SRC-AAA S.B. 641 75(R)   BILL ANALYSIS


Senate Research Center   S.B. 641
By: Harris
Economic Development
3-17-97
As Filed


DIGEST 

Currently, numerous managed care organizations utilize various "withhold
pools" and "risk/bonus arrangements" that create a system of incentives
and penalties for providers.  If the physicians and providers stay within
certain claims targets, they are financially rewarded, or otherwise
penalized. Thus, one patient with excessive claims during a single period
may have a significant adverse effect on a provider's income. S.B. 641
provides for certain disciplinary actions for physicians who accept
financial incentives which act directly or indirectly as inducements to
limit medically necessary services. 

PURPOSE

As proposed, S.B. 641 provides for certain disciplinary actions for
physicians who accept financial incentives. 

RULEMAKING AUTHORITY

This bill does not grant any additional rulemaking authority to a state
officer, institution, or agency. 

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Section 3.08, Article 4495b, V.T.C.S.(Medical Practice
Act), to provide that the Texas State Board of Medical Examiners (board)
may take disciplinary actions against persons applying for a medical
license for accepting a payment or other financial incentives intended to
induce a physician to limit medically necessary services to a patient,
subject to Subsection (b). Provides that Subsection (a)(4)(J) of this
section does not prohibit a physician from entering into an agreement
under which the physician is compensated under a capitated method of
compensation. Provides that a capitated method of compensation is a method
of compensation under which a physician is paid an amount of money for a
patient without regard to the services actually provided to the patient,
in exchange for which the physician arranges specified services during a
specific period of time. 

SECTION 2. Amends Section 3.07(f), 4495b, V.T.C.S., to require it to be
unlawful for any person to do any act in Subsection (a)(1) of Section 3.08
of this Act. 

SECTION 3. Effective date: September 1, 1997.

SECTION 4. Emergency clause.