SRC-JXG S.B. 130 76(R)BILL ANALYSIS Senate Research CenterS.B. 130 By: Nelson Economic Development 6/28/1999 Enrolled DIGEST 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 to receive a discount. S.B. 130 will hold 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. PURPOSE As enrolled, 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 This bill does not grant any additional rulemaking authority to a state officer, institution, or agency. 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 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 conditions exist. (b) Prohibits a party to a preferred provider contract, including a contract with a preferred provider organization, 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 or the Texas Workers' Compensation Commission under this code to request and obtain information. (c) Provides that an insurer or third party administrator who violates this section commits an unfair claim settlement practice in violation of Article 21.21-2 of this code and is also subject to administrative penalties under Articles 1.10 and 1.10E of this code. Effective date: 90 days after adjournment.