SECTION 3.3706. Designation as a Preferred Provider, Decision to Withhold Designation, Termination of a Preferred Provider, Review of Process

(a) Access to designation as a preferred provider. Physicians, practitioners, institutional providers, and health care providers other than physicians, practitioners, and institutional providers, if other health care providers are included by an insurer as preferred providers, that are licensed to treat injuries or illnesses or to provide services covered by the preferred provider benefit plan and that comply with the terms and conditions established by the insurer for designation as preferred providers, are eligible to apply for and must be afforded a fair, reasonable, and equitable opportunity to become preferred providers, subject to subsection (b) of this section.

(1) An insurer initially sponsoring a preferred provider benefit plan is required to notify all physicians and practitioners in the service area covered by the plan of its intent to offer the plan and of the opportunity to apply to participate.

(2) Subsequently, an insurer is required to annually notify all non-contracting physicians and practitioners in the service area covered by the plan of the existence of the plan and the opportunity to apply to participate in the plan.

(3) An insurer is required, upon request, to make available to any physician or provider information concerning the application process and qualification requirements, including the use of economic profiling by the insurer, used by the insurer to admit a provider to the plan.

(4) All notifications required to be made by an insurer pursuant to this subsection are required to be made by publication or distributed in writing to each physician and practitioner in the same manner.

(5) Selection standards used by the insurer in choosing participating preferred providers must not directly or indirectly:

(A) avoid high risk populations by excluding physicians or providers because the physicians or providers are located in geographic areas that contain populations presenting a risk of higher than average claims, losses or health services utilization; or

(B) exclude a physician or provider because the physician or provider treats or specializes in treating populations presenting a risk of higher than average claims, losses or health services utilization.

(b) Withholding preferred provider designation. An insurer may not unreasonably withhold designation as a preferred provider except that, unless otherwise limited by the Insurance Code or rule promulgated by the department, an insurer may reject an application from a physician or health care provider on the basis that the preferred provider benefit plan has sufficient qualified providers.

(1) An insurer is required to provide written notice of denial of any initial application to a physician or health care provider, which includes:

(A) the specific reason(s) for the denial; and

(B) in the case of physicians and practitioners, the right to a review of the denial as set forth in paragraph (2) of this subsection.

(2) An insurer must provide a reasonable review mechanism that incorporates, in an advisory role only, a review panel.

(A) The advisory review panel is required to be composed of not less than three individuals selected by the insurer from the list of physicians or practitioners in the applicable service area contracting with the insurer.

(B) At least one of the three individuals on the advisory review panel must be a physician or practitioner in the same or similar specialty as the physician or practitioner requesting review unless there is no physician or practitioner in the same or similar specialty contracting with the insurer.

(C) The list of physicians or practitioners required by subparagraph (A) of this paragraph is required to be provided to the insurer by the physicians or practitioners who contract with the insurer in the applicable service area.

(D) The recommendation of the advisory review panel is required to be provided upon request to the affected physician or practitioner.

(E) In the event that the insurer makes a determination that is contrary to the recommendation of the advisory review panel, a written explanation of the insurer's determination is required to be provided to the affected physician or practitioner upon request.

(c) Credentialing of preferred providers. Insurers must have a documented process for selection and retention of preferred providers sufficient to ensure that preferred providers are adequately credentialed. At a minimum, an insurer's credentialing standards must meet the standards promulgated by the National Committee for Quality Assurance (NCQA) or URAC to the extent that those standards do not conflict with other laws of this state. Insurers will be presumed to be in compliance with statutory and regulatory requirements regarding credentialing if they have received nonconditional accreditation or certification by the NCQA, the Joint Commission, URAC, or the Accreditation Association for Ambulatory Health Care.

(d) Notice of termination of a preferred provider contract. Before terminating a contract with a preferred provider, the insurer must provide written notice of termination, which includes:

(1) the specific reason(s) for the termination; and

(2) in the case of physicians or practitioners, notice of the right to request a review prior to termination that is conducted in the same manner as the review mechanism set forth in subsection (b)(2) of this section and that complies with the timelines set forth in subsections (e) - (h) of this section for requesting review, except in cases involving:

(A) imminent harm to patient health;

(B) an action by a state medical or other physician licensing board or other government agency which impairs the physician's or practitioner's ability to practice medicine or to provide services; or

(C) fraud or malfeasance.

(e) Review of a decision to terminate. To obtain a standard review of an insurer's decision to terminate him or her, a physician or practitioner must:

(1) make a written request to the insurer for a review of that decision within 10 business days of receipt of notification of the insurer's intent to terminate him or her; and

(2) deliver to the insurer, within 20 business days of receipt of notification of the insurer's intent to terminate him or her, any relevant documentation the physician or practitioner desires the advisory review panel and insurer to consider in the review process.

(f) Completion of the review process. The review process, including the recommendation of the advisory review panel and the insurer's determination as required by subsection (b)(2)(E) of this section, must be completed and the results provided to the physician or practitioner within 60 calendar days of the insurer's receipt of the request for review.

(g) Expedited review process. To obtain an expedited review of an insurer's decision to terminate him or her, a physician or practitioner must:

(1) make a written request to the insurer for a review of that decision within five business days of receipt of notification of the insurer's intent to terminate him or her; and

(2) deliver to the insurer, within 10 business days of receipt of notification of the insurer's intent to terminate him or her, any relevant documentation the physician or practitioner desires the advisory review panel and insurer to consider in the review process.

(h) Completion of the expedited review process. The expedited review process, including the recommendation of the advisory review panel and the insurer's determination as required by subsection (b)(2)(E) of this section, must be completed and the results provided to the physician or practitioner within 30 calendar days of the insurer's receipt of the request for review.

(i) Confidentiality of information concerning the insured.

(1) An insurer is required to preserve the confidentiality of individual medical records and personal information used in its termination review process. Personal information of the insured includes, at a minimum, the insured's name, address, telephone number, social security number, and financial information.

(2) An insurer may not disclose or publish individual medical records or other confidential information about an insured without the prior written consent of the insured or unless otherwise required by law. An insurer may provide confidential information to the advisory review panel for the sole purpose of performing its advisory review function. Information provided to the advisory review panel is required to remain confidential.

(j) Notice to insureds.

(1) If the contract of a physician or practitioner is terminated for reasons other than at the preferred provider's request, an insurer may not notify insureds of the termination until the effective date of the termination or at such time as an advisory review panel makes a formal recommendation regarding the termination, whichever is later.

(2) If a physician or provider voluntarily terminates the physician's or provider's relationship with an insurer, the insurer must provide assistance to the physician or provider in assuring that the notice requirements are met as required by §3.3703(a)(18) of this title (relating to Contracting Requirements).

(3) If the contract of a physician or practitioner is terminated for reasons related to imminent harm, an insurer may notify insureds immediately.

Source Note: The provisions of this §3.3706 adopted to be effective July 15, 1999, 24 TexReg 5204; amended to be effective December 6, 2011, 36 TexReg 3411; amended to be effective February 21, 2013, 38 TexReg 827