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