By: Sibley, et al. S.B. No. 386
A BILL TO BE ENTITLED
AN ACT
1-1 relating to health care liability claims.
1-2 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-3 SECTION 1. Title 4, Civil Practice and Remedies Code, is
1-4 amended by adding Chapter 88 to read as follows:
1-5 CHAPTER 88. HEALTH CARE LIABILITY
1-6 Sec. 88.001. DEFINITIONS. In this chapter:
1-7 (1) "Appropriate and medically necessary" means the
1-8 standard for health care services as determined by physicians and
1-9 health care providers in accordance with the prevailing practices
1-10 and standards of the medical profession and community.
1-11 (2) "Enrollee" means an individual who is enrolled in
1-12 a health care plan, including covered dependents.
1-13 (3) "Health care plan" means any plan whereby any
1-14 person undertakes to provide, arrange for, pay for, or reimburse
1-15 any part of the cost of any health care services.
1-16 (4) "Health care provider" means a person or entity as
1-17 defined in Section 1.03(a)(3), Medical Liability and Insurance
1-18 Improvement Act of Texas (Article 4590i, Vernon's Texas Civil
1-19 Statutes).
1-20 (5) "Health care treatment decision" means a
1-21 determination made when medical services are actually provided by
1-22 the health care plan and a decision which affects the quality of
1-23 the diagnosis, care, or treatment provided to the plan's insureds
2-1 or enrollees.
2-2 (6) "Health insurance carrier" means a company that is
2-3 authorized to issue a policy of accident and sickness insurance
2-4 under Section 1, Chapter 397, Acts of the 54th Legislature, 1955
2-5 (Article 3.70-1, Vernon's Texas Insurance Code).
2-6 (7) "Health maintenance organization" means an
2-7 organization licensed under the Texas Health Maintenance
2-8 Organization Act (Chapter 20A, Vernon's Texas Insurance Code).
2-9 (8) "Managed care entity" means any entity which
2-10 delivers, administers, or assumes risk for health care services
2-11 with systems or techniques to control or influence the quality,
2-12 accessibility, utilization, or costs and prices of such services
2-13 to a defined enrollee population, but does not include an employer
2-14 acting on behalf of its employees or the employees of one or more
2-15 subsidiaries or affiliated corporations of the employer.
2-16 (9) "Physician" means:
2-17 (A) an individual licensed to practice medicine
2-18 in this state;
2-19 (B) a professional association organized under
2-20 the Texas Professional Association Act (Article 1528f, Vernon's
2-21 Texas Civil Statutes) or a nonprofit health corporation certified
2-22 under Section 5.01, Medical Practice Act (Article 4495b, Vernon's
2-23 Texas Civil Statutes); or
2-24 (C) another person wholly owned by physicians.
2-25 (10) "Ordinary care" means, in the case of a health
3-1 insurance carrier, health maintenance organization, or managed care
3-2 entity, that degree of care that a health insurance carrier, health
3-3 maintenance organization, or managed care entity of ordinary
3-4 prudence would use under the same or similar circumstances. In the
3-5 case of a person who is an employee, agent, ostensible agent, or
3-6 representative of a health insurance carrier, health maintenance
3-7 organization, or managed care entity, "ordinary care" means that
3-8 degree of care that a person of ordinary prudence in the same
3-9 profession, specialty, or area of practice as such person would use
3-10 in the same or similar circumstances.
3-11 Sec. 88.002. APPLICATION. (a) A health insurance carrier,
3-12 health maintenance organization, or other managed care entity for a
3-13 health care plan has the duty to exercise ordinary care when making
3-14 health care treatment decisions and is liable for damages for harm
3-15 to an insured or enrollee proximately caused by its failure to
3-16 exercise such ordinary care.
3-17 (b) A health insurance carrier, health maintenance
3-18 organization, or other managed care entity for a health care plan
3-19 is also liable for damages for harm to an insured or enrollee
3-20 proximately caused by the health care treatment decisions made by
3-21 its:
3-22 (1) employees;
3-23 (2) agents;
3-24 (3) ostensible agents; or
3-25 (4) representatives who are acting on its behalf and
4-1 over whom it has the right to exercise influence or control or has
4-2 actually exercised influence or control which result in the failure
4-3 to exercise ordinary care.
4-4 (c) The standards in Subsections (a) and (b) create no
4-5 obligation on the part of the health insurance carrier, health
4-6 maintenance organization, or other managed care entity to provide
4-7 to an insured or enrollee treatment which is not covered by the
4-8 health care plan of the entity.
4-9 (d) A health insurance carrier, health maintenance
4-10 organization, or managed care entity may not remove a physician or
4-11 health care provider from its plan or refuse to renew the physician
4-12 or health care provider with its plan for advocating on behalf of
4-13 an enrollee for appropriate and medically necessary health care for
4-14 the enrollee.
4-15 (e) A health insurance carrier, health maintenance
4-16 organization, or other managed care entity may not enter into a
4-17 contract with a physician, hospital, or other health care provider
4-18 or pharmaceutical company which includes an indemnification or hold
4-19 harmless clause for the acts or conduct of the health insurance
4-20 carrier, health maintenance organization, or other managed care
4-21 entity. Any such indemnification or hold harmless clause in an
4-22 existing contract is hereby declared void.
4-23 (f) Nothing in any law of this state prohibiting a health
4-24 insurance carrier, health maintenance organization, or other
4-25 managed care entity from practicing medicine or being licensed to
5-1 practice medicine may be asserted as a defense by such health
5-2 insurance carrier, health maintenance organization, or other
5-3 managed care entity in an action brought against it pursuant to
5-4 this section or any other law.
5-5 (g) In an action against a health insurance carrier, health
5-6 maintenance organization, or managed care entity, a finding that a
5-7 physician or other health care provider is an employee, agent,
5-8 ostensible agent, or representative of such health insurance
5-9 carrier, health maintenance organization, or managed care entity
5-10 shall not be based solely on proof that such person's name appears
5-11 in a listing of approved physicians or health care providers made
5-12 available to insureds or enrollees under a health care plan.
5-13 (h) This chapter does not apply to workers' compensation
5-14 insurance coverage as defined in Section 401.011, Labor Code.
5-15 SECTION 2. This Act takes effect September 1, 1997, and
5-16 applies only to a cause of action that accrues on or after that
5-17 date. An action that accrues before the effective date of this Act
5-18 is governed by the law applicable to the action immediately before
5-19 the effective date of this Act, and that law is continued in effect
5-20 for that purpose.
5-21 SECTION 3. The importance of this legislation and the
5-22 crowded condition of the calendars in both houses create an
5-23 emergency and an imperative public necessity that the
5-24 constitutional rule requiring bills to be read on three several
5-25 days in each house be suspended, and this rule is hereby suspended.