1. Texas Department of Insurance
SILENT PPOs
Texas Department of Insurance
SILENT PPOs - Jennifer edits

2. What is a “PPO?”
PPO is an acronym commonly used to refer to a preferred provider organization.
Many persons and institutions use the term differently to refer to a health plan which offers preferred provider benefits.

3. For purposes of discussion, a PPO is:
“A group of health-care providers (such as doctors, hospitals, and pharmacies) that agree to provide medical services at a discounted cost to covered persons in a given geographic area.” BLACK’S LAW DICTIONARY 1217 (8th ed. 2004)
“A group of health care providers each of whom agrees to offer services to a given employer or insurer at a lower cost in return for a stable volume of patients or other incentives.” ROBERT W. STRAIN, INSURANCE WORDS AND THEIR MEANINGS 99 (1987).

4. What is a “silent PPO?”
A “silent PPO” buys, sells, leases or otherwise transfers provider discounts without regard for steerage of patients to preferred providers.
These PPOs are also referred to as “ghost,” “non-directed,” or “blind” PPOs.

5. How are silent PPOs addressed in the Texas Insurance Code?
Preferred Provider Benefit Plan (PPBP)
TEX. INS. CODE § addresses the sale, lease or transfer of information regarding the payment or reimbursement terms of a preferred provider contract, including a contract with a preferred provider organization. Chapter 1301 applies to preferred provider benefit plans. (See § (9).)

6. How are silent PPOs addressed in the Texas Insurance Code?
TEX. INS. CODE § sets forth the general applicability of TEX INS. CODE Chapter 1301: “[e]ach preferred provider benefit plan offered in this state must comply with this chapter.”
Further, TEX. INS. CODE § clarifies that Chapter 1301 “does not apply to a provision for dental care benefits in a health insurance policy.”

7. How are silent PPOs addressed in the Texas Insurance Code?
Preferred Provider Benefit Plans (PPBPs)
Over which parties does TDI have authority?
Insurers (TEX. INS. CODE § (5))
Third party administrators (TPAs) TEX. INS. CODE § (1))

8. How are silent PPOs addressed in the Texas Insurance Code?
Workers’ Comp Health Care Networks (WC Networks)
TEX. INS. CODE § sets forth specific restrictions on an insurance carrier’s or third party administrator’s ability to reimburse providers on a discounted basis for services that are provided to an injured employee. Chapter 1305 applies to workers’ compensation health care networks.
SILENT PPOs - Jennifer edits

9. How are silent PPOs addressed in the Texas Insurance Code?
WC Networks vs. PPBP
TEX. INS. CODE § has a much broader application than does TEX. INS. CODE § Chapter 1305 provides standards for the certification, administration, evaluation and enforcement of the delivery of health care services to injured employees by networks contracting with or established by carriers.

10. How are silent PPOs addressed in the Texas Insurance Code?
WC Networks
Over which parties does TDI have authority?
Insurance Carriers (TEX. LAB. CODE § (27))
TPAs (TEX. INS. CODE § (1))

11. How are silent PPOs addressed in the Texas Insurance Code?
WC Networks
Chapter 1305 sets rigorous requirements to ensure that a network has the ability to provide continuity, accessibility, and quality of services and imposes a quality of care requirement that each network implement a documented process for the selection and retention of contracted providers in accordance with rules adopted by the commissioner. TEX. INS. CODE §§ (d)(1), (b) and (g), and (h).

12. How are silent PPOs addressed in the Texas Insurance Code?
WC Networks
TDI rule §10.42(b)(14) requires provider contracts and subcontracts to include a statement that the provider specifically agrees to provide treatment for injured employees who obtain workers’ compensation health care services through the network that is specifically identified in the contract as a contracting party. (28 TEX. ADMIN. CODE)

13. How are silent PPOs addressed in the Texas Insurance Code?
WC Networks
Since TDI certifies the WC networks, and as part of certification, reviews contracts, the networks are subject to a higher level of scrutiny.
SILENT PPOs - Jennifer edits