,        sre   free    to    specify     certain
      providers      or physicisns.      ss   long   8s benefits       for   alcohol      or drug
      dependency     sre made available      and alcohol     or drug dependency treatment
      centers   are treated      the same as hospitals.

             Your   third    question     is:

                        Does    s     group    health       Insurance        policy       or
                    contrsct       subject     to     article        3.51-9       provide
                    coverage    as s matter of law for the necessary                   care
                    and treatment       of alcohol    and other drug dependency
                    not    less     favorable     than     for    physical        illness
                    generally       unless     such     coverage        Is     expressly
                    rejected      (or     an  alternate        level      of    benefits
                    expressly       selected)     by    the    group ‘.or       contrsct
                    holder?

      We snswer    in the affirmative.                 The act  dictates   that       group insurers
P
      "shall offer    and make available,               under group policies,          . . . benefits
 ,_

                                                           p.   19
Honorable      Gibson     D. Lewis     -     Page   6        (JM-5)

for    the   necessary      care    and    treatment,    of   alcohol     and other       drug
dependency      that    are   not    less    favorable     than   for   physical     illness
generally."         (Emphasis     added).      ,Ins.   Code art.      3.51-9,    §2.      This
offer,     however.    is subject       to a right     of rejection      or selection        of
alternative     benefits.      Id.

      Statutes   bearing on insurance   contracts                  become      part    of   the
contract   as though they had been copied   therein.                   Allstate     Insurance
Company mm Bunt. 469 S.W.Zd             151, 155 (Tex.      1971);     Harklns    V. Indiana
Lumbermens Mutual         Insurance     Company. 234 S.W.Zd         430, 431 (Tex.         Civ.
APP.    - Galveston     1950,  no  writ).    Therefore,     eve"    if  a   group   policy    is
silent,    the insurer      nevertheless    "offers     and makes available"         benefits
for alcohol     and other drug dependency           that are not less        favorable     than
for physical      illness    generally,    because    the statute      obligates     it to do
so.

        If   the offer       is read Into a silent               policy,      is an acceptance         or
rejection        by the policyholder            implied?        For three       reasons     we believe
acceptance        of full     benefits      is implied.          First,     the act says that the
insurer      "shall      offer     and make available"               the benefits.            (Emphasis
added).         Ins.    Code art.        3.51~412.           Second,      although,       because    the
statute      is    remedial     in nature,         It    should     be liberally         construed     to
achieve     ,its     purpose,     see Board         of Insurance         Commissioners         V. Great     ?
Southern Life         InsuranceCompang,            supra.     at 803. strict         construction     of
the    rejectlo"        provisions       would      best     effectuate        that    purpose.      See
Employers        Casualty     Company V. Sloan,             565 S.W.Zd        580, 583 '(Tern. Civ.
APP. - Austin         1978, writ      ref'd     n.r.e.);      Guarantee       Insurance     Company of
Texas V. Boggs,           527 S.W.Zd      265. 268 (Tex.           Civ.    App. - Amarillo        1975.
writ     dism'd).        Third,     the act makes the right                  to rejector         select
alternative        level    of benefits       possible       only if the right          is offered    or
negotiated        by the insurer.          Ins.    Code art.       3.51-9.     52.    If alternative
benefits       have not been explicitly                  offered,       they    cannot     be chosen.
Therefore.        when the offer       is implied         as a matter of law. acceptance              is
also implied.

       Your    fourth    question      is:

                  Can an insurer   assign    a"                   alternate    level  of
              benefits  to 8. covered    group                   without    the express
              rejection  by the group of full                     benefits?

We answer     in the negative.       The act requires        the insurer      to offer    full
benefits.       That offer    is subject     to the right       of the policyholder          to
reject     coverage   or to select       alternative       benefits.       If   the insurer
were free     to assign    the alternative      level,     the-language       regarding    the
right    of the policyholder        to reject     full    coverage     and requiring       the
offer   of benefits     would be rendered      meaningless.         Statutes     will  not be
construed      so as    to   render    parts     of    them meaningless.            Brow"    V.             ?

                                                        p.    20
.

    Honorable     Gibson       D. Lewis     -   Page   7          (JM-5)

    Memorial Villages    Water Authority,                   361 S.W.Zd 453,      455 (Tex.       Civ.   APp.
    - Houston jl4th   Dist.]   1962, writ                  ref'd n.r.e.).

           Questions      five    and six       are:

                        What evidence    is required   of such               a   rejection
                   or   alternate  selection   of benefits?

                       Must      there   be    written     evidence    of    such            s
                   rejection      or alternate     selection    of benefits?

    The act does not specify             the means of rejection,            nor has the State
    Board    of Insurance       issued     an administrative         rule    requiring     written
    rejection.       Therefore,       if    there    exists      a   requirement        that   such
    rejection     must be written        that requirement       must arise      by implication.
    Interpretation     by implication,         however,     is permissible        only to supply
    obvious     intent    not     expressly      stated.      not   to    add    to   a   statute.
    Commonwealth of Massachusetts             v. United       North    and South Development
    Company, 168 S.W.Zd 226, 229 (Tex.              1942).

           Additional        grounds      exist       for     declining        to    imply    legislative
    intent    that rejection        be written.           The legislature          is presumed to have
    known existing        statutes      and to have known the~construction                    placed     upon
    similar      statutes~      by    the     appellate         courts.         Gamer      v.    Lumberton
    Independent       School     District,        430 S.W.Zd          418. 423 (Tex.         Civ.    App. -
    Austin     1968. no writ).           Other insurance            statutes       deal with rejection
    of coverage.          The Personal          Injury      Protection         Coverage     Act,    article
    5.06-3    of the Insurance           Code, provides            that all       automobile     liability
    insurance      policies      shall    include       personal        injury     protection      coverage
    unless      rejected       by    the     insured         in    writing.         The    Uninsured        or
    Underinsured       Motorist      Coverage        Act,     article       5.06-l     of the Insurance
    Code, provides         that allautomoblle              liability.       insurance     policies      shall
    include     uninsured       motorist       coverage       unless      the insured       rejects      such
    coverage      in writing.         Article       5.06-l'was         amended in 1981 to add the
    writing     requirement,       despite       'an appellate          court    holding    that written
    rejection      was required        by rule      of the Insurance            Board.     See Employers
    Casualty     Company v. Sloan,          s.            Because the same legislature                passed
    article     3.51-9.      the intent       to alloyoral             rejection      in article      3.51-9
    must be assumed.

           Your    seventh       question       Is:

                       Does     the     'necessary      care    and    treatment    of
                   alcohol.     dependency'        as -that     ~term is     used   in
                   article     3.51-9     encompass     detoxificafion       only, nor
                   the entire       treatment     provided    under the treatment
                   plan    envisioned       in paragraph       2 of    section    2 as
                   approved     and monitored       by a physician?

                                                             p.     21
 Honorable      Gibson     D.   Lewis   -   Page   8        (JM-5)

        The act does not define           "necessary     care and treatment        of alcohol
 dependency."       As you point         out.   however,      part   of the definition       of
 "alcohol    or other       drug dependency        treatment       center"    is "a facility
 which provides       a program      for   the treatment        of alcohol      or other   drug
 dependency pursuant         to a written      treatment     plan approved and monitored
 by    a physician."          Ins.   Code     art.    3.51-9     12.      An act    should   be
 interpreted     in a manner which gives            effect     to the entire      act.    Brow"
 V.    Memorial    Villages       Water    Authority.      supra.      at   455.    Thus,   the
 "necessary     care and treatment          of alcohol       and other      drug dependency"
 should    be construed        as meaning       treatment      according      to the written
 plan.

         Nevertheless,          the   act     does     not    further     describe        the written
  treatment      plan.      The act does state           that benefits         should be not less
  favorable       than for      physical      illness      generally,      but that        language    is
  not helpful         since     drug   dependency         is    fundamentally        different      from
  illnesses      which are not based on addiction.                     Because      the language       of
'the    act    leaves      the act's       intent     obscure     with   respect       to treatment,
  extrinsic      aids to construction,            such as the purpose of the act, public
  policy.     and    legislative      history,       may be examined.            Harris     V. city    of
  Fort Worth,        180 S.W.Zd       131, 133 (Tex.           1944).    The act was sponsored
  and prepared         by the National          Association        of Insurance         Commissioners
  (C-l)     Task Force         on Alcoholism,         Drug Addiction,           and Insurance.           A   -,
  report    prepared      by the Task Force dated May 26. 1981 is a valuable                          aid
  to interpretation            of the act.           The legislature         is    assumed to have
  adopted      the     legislation        with      the     same    intent      evidenced       by    the
  commission        in     its     report      unless       the    language       of     the    statute
  unambiguously          indicates        the     contrary.         2A     Sutherland         Statutory
  Construction        048.11 (4th ed. 1973 ti Supp. 1982).

        The    report    includes     Model    State     Legislation,       which     the   act
 follows     almost    verbatim,     and a Model        Benefit     Structure.       Both the
 Model ,State     Legislation      and the Model Benefit          Structure     were adopted
 by the Task Force.           The benefits      include    a maximum of two year-long
 benefit    periods    per lifetime.       Each benefit     period     includes    outpatient
 care 88 well      as inpatient      care.    Counseling     and therapy       are included.
 The report      does not contain        any statement       of intent,       but the Model
 Benefit       Structure       indicates      that      something        more     than     mere
 detoxification       was required.

        The only records        of legislative        discussion     before   passage     of the
 act   support       the   interpretation        that     more    than    detoxification        is
 required.       Although     the Senate      Committee on Economic Development                did
 not issue     an official      report,     tapes of the committee hearing             when the
 bill    was     approved      are    available.         Commit&e        members'     questions
 regarding      duration     of   treatment      were    answered     by reference       to the.
 Model    Benefit      Structure.       Official      tape    recording,     August     3.   1981
 meeting     of    the   Texas     Senate     Economic     Development       Committee.       -See

                                                       p.   22
Honorable      Gibson     D. Lewis     -     Page   9        (JM-5)

Sutherland,   s,        548.10          (resort         to    statements   at   committee     hearings
in construing    statutes).

        In keeping        with    the   liberal       construction        of     the act       and its
legislative         history,       benefits        should       go    beyond       detoxification.
Detoxification        is but a preliminary             step in the care and treatment                   of
alcohol      or    other     drug    dependency.          Thus,      we do not           believe      the
legislature         could       have       intended        to     limit      the       benefits         to
detoxification.            The extent         of   the    benefits       would       depend     on the
particular       policy,      including       whether      alternative         level     of benefits
were     chosen,     and considering           the durational          limits,       dollar     limits,
deductibles,        and coinsurance           factors     applicable       to physical          illness
generally.       -See   Ins.   Code   art.     3.51-9.     52.

       Your    eighth    question      is:

               Can an insurer  require    that   each new member of a
               covered  group be medically      underwritten prior  to
               coverage   as a condition      on the ability   of  the
               group to select  full  benefit    coverage?

       The act    is    silent     as to underwriting          requirements.      Since     the
benefits     can    not     be    less    favorable       than    for   physical     illness
generally,    the insurer's        underwriting      method for alcohol       or other drug
dependency     coverage        must    be   as   liberal     as    for  physical     illness
generally.     See Ins.      Code art.     3.51-9,    $2.    Although   conditioning      full
coverage   on individual        underwriting      may appear coercive        on the part of
the insurer,     it does not violate           the act so long as full         coverage    for
other physical      illnesses      is conditioned       on individual    underwriting.

     The act should be construed          to be constitutional.           State v. City
of Austin,    331 S.W.Zd     737 ,(Tex.  1960).      If underwriting        restrictions
were implied,     insurers    could argue    that    the act violates        due process
or impairs   the obligation      of contracts.      See Insurers'       Action    Council,
Inc.  V. Markman. 490 F. Supp. 921 (D. Minn.      1980).   aff'd     653 F.2d 344
(8th Cir.   1981).    in which the court       uuheld    a Minnesota      insurance      law
mandating   the offer     of basic   medical    coverage    because     the law allowed
the insurer    to apply its own underwriting          standards    in order     to charge
a premium commensurate with the risk.

                                              SUMMARY

                   An insurer        may not       deny benefits       under   the
               Availability       of Alcohol      and Other.Drug      Dependency
               Coverage      Act, art.    3.51-9.    when the provider       is an
               alcohol      or other    drug dependency         center.    but is
               not a hospital.         All    insurers     subject    to the act
               must make available           benefits      under   the act     and
               must     treat     alcohol      or    other    drug     dependency

                                                                                >+.   :7

                                                        p.     23
.   ,I

         Honorable    Gibson     D.   Lewis    -   Page   10        (JM-5)

                      treatment       centers     like    hospitals.          A group health
                      insurer      governed      by chapter          3 of the Insurance
                      Code must provide           benefits      if the insured           goes to
                      any alcohol        or drug dependency              treatment       center.
                      Nonprofit       corporations         governed      by chapter         20 of
                      the Insurance         Code may both           limit     their    benefits
                      to their       contracted        providers       and may refuse            to
                      provide     benefits      under the act at all               in specific
                      disease           policies.               Health             maintenance
                      organisations          may restrict             benefits        to    their
                      contracted       providers.          As a matter          of law ~, if       a
                      policy       governed        by     the      act     is     silent,        it
                      automatically        provides       full    benefits.          An insurer
                      may not       assign      an alternate           level      of    benefits
                      without       express        rejection         of     full      benefits.
                      Rejection      need not be in writing.               "'Necessary        care
                      and    treatment       of     alcohol       dependency"         me&s       an
                      entire     treatment       plan     as set out in the act and
                      requires      more than detoxification.                 An insurer       may
                      require        each      new       member        to      be     medically
                      underwritten        prior     to coverage         as a condition           to
                      the group selecting            full    benefits,       so long as this
                      is   its    underwriting         policy      for    physical       illness
                      generally.                                            I

                                                                    LLmb
                                                                      Very

                                                                      JIM
                                                                             ruly

                                                                      Attorney
                                                                              .
                                                                                    your

                                                                               MATTOX
                                                                                General      of   Texas

         TOM GREEN
         First Assistant       Attorney       General

         DAVID R.    RICHARDS
         Executive    Assistant       Attorney      General

         Prepared    by Deborah J. Hersberg
         Assistant    Attorney  General

         APPROVED:
         OPINION COMMITTEE

         Susan L. Garrison,  Chairman
         Jon Bible
         Rick Gilpin
         Deborah J. Herzberg
         Jim Moellinger

                                                               p.    24