HBA-NIK S.B. 130 76(R)BILL ANALYSIS Office of House Bill AnalysisS.B. 130 By: Nelson Insurance 4/11/1999 Engrossed BACKGROUND AND PURPOSE Currently, health care providers may contract with health insurance plans to give a discounted rate on their services in exchange for being listed as a preferred provider. An insurer or independent agent may deliberately mislead providers and doctors by claiming to belong to an exclusive preferred provider arrangement in order to receive a discount. S.B. 130 holds insurers in violation of an unfair act or deceptive practice under the Insurance Code if the insurers knowingly mislead a provider into giving them discounts to which the insurers are not entitled. 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 Article 3.70-3C, Insurance Code, as added by Chapter 1024, Acts of the 75th Legislature, Regular Session, 1997, by adding Section 7A, as follows: Sec. 7A. RESTRICTIONS ON PAYMENT AND REIMBURSEMENT. (a) Prohibits an insurer or third party administrator, except as provided by Subsection (b), from reimbursing a physician, practitioner, hospital, institutional provider, or organization of physicians and health care providers on a discounted fee basis for covered services that are provided to an insured unless certain enumerated provisions are followed relating to contracts between the insured or third party administrator and a specified health care provider. (b) Prohibits a party to a preferred provider contract from selling, leasing, or otherwise transferring information regarding the payment or reimbursement terms of the contract without the express authority and prior adequate notification of the other contracting parties. Provides that this subsection does not affect the authority of the commissioner of insurance under this code to request and obtain information. (c) Provides that an insurer or third party administrator who violates this section commits an unfair act or deceptive practice in violation of Articles 21.21 Unfair Competition and Unfair Practices and 21.21-2 (Unfair Claim Settlement Practices) of this code. SECTION 2. Emergency clause. Effective date: upon passage.