AN ACT

 1-1     relating to review of and liability for certain health care

 1-2     treatment decisions.

 1-3           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

 1-4           SECTION 1.  Title 4, Civil Practice and Remedies Code, is

 1-5     amended by adding Chapter 88 to read as follows:

 1-6                     CHAPTER 88.  HEALTH CARE LIABILITY

 1-7           Sec. 88.001.  DEFINITIONS.  In this chapter:

 1-8                 (1)  "Appropriate and medically necessary" means the

 1-9     standard for health care services as determined by physicians and

1-10     health care providers in accordance with the prevailing practices

1-11     and standards of the medical profession and community.

1-12                 (2)  "Enrollee" means an individual who is enrolled in

1-13     a health care plan, including covered dependents.

1-14                 (3)  "Health care plan" means any plan whereby any

1-15     person undertakes to provide, arrange for, pay for, or reimburse

1-16     any part of the cost of any health care services.

1-17                 (4)  "Health care provider" means a person or entity as

1-18     defined in Section 1.03(a)(3), Medical Liability and Insurance

1-19     Improvement Act of Texas (Article 4590i, Vernon's Texas Civil

1-20     Statutes).

1-21                 (5)  "Health care treatment decision" means a

1-22     determination made when medical services are actually provided by

1-23     the health care plan and a decision which affects the quality of

 2-1     the diagnosis, care, or treatment provided to the plan's insureds

 2-2     or enrollees.

 2-3                 (6)  "Health insurance carrier" means an authorized

 2-4     insurance company that issues policies of accident and sickness

 2-5     insurance under Section 1, Chapter 397, Acts of the 54th

 2-6     Legislature, 1955 (Article 3.70-1, Vernon's Texas Insurance Code).

 2-7                 (7)  "Health maintenance organization" means an

 2-8     organization licensed under the Texas Health Maintenance

 2-9     Organization Act (Chapter 20A, Vernon's Texas Insurance Code).

2-10                 (8)  "Managed care entity" means any entity which

2-11     delivers, administers, or assumes risk for health care services

2-12     with systems or techniques to control or influence the quality,

2-13     accessibility,  utilization, or costs and prices of such services

2-14     to a defined enrollee population, but does not include an employer

2-15     purchasing coverage or acting on behalf of its employees or the

2-16     employees of one or more subsidiaries or affiliated corporations of

2-17     the employer or a pharmacy licensed by the State Board of Pharmacy.

2-18                 (9)  "Physician" means:

2-19                       (A)  an individual licensed to practice medicine

2-20     in this state;

2-21                       (B)  a professional association organized under

2-22     the Texas Professional Association Act (Article 1528f, Vernon's

2-23     Texas Civil Statutes) or a nonprofit health corporation certified

2-24     under Section 5.01, Medical Practice Act (Article 4495b, Vernon's

2-25     Texas Civil Statutes); or

 3-1                       (C)  another person wholly owned by physicians.

 3-2                 (10)  "Ordinary care" means, in the case of a health

 3-3     insurance carrier, health maintenance organization, or managed care

 3-4     entity, that degree of care that a health insurance carrier, health

 3-5     maintenance organization, or managed care entity of ordinary

 3-6     prudence would use under the same or similar circumstances.  In the

 3-7     case of a person who is an employee, agent, ostensible agent, or

 3-8     representative of a health insurance carrier, health maintenance

 3-9     organization, or managed care entity, "ordinary care" means that

3-10     degree of care that a person of ordinary prudence in the same

3-11     profession, specialty, or area of practice as such person would use

3-12     in the same or similar circumstances.

3-13           Sec. 88.002.  APPLICATION.  (a)  A health insurance carrier,

3-14     health maintenance organization, or other managed care entity for a

3-15     health care plan has the duty to exercise ordinary care when making

3-16     health care treatment decisions and is liable for damages for harm

3-17     to an insured or enrollee proximately caused by its failure to

3-18     exercise such ordinary care.

3-19           (b)  A health insurance carrier, health maintenance

3-20     organization, or other managed care entity for a health care plan

3-21     is also liable for damages for harm to an insured or enrollee

3-22     proximately caused by the health care treatment decisions made by

3-23     its:

3-24                 (1)  employees;

3-25                 (2)  agents;

 4-1                 (3)  ostensible agents; or

 4-2                 (4)  representatives who are acting on its behalf and

 4-3     over whom it has the right to exercise influence or control or has

 4-4     actually exercised influence or control which result in the failure

 4-5     to exercise ordinary care.

 4-6           (c)  It shall be a defense to any action asserted against a

 4-7     health insurance carrier, health maintenance organization, or other

 4-8     managed care entity for a health care plan that:

 4-9                 (1)  neither the health insurance carrier, health

4-10     maintenance organization, or other managed care entity, nor any

4-11     employee, agent, ostensible agent, or representative for whose

4-12     conduct such health insurance carrier, health maintenance

4-13     organization, or other managed care entity is liable under

4-14     Subsection (b), controlled, influenced, or participated in the

4-15     health care treatment decision; and

4-16                 (2)  the health insurance carrier, health maintenance

4-17     organization, or other managed care entity did not deny or delay

4-18     payment for any treatment prescribed or recommended by a provider

4-19     to the insured or enrollee.

4-20           (d)  The standards in Subsections (a) and (b) create no

4-21     obligation on the part of the health insurance carrier, health

4-22     maintenance organization, or other managed care entity to provide

4-23     to an insured or enrollee treatment which is not covered by the

4-24     health care plan of the entity.

4-25           (e)  This chapter does not create any liability on the part

 5-1     of an employer, an employer group purchasing organization, or a

 5-2     pharmacy licensed by the State Board of Pharmacy that purchases

 5-3     coverage or assumes risk on behalf of its employees.

 5-4           (f)  A health insurance carrier, health maintenance

 5-5     organization, or managed care entity may not remove a physician or

 5-6     health care provider from its plan or refuse to renew the physician

 5-7     or health care provider with its plan for advocating on behalf of

 5-8     an enrollee for appropriate and medically necessary health care for

 5-9     the enrollee.

5-10           (g)  A health insurance carrier, health maintenance

5-11     organization, or other managed care entity may not enter into a

5-12     contract with a physician, hospital, or other health care provider

5-13     or pharmaceutical company which includes an indemnification or hold

5-14     harmless clause for the acts or conduct of the health insurance

5-15     carrier, health maintenance organization, or other managed care

5-16     entity.  Any such indemnification or hold harmless clause in an

5-17     existing contract is hereby declared void.

5-18           (h)  Nothing in any law of this state prohibiting a health

5-19     insurance carrier, health maintenance organization, or other

5-20     managed care entity from practicing medicine or being licensed to

5-21     practice medicine may be asserted as a defense by such health

5-22     insurance carrier, health maintenance organization, or other

5-23     managed care entity in an action brought against it pursuant to

5-24     this section or any other law.

5-25           (i)  In an action against a health insurance carrier, health

 6-1     maintenance organization, or managed care entity, a finding that a

 6-2     physician or other health care provider is an employee, agent,

 6-3     ostensible agent, or representative of such health insurance

 6-4     carrier, health maintenance organization, or managed care entity

 6-5     shall not be based solely on proof that such person's name appears

 6-6     in a listing of approved physicians or health care providers made

 6-7     available to insureds or enrollees under a health care plan.

 6-8           (j)  This chapter does not apply to workers' compensation

 6-9     insurance coverage as defined in Section 401.011, Labor Code.

6-10           (k)  An enrollee who files an action under this chapter shall

6-11     comply with the requirements of Section 13.01, Medical Liability

6-12     and Insurance Improvement Act of Texas (Article 4590i, Vernon's

6-13     Texas Civil Statutes), as it relates to cost bonds, deposits, and

6-14     expert reports.

6-15           Sec. 88.003.  LIMITATIONS ON CAUSE OF ACTION.  (a)  A person

6-16     may not maintain a cause of action under this chapter against a

6-17     health insurance carrier, health maintenance organization, or other

6-18     managed care entity that is required to comply with the utilization

6-19     review requirements of Article 21.58A, Insurance Code, or the Texas

6-20     Health Maintenance Organization Act (Chapter 20A, Vernon's Texas

6-21     Insurance Code), unless the affected insured or enrollee or the

6-22     insured's or enrollee's representative:

6-23                 (1)  has exhausted the appeals and review applicable

6-24     under the utilization review requirements; or

6-25                 (2)  before instituting the action:

 7-1                       (A)  gives written notice of the claim as

 7-2     provided by Subsection (b); and

 7-3                       (B)  agrees to submit the claim to a review by an

 7-4     independent review organization under Article 21.58A, Insurance

 7-5     Code, as required by Subsection (c).

 7-6           (b)  The notice required by Subsection (a)(2)(A) must be

 7-7     delivered or mailed to the health insurance carrier, health

 7-8     maintenance organization, or managed care entity against whom the

 7-9     action is made not later than the 30th day before the date the

7-10     claim is filed.

7-11           (c)  The insured or enrollee or the insured's or enrollee's

7-12     representative must submit the claim to a review by an independent

7-13     review organization if the health insurance carrier, health

7-14     maintenance organization, or managed care entity against whom the

7-15     claim is made requests the review not later than the 14th day after

7-16     the date notice under Subsection (a)(2)(A) is received by the

7-17     health insurance carrier, health maintenance organization, or

7-18     managed care entity.  If the health insurance carrier, health

7-19     maintenance organization, or managed care entity does not request

7-20     the review within the period specified by this subsection, the

7-21     insured or enrollee or the insured's or enrollee's representative

7-22     is not required to submit the claim to independent review before

7-23     maintaining the action.

7-24           (d)  Subject to Subsection (e), if the enrollee has not

7-25     complied with Subsection (a), an action under this section shall

 8-1     not be dismissed by the court, but the court may, in its

 8-2     discretion, order the parties to submit to an independent review or

 8-3     mediation or other nonbinding alternative dispute resolution and

 8-4     may abate the action for a period of not to exceed 30 days for such

 8-5     purposes.  Such orders of the court shall be the sole remedy

 8-6     available to a party complaining of an enrollee's failure to comply

 8-7     with Subsection (a).

 8-8           (e)  The enrollee is not required to comply with Subsection

 8-9     (c) and no abatement or other order pursuant to Subsection (d) for

8-10     failure to comply shall be imposed if the enrollee has filed a

8-11     pleading alleging in substance that:

8-12                 (1)  harm to the enrollee has already occurred because

8-13     of the conduct of the health insurance carrier, health maintenance

8-14     organization, or managed care entity or because of an act or

8-15     omission of an employee, agent, ostensible agent, or representative

8-16     of such carrier, organization, or entity for whose conduct it is

8-17     liable under Section 88.002(b); and

8-18                 (2)  the review would not be beneficial to the

8-19     enrollee, unless the court, upon motion by a defendant carrier,

8-20     organization, or entity finds after hearing that such pleading was

8-21     not made in good faith, in which case the court may enter an order

8-22     pursuant to Subsection (d).

8-23           (f)  If the insured or enrollee or the insured's or

8-24     enrollee's representative seeks to exhaust the appeals and review

8-25     or provides notice, as required by Subsection (a), before the

 9-1     statute of limitations applicable to a claim against a managed care

 9-2     entity has expired, the limitations period is tolled until the

 9-3     later of:

 9-4                 (1)  the 30th day after the date the insured or

 9-5     enrollee or the insured's or enrollee's representative has

 9-6     exhausted the process for appeals and review applicable under the

 9-7     utilization review requirements; or

 9-8                 (2)  the 40th day after the date the insured or

 9-9     enrollee or the insured's or enrollee's representative gives notice

9-10     under Subsection (a)(2)(A).

9-11           (g)  This section does not prohibit an insured or enrollee

9-12     from pursuing other appropriate remedies, including injunctive

9-13     relief, a declaratory judgment, or relief available under law, if

9-14     the requirement of exhausting the process for appeal and review

9-15     places the insured's or enrollee's health in serious jeopardy.

9-16           SECTION 2.  Section 6, Article 21.58A, Insurance Code, is

9-17     amended by amending Subsection (b) and adding Subsection (c) to

9-18     read as follows:

9-19           (b)  The procedures for appeals shall be reasonable and shall

9-20     include the following:

9-21                 (1)  a provision that an enrollee, a person acting on

9-22     behalf of the enrollee, or the enrollee's physician or health care

9-23     provider may appeal the adverse determination and shall be

9-24     provided, on request, a clear and concise statement of the clinical

9-25     basis for the adverse determination;

 10-1                (2)  a list of documents needed to be submitted by the

 10-2    appealing party to the utilization review agent for the appeal;

 10-3                (3)  a provision that appeal decisions shall be made by

 10-4    a physician, provided that, if the appeal is denied and within 10

 10-5    working days the health care provider sets forth in writing good

 10-6    cause for having a particular type of a specialty provider review

 10-7    the case, the denial shall be reviewed by a health care provider in

 10-8    the same or similar specialty as typically manages the medical

 10-9    condition, procedure, or treatment under discussion for review of

10-10    the adverse determination;

10-11                (4)  in addition to the written appeal, a method for an

10-12    expedited appeal procedure for emergency care denials and denials

10-13    of continued stays for hospitalized patients, which shall include a

10-14    health care provider who has not previously reviewed the case; such

10-15    appeal must be completed no later than one working day following

10-16    the day on which the appeal, including all information necessary to

10-17    complete the appeal, is made to the utilization review agent; and

10-18                (5)  written notification to the appealing party of the

10-19    determination of the appeal, as soon as practical, but in no case

10-20    later than the 30th day after the date the utilization agent

10-21    receives [30 days after receiving all the required documentation

10-22    of] the appeal.  If the appeal is denied, the written notification

10-23    shall include a clear and concise statement of:

10-24                      (A)  the clinical basis for the appeal's denial;

10-25                      (B)  [and]  the specialty of the physician making

 11-1    the denial; and

 11-2                      (C)  notice of the appealing party's right to

 11-3    seek review of the denial by an independent review organization

 11-4    under Section 6A of this article and the procedures for obtaining

 11-5    that review.

 11-6          (c)  Notwithstanding any other law, in a circumstance

 11-7    involving an enrollee's life-threatening condition, the enrollee is

 11-8    entitled to an immediate appeal to an independent review

 11-9    organization as provided by Section 6A of this article and is not

11-10    required to comply with procedures for an internal review of the

11-11    utilization review agent's adverse determination.  For purposes of

11-12    this section, "life-threatening condition" means a disease or other

11-13    medical condition with respect to which death is probable unless

11-14    the course of the disease or condition is interrupted.

11-15          SECTION 3.  Article 21.58A, Insurance Code, is amended by

11-16    adding Section 6A to read as follows:

11-17          Sec. 6A.  INDEPENDENT REVIEW OF ADVERSE DETERMINATIONS.  A

11-18    utilization review agent shall:

11-19                (1)  permit any party whose appeal of an adverse

11-20    determination is denied by the utilization review agent to seek

11-21    review of that determination by an independent review organization

11-22    assigned to the appeal in accordance with Article 21.58C of this

11-23    code;

11-24                (2)  provide to the appropriate independent review

11-25    organization not later than the third business day after the date

 12-1    that the utilization review agent receives a request for review a

 12-2    copy of:

 12-3                      (A)  any medical records of the enrollee that are

 12-4    relevant to the review;

 12-5                      (B)  any documents used by the plan in making the

 12-6    determination to be reviewed by the organization;

 12-7                      (C)  the written notification described by

 12-8    Section 6(b)(5) of this article;

 12-9                      (D)  any documentation and written information

12-10    submitted to the utilization review agent in support of the appeal;

12-11    and

12-12                      (E)  a list of each physician or health care

12-13    provider who has provided care to the enrollee and who may have

12-14    medical records relevant to the appeal;

12-15                (3)  comply with the independent review organization's

12-16    determination with respect to the medical necessity or

12-17    appropriateness of health  care items and services for an enrollee;

12-18    and

12-19                (4)  pay for the independent review.

12-20          SECTION 4.  Section 8, Article 21.58A, Insurance Code, is

12-21    amended by adding Subsection (f) to read as follows:

12-22          (f)  Confidential information in the custody of a utilization

12-23    review agent may be provided to an independent review organization,

12-24    subject to rules and standards adopted by the commissioner under

12-25    Article 21.58C of this code.

 13-1          SECTION 5.  Subdivision (3), Subsection (a), Section 9, Texas

 13-2    Health Maintenance Organization Act (Article 20A.09, Vernon's Texas

 13-3    Insurance Code), is amended to read as follows:

 13-4                (3)  An evidence of coverage shall contain:

 13-5                      (A)  no provisions or statements which are

 13-6    unjust, unfair, inequitable, misleading, deceptive, which encourage

 13-7    misrepresentation, or which are untrue, misleading, or deceptive as

 13-8    defined in Section 14 of this Act; and

 13-9                      (B)  a clear and complete statement, if a

13-10    contract, or a reasonably complete facsimile, if a certificate, of:

13-11                            (i)  the medical, health care services, or

13-12    single health care service and the issuance of other benefits, if

13-13    any, to which the enrollee is entitled under the health care plan

13-14    or single health care service plan;

13-15                            (ii)  any limitation on the services, kinds

13-16    of services, benefits, or kinds of benefits to be provided,

13-17    including any deductible or co-payment feature;

13-18                            (iii)  where and in what manner information

13-19    is available as to how services may be obtained; and

13-20                            (iv)  a clear and understandable

13-21    description of the health maintenance organization's methods for

13-22    resolving enrollee complaints, including the enrollee's right to

13-23    appeal denials of an adverse determination, as that term is defined

13-24    by Section 12A of this Act, to an independent review organization

13-25    and the procedures for making an appeal to an independent review

 14-1    organization.  Any subsequent changes may be evidenced in a

 14-2    separate document issued to the enrollee.

 14-3          SECTION 6.  Section 12, Texas Health Maintenance Organization

 14-4    Act (Article 20A.12, Vernon's Texas Insurance Code), is amended to

 14-5    read as follows:

 14-6          Sec. 12.  COMPLAINT SYSTEM.  (a)  Every health maintenance

 14-7    organization shall establish and maintain a complaint system to

 14-8    provide reasonable procedures for the resolution of oral and

 14-9    written complaints initiated by enrollees concerning health care

14-10    services.

14-11           (b)  The commissioner [or board] may examine the [such]

14-12    complaint system.

14-13          SECTION 7.  The Texas Health Maintenance Organization Act

14-14    (Chapter 20A, Vernon's Texas Insurance Code) is amended by adding

14-15    Section 12A to read as follows:

14-16          Sec. 12A.  REVIEW OF ADVERSE DETERMINATIONS.  (a)  The

14-17    complaint system required by Section 12 of this Act must include:

14-18                (1)  notification to the enrollee of the enrollee's

14-19    right to appeal an adverse determination to an independent review

14-20    organization;

14-21                (2)  notification to the enrollee of the procedures for

14-22    appealing an adverse determination to an independent review

14-23    organization; and

14-24                (3)  notification to an enrollee who has a

14-25    life-threatening condition of the enrollee's right to immediate

 15-1    review by an independent review organization and the procedures to

 15-2    obtain that review.

 15-3          (b)  The provisions of Article 21.58A, Insurance Code, that

 15-4    relate to independent review apply to a health maintenance

 15-5    organization under this section as if the health maintenance

 15-6    organization were a utilization review agent.

 15-7          (c)  In this section:

 15-8                (1)  "Adverse determination" means determination by a

 15-9    health maintenance organization that the health care services

15-10    furnished or proposed to be furnished to an enrollee are not

15-11    medically necessary.

15-12                (2)  "Independent review organization" means an

15-13    organization selected as provided under Article 21.58C, Insurance

15-14    Code.

15-15                (3)  "Life-threatening condition" has the meaning

15-16    assigned by Section 6, Article 21.58A, Insurance Code.

15-17          SECTION 8.  Subchapter E, Chapter 21, Insurance Code, is

15-18    amended by adding Article 21.58C to read as follows:

15-19          Art. 21.58C.  STANDARDS FOR INDEPENDENT REVIEW ORGANIZATIONS

15-20          Sec. 1.  DEFINITIONS.  In this article:

15-21                (1)  "Life-threatening condition" has the meaning

15-22    assigned by Section 6, Article 21.58A of this code.

15-23                (2)  "Payor" has the meaning assigned by Section 2,

15-24    Article 21.58A of this code.

15-25          Sec. 2.  CERTIFICATION AND DESIGNATION OF INDEPENDENT REVIEW

 16-1    ORGANIZATIONS.  (a)  The commissioner shall:

 16-2                (1)  promulgate standards and rules for:

 16-3                      (A)  the certification, selection, and operation

 16-4    of independent review organizations to perform independent review

 16-5    described by Section 6, Article 21.58A of this code; and

 16-6                      (B)  the suspension and revocation of the

 16-7    certification;

 16-8                (2)  designate annually each organization that meets

 16-9    the standards as an independent review organization;

16-10                (3)  charge payors fees in accordance with this article

16-11    as necessary to fund the operations of independent review

16-12    organizations; and

16-13                (4)  provide ongoing oversight of the independent

16-14    review organizations to ensure continued compliance with this

16-15    article and the standards and rules adopted under this article.

16-16          (b)  The standards required by Subsection (a)(1) of this

16-17    section must ensure:

16-18                (1)  the timely response of an independent review

16-19    organization selected under this article;

16-20                (2)  the confidentiality of medical records transmitted

16-21    to an independent review organization for use in independent

16-22    reviews;

16-23                (3)  the qualifications and independence of each health

16-24    care provider or physician making review determinations for an

16-25    independent review organization;

 17-1                (4)  the fairness of the procedures used by an

 17-2    independent review organization in making the determinations; and

 17-3                (5)  timely notice to enrollees of the results of the

 17-4    independent review, including the clinical basis for the

 17-5    determination.

 17-6          (c)  The standards adopted under Subsection (a)(1) of this

 17-7    section must include standards that require each independent review

 17-8    organization to make its determination:

 17-9                (1)  not later than the earlier of:

17-10                      (A)  the 15th day after the date the independent

17-11    review organization receives the information necessary to make the

17-12    determination; or

17-13                      (B)  the 20th day after the date the independent

17-14    review organization receives the request that the determination be

17-15    made; and

17-16                (2)  in the case of a life-threatening condition, not

17-17    later than the earlier of:

17-18                      (A)  the fifth day after the date the independent

17-19    review organization receives the information necessary to make the

17-20    determination; or

17-21                      (B)  the eighth day after the date the

17-22    independent review organization receives the request that the

17-23    determination be made.

17-24          (d)  To be certified as an independent review organization

17-25    under this article, an organization must submit to the commissioner

 18-1    an application in the form required by the commissioner.  The

 18-2    application must include:

 18-3                (1)  for an applicant that is publicly held, the name

 18-4    of each stockholder or owner of more than five percent of any stock

 18-5    or options;

 18-6                (2)  the name of any holder of bonds or notes of the

 18-7    applicant that exceed $100,000;

 18-8                (3)  the name and type of business of each corporation

 18-9    or other organization that the applicant controls or is affiliated

18-10    with and the nature and extent of the affiliation or control;

18-11                (4)  the name and a biographical sketch of each

18-12    director, officer, and executive of the applicant and any entity

18-13    listed under Subdivision (3) of this subsection and a description

18-14    of any relationship the named individual has with:

18-15                      (A)  a health benefit plan;

18-16                      (B)  a health maintenance organization;

18-17                      (C)  an insurer;

18-18                      (D)  a utilization review agent;

18-19                      (E)  a nonprofit health corporation;

18-20                      (F)  a payor;

18-21                      (G)  a health care provider; or

18-22                      (H)  a group representing any of the entities

18-23    described by Paragraphs (A) through (G) of this subdivision;

18-24                (5)  the percentage of the applicant's revenues that

18-25    are anticipated to be derived from reviews conducted under Section

 19-1    6A, Article 21.58A of this code;

 19-2                (6)  a description of the areas of expertise of the

 19-3    health care professionals making review determinations for the

 19-4    applicant; and

 19-5                (7)  the procedures to be used by the independent

 19-6    review organization in making review determinations with respect to

 19-7    reviews conducted under Section 6A, Article 21.58A of this code.

 19-8          (e)  The independent review organization shall annually

 19-9    submit the information required by Subsection (d) of this section.

19-10    If at any time there is a material change in the information

19-11    included in the application under Subsection (d) of this section,

19-12    the independent review organization shall submit updated

19-13    information to the commissioner.

19-14          (f)  An independent review organization may not be a

19-15    subsidiary of, or in any way owned or controlled by, a payor or a

19-16    trade or professional association of payors.

19-17          (g)  An independent review organization conducting a review

19-18    under Section 6A, Article 21.58A of this code is not liable for

19-19    damages arising from the determination made by the organization.

19-20    This subsection does not apply to an act or omission of the

19-21    independent review organization that is made in bad faith or that

19-22    involves gross negligence.

19-23          SECTION 9.  Chapter 88, Civil Practice and Remedies Code, as

19-24    added by this Act, applies only to a cause of action that accrues

19-25    on or after the effective date of this Act.  An action that accrues

 20-1    before the effective date of this Act is governed by the law

 20-2    applicable to the action immediately before the effective date of

 20-3    this Act, and that law is continued in effect for that purpose.

 20-4          SECTION 10.  (a)  The change in law made by Sections 2

 20-5    through 4 and 6 through 8 of this Act applies only to an adverse

 20-6    determination of a utilization review agent or health maintenance

 20-7    organization made on or after the effective date of this Act.

 20-8          (b)  The change in law made by Section 5 of this Act to

 20-9    Section 9, Texas Health Maintenance Organization Act (Article

20-10    20A.09, Vernon's Texas Insurance Code), applies only to an evidence

20-11    of coverage that is delivered, issued for delivery, or renewed on

20-12    or after January 1, 1998.  An evidence of coverage that is

20-13    delivered, issued for delivery, or renewed before January 1, 1998,

20-14    is governed by the law as it existed immediately before the

20-15    effective date of this Act, and that law is continued in effect for

20-16    that purpose.

20-17          SECTION 11.  This Act takes effect September 1, 1997.

20-18          SECTION 12.  The importance of this legislation and the

20-19    crowded condition of the calendars in both houses create an

20-20    emergency and an imperative public necessity that the

20-21    constitutional rule requiring bills to be read on three several

20-22    days in each house be suspended, and this rule is hereby suspended.

                                                                S.B. No. 386

         _______________________________     _______________________________

             President of the Senate              Speaker of the House

               I hereby certify that S.B. No. 386 passed the Senate on

         March 17, 1997, by a viva-voce vote; and that the Senate concurred

         in House amendments on May 12, 1997, by the following vote:

         Yeas 25, Nays 5.

                                             _______________________________

                                                 Secretary of the Senate

               I hereby certify that S.B. No. 386 passed the House, with

         amendments, on May 8, 1997, by a non-record vote.

                                             _______________________________

                                                 Chief Clerk of the House

         Approved:

         _______________________________

                     Date

         _______________________________

                   Governor