Each group, individual and conversion contract and group certificate must contain the following provisions. Use of the standard language for each provision as presented in Subchapter L of this chapter (relating to Standard Language for Mandatory and Other Provisions) shall exempt from review that portion of the evidence of coverage where standard language is contained. Such standard language shall not be the only language accepted by the commissioner for such provisions.

1. (1) Name, address, and phone number of the HMO--the toll-free number referred to in the Insurance Code Article 21.71, where applicable, must appear on the face page.

   1. (A) The face page of an agreement is the first page that contains any written material.
   2. (B) If the agreements or certificates are in booklet form the first page inside the cover is considered the face page.
   3. (C) The information regarding the toll-free number referred to in Article 21.71 must be in accordance with §1.601 of this title (relating to Notice of Toll-Free Telephone Numbers and Procedures for Obtaining Information and Filing Complaints).

2. (2) Benefits--a schedule of all health care services that are available to enrollees under the basic, limited, or single health care service plan, including any copayments or deductibles and a description of where and how to obtain services. A variable copayment or deductible schedule may be used. The copayment schedule must clearly indicate the benefit to which it applies. No copayment or deductible shall be charged for immunizations as described in the Insurance Code Article 21.53F for a child from birth through the date the child is six years of age, except for small employer health benefit plans as defined by the Insurance Code Chapter 26.

   1. (A) Copayments. Payment for health care services may be supplemented by nominal copayments. Each HMO may establish one or more copayment options. A basic service HMO may not impose copayment charges that exceed fifty percent of the total cost of providing any single service to its enrollees, nor in the aggregate more than twenty percent of the total cost to the HMO of providing all basic health care services. A basic service HMO may not impose copayment charges on any enrollee in any calendar year, when the copayments made by the enrollee in that calendar year total two hundred percent of the total annual premium cost which is required to be paid by or on behalf of that enrollee. This limitation applies only if the enrollee demonstrates that copayments in that amount have been paid in that year. The copayment shall be stated in the group, individual or conversion agreement and group certificate.
   2. (B) Deductibles. A deductible shall be for a specific dollar amount of the cost of the basic, limited, or single health care service. An HMO shall only charge a deductible for services performed out of the HMO's service area or for services performed by a physician or provider who is not in the HMO's delivery network.

3. (3) Cancellation and non-renewal--a statement specifying the following grounds for cancellation and non-renewal of coverage and the minimum notice period that will apply.

   1. (A) Cancellation by an HMO of an enrollee in a group, or if a subscriber, the subscriber and subscriber's enrolled dependents, in the case of:

      1. (i) nonpayment of amounts due under the contract, coverage may be cancelled after not less than 30 days written notice, except no written notice will be required for failure to pay premium;
      2. (ii) fraud or intentional material misrepresentation, except as described in paragraph (14) of this section, coverage may be cancelled after not less than 15 days written notice;
      3. (iii) fraud in the use of services or facilities, coverage may be cancelled after not less than 15 days written notice;
      4. (iv) failure to meet eligibility requirements other than the requirement that the subscriber reside, live, or work in the service area, coverage may be cancelled immediately, subject to continuation of coverage and conversion privilege provisions, if applicable;
      5. (v) misconduct detrimental to safe plan operations and the delivery of services, coverage may be cancelled immediately;
      6. (vi) failure of the enrollee and a plan physician to establish a satisfactory patient-physician relationship if it is shown that the HMO has, in good faith, provided the enrollee with the opportunity to select an alternative plan physician, the enrollee is notified in writing at least 30 days in advance that the HMO considers the patient-physician relationship to be unsatisfactory and specifies the changes that are necessary in order to avoid termination, and the enrollee has failed to make such changes, coverage may be cancelled at the end of the 30 days.
      7. (vii) the subscriber neither resides, lives, or works in the service area of the HMO, or area for which the HMO is authorized to do business, but only if coverage is terminated uniformly without regard to any health status-related factor of enrollees, coverage may be cancelled after 30 days written notice. Coverage for a child who is the subject of a medical support order cannot be cancelled solely because the child does not reside, live or work in the service area.

   2. (B) Cancellation by an HMO of a group requires at least 60 days prior notice to the group except in the cases of:

      1. (i) nonpayment of premium, all coverage may be cancelled at the end of the grace period as described in paragraph (13) of this section;
      2. (ii) fraud on the part of the group, after 15 days written notice;
      3. (iii) for employer groups, violation of participation or contribution rules, coverage may be cancelled in accordance with §26.8(h) and §26.303(j) of this title (relating to Guaranteed Issue; Contribution and Participation Requirements and Coverage Requirements);

      4. (iv) for employer groups, in accordance with §26.16 and §26.309 of this title (relating to Refusal To Renew and Application To Reenter Small Employer Market and Refusal To Renew and Application To Reenter Large Employer Market), discontinuance of:

         1. (I) each of its small or large employer coverages; or
         2. (II) a particular type of small or large employer coverage.
      5. (v) no enrollee resides, lives, or works in the service area of the HMO, or area for which the HMO is authorized to do business, but only if the coverage is terminated uniformly without regard to any health status-related factor of enrollees, coverage may be cancelled after 30 days written notice.
      6. (vi) membership of an employer in an association ceases, and if coverage is terminated uniformly without regard to the health status of a covered enrollee, coverage may be cancelled after 30 days written notice.
   3. (C) Cancellation by a group or individual contract holder in the case of a material change by the HMO to any provisions required to be disclosed to contract holders or enrollees pursuant to this chapter or other law, the contract may be canceled after not less than 30 days written notice to the HMO.

   4. (D) Cancellation by an HMO of an individual contract in the case of:

      1. (i) nonpayment of premiums in accordance with the terms of the contract, including any timeliness provisions, may be cancelled without written notice, subject to paragraph (13) of this section.
      2. (ii) fraud or intentional material misrepresentation, except as described in paragraph (14) of this section, coverage may be cancelled after not less than 15 days written notice.
      3. (iii) fraud in the use of services or facilities, coverage may be cancelled after not less than 15 days written notice.
      4. (iv) the subscriber neither resides, lives, or works in the service area of the HMO, or area for which the HMO is authorized to do business, but only if coverage is terminated uniformly without regard to any health status-related factor of enrollees, coverage may be cancelled after 30 days written notice. Coverage for a child who is the subject of a medical support order cannot be cancelled solely because the child does not reside, live or work in the service area.
      5. (v) termination by discontinuance of a particular type of individual coverage by the HMO in that service area, but only if coverage is discontinued uniformly without regard to health status-related factors of enrollees and dependents of enrollees who may become eligible for coverage, coverage may be cancelled after 90 days written notice, in which case the HMO must offer to each enrollee on a guaranteed-issue basis any other individual basic health care coverage offered by the HMO in that service area.
      6. (vi) termination by discontinuance of all individual basic health care coverage by the HMO in that service area, but only if coverage is discontinued uniformly without regard to health status-related factors of enrollees and dependents of enrollees who may become eligible for coverage, coverage may be cancelled after 180 days written notice to the commissioner and the enrollees, in which case the HMO may not re-enter the individual market in that service area for five years beginning on the date of discontinuance at the last coverage not renewed.
4. (4) Claim payment procedure--a provision that sets forth the procedure for paying claims, including any time frame for payment of claims which must be in accordance with the Insurance Code Articles 21.55 and 20A.09(j) and the applicable rules.
5. (5) Complaint and appeal procedures--a description of the HMO's complaint and appeal process available to complainants.
6. (6) Continuation of coverage--group agreements must contain a provision providing for mandatory continuation of coverage for enrollees who were continuously covered under a group certificate for three months prior to termination of the group coverage, or newborn or newly adopted children of enrollees with three months prior continuous coverage, that is no less favorable than provided by the Insurance Code Article 20A.09(k). An enrollee shall have the option to continue coverage as provided for by the Insurance Code Article 20A.09(k), upon completion of any continuation of coverage provided under The Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) (Public Law Number 99-272, 100 stat. 222) and any amendments thereto. A dependent, upon completion of any continuation of coverage provided under the Insurance Code Article 3.51-6 §3B, shall have the privilege to continue coverage for the 6 months prescribed by the Insurance Code Article 20A.09(k). The mandatory continuation privilege and conversion option, if elected to be offered, must be offered to the enrollee not less than 30 days prior to the expiration of the COBRA or Article 3.51-6 §3B continuation coverage period. Not less than 30 days before the end of the six months after the date an enrollee has elected continuation under Article 20A.09(k), a basic service HMO shall notify the enrollee that he/she may be eligible for coverage under the Texas Health Insurance Risk Pool as provided under the Insurance Code Article 3.77, and shall provide the address and toll-free number of the pool.
7. (7) Definitions--a provision defining any words in the evidence of coverage which have other than the usual meaning. Definitions must be in alphabetical order.
8. (8) Effective date--a statement of the effective date requirements of various kinds of enrollees.

9. (9) Eligibility--a statement of the eligibility requirements for membership, including:

   1. (A) that the subscriber must reside, live or work in the service area and the legal residence of any enrolled dependents must be the same as the subscriber, or the subscriber must reside, live or work in the service area and the residence of any enrolled dependents must be:

      1. (i) in the service area with the person having temporary or permanent conservatorship or guardianship of such dependents, including adoptees or children who have become the subject of a suit for adoption by the enrollee, where the subscriber has legal responsibility for the health care of such dependents;
      2. (ii) in the service area under other circumstances where the subscriber is legally responsible for the health care of such dependents;
      3. (iii) in the service area with the subscriber's spouse; or
      4. (iv) anywhere in the United States for a child whose coverage under a plan is required by a medical support order.
   2. (B) the conditions under which dependent enrollees may be added to those originally covered;
   3. (C) any limiting age for subscriber and dependents;

   4. (D) a clear statement regarding the coverage of newborn children:

      1. (i) No evidence of coverage may contain any provision excluding or limiting coverage for a newborn child of the subscriber or the subscriber's spouse.
      2. (ii) Congenital defects must be treated the same as any other illness or injury for which coverage is provided.
      3. (iii) The HMO may require that the subscriber notify the HMO during the initial 31 days after the birth of the child and pay any premium required to continue coverage for the newborn child.
      4. (iv) An HMO shall not require that a newborn child receive health care services only from network physicians or providers after the birth if the newborn child is born outside the HMO service area due to an emergency, or born in a non-network facility to a mother who does not have HMO coverage. The HMO may require that the newborn be transferred to a network facility at the HMO's expense and, if applicable, to a network provider when such transfer is medically appropriate as determined by the newborn's treating physician.
      5. (v) A newborn child of the subscriber or subscriber's spouse is entitled to coverage during the initial 31 days following birth. The HMO shall allow an enrollee 31 days after the birth of the child to notify the HMO, either verbally or in writing, of the addition of the newborn as a covered dependent.
   5. (E) a clear statement regarding the coverage of the subscriber's grandchildren under the conditions under which such coverage is required by the Insurance Code Article 3.70-2, subsection (L).

10. (10) Emergency services--a description of how to obtain services in emergency situations including:

    1. (A) what to do in case of an emergency occurring outside or inside the service area;
    2. (B) a statement of any restrictions or limitations on out-of-area services;
    3. (C) a statement that the HMO will provide for any medical screening examination or other evaluation required by state or federal law that is necessary to determine whether an emergency medical condition exists in a hospital emergency facility or comparable facility;
    4. (D) a statement that necessary emergency care services will be provided, including the treatment and stabilization of an emergency medical condition; and
    5. (E) a statement that where stabilization of an emergency condition originated in a hospital emergency facility or comparable facility, as defined in subparagraph (G) of this section, treatment subject to such stabilization shall be provided to enrollees as approved by the HMO, provided that the HMO is required to approve or deny coverage of poststabilization care as requested by a treating physician or provider. Approval or denial of such treatment shall be made within the time appropriate to the circumstances relating to the delivery of the services and the condition of the patient, but in no case is to exceed one hour from the time of the request.

    6. (F) For purposes of this paragraph, "comparable facility" includes the following:

       1. (i) any stationary or mobile facility, including, but not limited to, Level V Trauma Facilities and Rural Health Clinics which have licensed and/or certified personnel and equipment to provide Advanced Cardiac Life Support (ACLS) consistent with American Heart Association (AHA) and American Trauma Society (ATS) standards of care;

       2. (ii) for purposes of emergency care related to mental illness, a mental health facility that can provide 24-hour residential and psychiatric services and that is:

          1. (I) a facility operated by the Texas Department of Mental Health and Mental Retardation;
          2. (II) a private mental hospital licensed by the Texas Department of Health;
          3. (III) a community center as defined by the Texas Health and Safety Code, §534.001;
          4. (IV) a facility operated by a community center or other entity the Texas Department of Mental Health and Mental Retardation designates to provide mental health services;
          5. (V) an identifiable part of a general hospital in which diagnosis, treatment, and care for persons with mental illness is provided and that is licensed by the Texas Department of Health; or
          6. (VI) a hospital operated by a federal agency.
11. (11) Entire contract, amendments--a provision stating that the form, applications, if any, and any attachments constitute the entire contract between the parties and that, to be valid, any change in the form must be approved by an officer of the HMO and attached to the affected form and that no agent has the authority to change the form or waive any of the provisions.
12. (12) Exclusions and limitations--a provision setting forth any exclusions and limitations on basic, limited, or single health care services.
13. (13) Grace period--a provision for a grace period of at least 30 days for the payment of any premium falling due after the first premium during which the coverage remains in effect. A charge may be added to the premium by the HMO for late payment received within the grace period. If payment is not received within the 30 days, coverage may be cancelled after the 30th day and the terminated members may be held liable for the cost of services received during the grace period, if this requirement is disclosed in the agreement.

14. (14) Incontestability:

    1. (A) All statements made by the subscriber on the enrollment application shall be considered representations and not warranties. The statements are considered to be truthful and are made to the best of the subscriber's knowledge and belief. A statement may not be used in a contest to void, cancel or non-renew an enrollee's coverage or reduce benefits unless:

       1. (i) it is in a written enrollment application signed by the subscriber; and
       2. (ii) a signed copy of the enrollment application is or has been furnished to the subscriber or the subscriber's personal representative.
    2. (B) An individual contract may only be contested because of fraud or intentional misrepresentation of material fact made on the enrollment application. A group certificate may only be contested because of fraud or intentional misrepresentation of material fact on the enrollment application. For small employer coverage, the misrepresentation shall be other than a misrepresentation related to health status.
    3. (C) For a group contract or certificate, the HMO may increase its premium to the appropriate level if the HMO determines that the subscriber made a material misrepresentation of health status on the application. The HMO must provide the contract holder 31 days prior written notice of any premium rate change.
15. (15) Out-of-network services--Each contract between an HMO and a contract holder must provide that if medically necessary covered services are not available through network physicians or providers, the HMO must, upon the request of a network physician or provider, within the time appropriate to the circumstances relating to the delivery of the services and the condition of the patient, but in no event to exceed five business days after receipt of reasonably requested documentation, allow a referral to a non-network physician or provider and shall fully reimburse the non-network provider at the usual and customary or an agreed upon rate. For purposes of determining whether medically necessary covered services are available through network physicians or providers, the HMO's entire network, rather than limited provider networks within the HMO delivery network, shall be offered. The enrollee shall not be required to change his or her primary care physician or specialist providers to receive medically necessary covered services that are not available within the limited provider network. Each contract must further provide for a review by a specialist of the same or similar specialty as the type of physician or provider to whom a referral is requested before the HMO may deny a referral.
16. (16) Schedule of charges--A statement that discloses the HMO's right to change the rate charged with 30 days written notice pursuant to the Insurance Code Article 3.51-10.
17. (17) Service area--A description and a map of the service area, with key and scale, which shall identify the county, or counties, or portions thereof, to be served indicating primary care physicians, hospitals, and emergency care sites. A ZIP code map and a provider list may be used to meet the requirement.
18. (18) Termination due to attaining limiting age--A provision that a child's attainment of a limiting age does not operate to terminate the coverage of the child while that child is incapable of self-sustaining employment due to mental retardation or physical disability, and chiefly dependent upon the subscriber for support and maintenance. The subscriber may be required to furnish proof of such incapacity and dependency within 31 days of the child's attainment of the limiting age and subsequently as required, but not more frequently than annually following the child's attainment of such limiting age.
19. (19) Termination due to student dependent's change in status--Each group agreement and certificate that conditions dependent coverage for a child twenty-one years of age or older on the child's being a full-time student at an educational institution shall contain a provision in accordance with the Insurance Code Article 21.24-2.
20. (20) Conformity with state law--A provision that if the agreement or certificate contains any provision not in conformity with the Act or other applicable laws it shall not be rendered invalid but shall be construed and applied as if it were in full compliance with the Act and other applicable laws.
21. (21) Conformity with Medicare supplement minimum standards and long-term care minimum standards--Each group, individual and conversion agreement and group certificate must comply with Chapter 3, Subchapter T of this title (relating to Minimum Standards for Medicare Supplement Policies), referred to in this paragraph as Medicare supplement rules, and Chapter 3, Subchapter Y of this title (relating to Minimum Standards for Benefits for Long-Term Care Coverage Under Individual and Group Policies), referred to in this paragraph as long-term care rules, where applicable. If there is a conflict between the Medicare supplement rules and/or the long-term care rules and the HMO rules, the Medicare supplement rules or long-term care rules shall govern to the exclusion of the conflicting provisions of the HMO rules. Where there is no conflict, both the Medicare supplement rules and/or the long-term care rules and the HMO rules shall be followed where applicable.
22. (22) Nonprimary care physician specialist as primary care physician--A provision that allows enrollees with chronic, disabling, or life threatening illnesses to apply to the HMO's medical director to utilize a nonprimary care physician specialist as a primary care physician as set forth in the Insurance Code Article 20A.09(g-i).

23. (23) Designated obstetrician or gynecologist--Individual, conversion and group agreements and certificates, except small employer plans as defined by the Insurance Code Chapter 26, contain a provision that permits an enrollee to select, in addition to a primary care physician, an obstetrician or gynecologist to provide health care services within the scope of the professional specialty practice of a properly credentialed obstetrician or gynecologist, and subject to the provisions of the Insurance Code Article 21.53D. An enrollee shall not be precluded from selecting a family physician, internal medicine physician, or other qualified physician to provide obstetrical or gynecological care.

    1. (A) An HMO shall permit an enrollee who designates an obstetrician or gynecologist direct access to the health care services of the designated obstetrician or gynecologist without a referral by the enrollee's primary care physician or prior authorization or precertification from the HMO.

    2. (B) The access to health care services of an obstetrician or gynecologist, includes, but is not limited to:

       1. (i) one well-woman examination per year;
       2. (ii) care related to pregnancy;
       3. (iii) care for all active gynecological conditions; and
       4. (iv) diagnosis, treatment, and referral to a specialist within the HMO's network for any disease or condition within the scope of the designated professional practice of a properly credentialed obstetrician or gynecologist, including treatment of medical conditions concerning the breasts.
    3. (C) An HMO may require an enrollee who designates an obstetrician or gynecologist to designate the obstetrician or gynecologist from within the limited provider network to which the enrollee's primary care physician belongs.
    4. (D) An HMO may require a designated obstetrician or gynecologist to forward information concerning the medical care of the patient to the primary care physician. However, failure to provide this information may not result in any penalty, financial or otherwise, being imposed upon the obstetrician or gynecologist by the HMO if the obstetrician or gynecologist has made a reasonable and good faith effort to provide the information to the primary care physician.
    5. (E) An HMO may limit an enrollee in the plan to self-referral to one participating obstetrician and gynecologist for both gynecological care and obstetrical care. Such limitation shall not affect the right of the enrollee to select the physician who provides that care.
    6. (F) An HMO shall include in its enrollment form a space in which an enrollee may select a designated obstetrician or gynecologist as required in the Insurance Code Article 21.53D. The enrollment form must specify that the enrollee is not required to select an obstetrician or gynecologist, but may instead receive obstetrical or gynecological services from her primary care physician or primary care provider. Such enrollee shall have the right at all times to select or change a designated obstetrician or gynecologist. An HMO may limit an enrollee's request to change an obstetrician or gynecologist to no more than four changes in any 12-month period.
    7. (G) An enrollee that elects to receive obstetrical or gynecological services from a primary care physician (i.e., a family physician, internal medicine physician, or other qualified physician) shall adhere to the HMO's standard referral protocol when accessing other specialty obstetrical or gynecological services.
24. (24) Diagnosis of Alzheimer's disease--An HMO that provides for the treatment of Alzheimer's disease must provide that a clinical diagnosis of Alzheimer's disease by a physician licensed in this state pursuant to the Insurance Code Article 3.78 shall satisfy any requirement for demonstrable proof of organic disease.
25. (25) Drug Formulary changes--If the agreement or certificate includes benefits for prescription drugs, a provision that the drug formulary may change during the contract year.
26. (26) Inpatient care by non-primary care physician--If an HMO or limited provider network provides for an enrollee's care by a physician other than the enrollee's primary care physician while the enrollee is in an inpatient facility (e.g., hospital or skilled nursing facility), a provision that upon admission to the inpatient facility a physician other than the primary care physician may direct and oversee the enrollee's care.

Source Note:The provisions of this §11.506 adopted to be effective January 1, 1980, 4 TexReg 4622; amended to be effective December 6, 1984, 9 TexReg 6011; amended to be effective July 15, 1986, 11 TexReg 3074; amended to be effective December 4, 1987, 12 TexReg 4363; amended to be effective August 17, 1992, 17 TexReg 5356; amended to be effective June 1, 1996, 21 TexReg 2467; amended to be effective November 2, 1998, 23 TexReg 11347.