HBA-ATS H.B. 3179 76(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 3179 By: Lewis, Glenn Insurance 4/6/1999 Introduced BACKGROUND AND PURPOSE Texas case law has explicitly stated that the purpose of Section 4(4) (Boycott, Coercion, and Intimidation), Article 21.21, Insurance Code, is to prevent monopoly or unreasonable restraint in the business of supplying insurance. Nevertheless, some health maintenance organizations (HMOs) and other managed care organizations may be violating the law by dictating that health care providers with whom they contract must participate in all of the insurers' products as a condition of participating in a desired product. Failure to participate in all of the products may lead to termination of the contract. This practice is known as a "tying arrangement" in the parlance of antitrust language. Some states have declared this type of tying arrangement to be an unfair trade practice. H.B. 3179 redefines "coercion" under Article 21.21, Insurance Code, to include an action or agreement by any entity subject to the Insurance Code that offers multiple health plans or products and requires a health care provider, as a condition of participation in a health plan or product of the entity, to participate in any of the entity's other health plans or products. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that this bill does not expressly delegate any additional rulemaking authority to a state officer, department, agency, or institution. SECTION BY SECTION ANALYSIS SECTION 1. Amends Section 4(4), Article 21.21, Insurance Code, to add the provision that coercion includes an action or agreement by any entity subject to this code that offers multiple health plans or products and requires a health care provider, as a condition of participation in a health plan or product of the entity, to participate in any of the entity's other health plans or products. SECTION 2. Effective date: September 1, 1999. SECTION 3. Emergency clause.