GEC H.B. 3197 75(R)    BILL ANALYSIS


BUSINESS & INDUSTRY
H.B. 3197
By: Janek
3-28-97
Committee Report (Amended)



BACKGROUND 

Insurance carriers contract with utilization review agents to make
determinations on the medical necessity of care delivered to patients.
Utilization review agents are regulated under general health insurance
policies by the Texas Department of Insurance. 

Many workers' compensation insurance carriers contract with utilization
review agents to make determinations on the medical necessity of health
care delivered to injured employees.  There are no provisions under the
Texas Labor Code, however, that provide for regulation of utilization
review agents performing reviews of workers' compensation medical cases. 

PURPOSE

This proposed legislation amends the Insurance Code to provide for
regulation by the Texas Department of Insurance of utilization review
agents who conduct utilization reviews under the workers' compensation
statute. 

RULEMAKING AUTHORITY

This bill delegates rulemaking authority to the Commissioner of Insurance
and to the Texas Workers' Compensation Commission in SECTION 1 - Section
14(c), Article 21.58A, Insurance Code. 

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Section 14 (c), Article 21.58A, Insurance Code to
extend the authority of the Texas Department of Insurance to regulate
utilization review agents who provide services to workers' compensation
insurance carriers.  This new authority does not affect the authority of
the Texas Workers' Compensation Commission to exercise its powers granted
under Subtitle A, Title 4, Texas Labor Code, and provides that, in the
event of a conflict, Chapter 408, Labor Code prevails. 

SECTION 2.  Sets September 1, 1997 as the effect date of the Act for
utilization reviews conducted on or after January 1, 1998. 

SECTION 3.  Suspends three day rule

EXPLANATION OF AMENDMENTS

Amend House Bill 3197 as follows:

 SECTION 1, Subsection (c), Line 19 is amended to read as follows:

 (Chapter 408, Labor Code, Chapter 408, Labor Code) Subtitle A, Title 5,
Labor Code, 

  Subtitle A, Title 5, Labor Code prevails.  The