76R12124 T
By Smithee H.B. No. 3039
Substitute the following for H.B. No. 3039:
By Lewis of Tarrant C.S.H.B. No. 3039
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the regulation of physician collective negotiation.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. The Insurance Code is amended by adding a new
1-5 Chapter 29, to read as follows:
1-6 CHAPTER 29. COLLECTIVE NEGOTIATIONS BY PHYSICIANS WITH
1-7 HEALTH BENEFIT PLANS.
1-8 Art. 29.01. FINDING AND PURPOSES. The Legislature finds
1-9 that collective negotiation by competing physicians of certain
1-10 terms and conditions of contracts with health plans will result in
1-11 pro-competitive effects in the absence of any express or implied
1-12 threat of retaliatory collective action, such as a boycott or
1-13 strike, by physicians.
1-14 Art. 29.02. DEFINITIONS. In this chapter:
1-15 (1) "Health benefit plan" means a plan described by
1-16 Article 29.03 of this chapter.
1-17 (2) "Person" means an individual, association,
1-18 corporation, or any other legal entity.
1-19 (3) "Physicians' representative" means a third party
1-20 who is authorized by physicians to negotiate on their behalf with
1-21 health benefit plans over contractual terms and conditions
1-22 affecting those physicians.
1-23 Art. 29.03. SCOPE OF CHAPTER. (a) This chapter applies
1-24 only to a health benefit plan that provides benefits for medical or
2-1 surgical expenses incurred as a result of a health condition,
2-2 accident, or sickness, including an individual, group, blanket, or
2-3 franchise insurance policy or insurance agreement, a group hospital
2-4 service contract, or an individual or group evidence of coverage or
2-5 similar coverage document that is offered by:
2-6 (1) an insurance company;
2-7 (2) a group hospital service corporation operating
2-8 under Chapter 20 of this code;
2-9 (3) a fraternal benefit society operating under
2-10 Chapter 10 of this code;
2-11 (4) a stipulated premium insurance company operating
2-12 under Chapter 22 of this code;
2-13 (5) a reciprocal exchange operating under Chapter 19
2-14 of this code;
2-15 (6) a health maintenance organization operating under
2-16 the Texas Health Maintenance Organization Act (Chapter 20A,
2-17 Vernon's Texas Insurance Code); or
2-18 (7) a multiple employer welfare agreement that holds a
2-19 certificate of authority under Article 3.95-2 of this code.
2-20 (b) This chapter does not apply to:
2-21 (1) a plan that provides coverage:
2-22 (A) only for a specified disease or other
2-23 limited benefit;
2-24 (B) only for accidental death or dismemberment;
2-25 (C) for wages or payments in lieu of wages for a
2-26 period during which an employee is absent from work because of
2-27 sickness or injury;
3-1 (D) as a supplement to liability insurance;
3-2 (E) for credit insurance;
3-3 (F) only for dental or vision care;
3-4 (G) only for hospital expenses; or
3-5 (H) only for indemnity for hospital confinement;
3-6 (2) a small employer health benefit plan written under
3-7 Chapter 26 of this code;
3-8 (3) a Medicare supplemental policy as defined by
3-9 Section 1882(g)(1), Social Security Act (42 U.S.C. Section 1395ss),
3-10 as amended;
3-11 (4) workers' compensation insurance coverage;
3-12 (5) medical payment insurance coverage issued as part
3-13 of a motor vehicle insurance policy; or
3-14 (6) a long-term care policy, including a nursing home
3-15 fixed indemnity policy, unless the Attorney General determines that
3-16 the policy provides benefit coverage so comprehensive that the
3-17 policy is a health benefit plan as described by Subsection (a) of
3-18 this article.
3-19 Art. 29.04. COLLECTIVE NEGOTIATION AUTHORIZED. Competing
3-20 physicians within the service area of a health plan may meet and
3-21 communicate for the purpose of collectively negotiating the
3-22 following terms and conditions of contracts with the health plan:
3-23 (1) clinical practice guidelines and coverage
3-24 criteria;
3-25 (3) dispute resolution procedures relating to disputes
3-26 between health plans and physicians;
3-27 (4) patient referral procedures;
4-1 (6) quality assurance programs;
4-2 (7) health service utilization review procedures.
4-3 Art. 29.05. LIMITATIONS ON COLLECTIVE NEGOTIATION.
4-4 Competing physicians shall not meet and communicate for the
4-5 purposes of collectively negotiating the following terms and
4-6 conditions of contracts with health plans:
4-7 (1) the fees or prices for services, including those
4-8 arrived at by applying any reimbursement methodology procedures;
4-9 (2) the conversion factors in a resource-based
4-10 relative value scale reimbursement methodology or similar
4-11 methodologies;
4-12 (3) the amount of any discount on the price of
4-13 services to be rendered by physicians;
4-14 (4) the dollar amount of capitation or fixed payment
4-15 for health services rendered by physicians to health plan
4-16 enrollees.
4-17 Art. 29.07. COLLECTIVE NEGOTIATION REQUIREMENTS. Competing
4-18 health care physicians' exercise of collective negotiation rights
4-19 granted by Articles 29.04 of this chapter shall conform to the
4-20 following criteria:
4-21 (1) physicians may communicate with each other with
4-22 respect to the contractual terms and conditions to be negotiated
4-23 with a health plan;
4-24 (2) physicians may communicate with the third party
4-25 who is authorized to negotiate on their behalf with health plans
4-26 over these contractual terms and conditions;
4-27 (3) the third party is the sole party authorized to
5-1 negotiate with health plans on behalf of the physicians as a group;
5-2 (4) physicians can be bound by the terms and
5-3 conditions negotiated by the third party authorized to represent
5-4 their interests;
5-5 (5) health plans communicating or negotiating with the
5-6 physicians' representative shall remain free to contract with or
5-7 offer different contract terms and conditions to individual
5-8 competing physicians;
5-9 (6) the physicians' representative shall comply with
5-10 the provision of Art. 29.08 of this chapter.
5-11 Art. 29.08. REQUIREMENTS FOR PHYSICIANS' REPRESENTATIVE.
5-12 Any person or organization proposing to act or acting as a
5-13 representative of physicians for the purpose of exercising
5-14 authority granted under this chapter shall comply with the
5-15 following requirements: (a) before engaging in any collective
5-16 negotiations with health plans on behalf of physicians, the
5-17 representative shall furnish for the Attorney General's approval, a
5-18 report identifying:
5-19 (1) the representative's name and business address;
5-20 (2) the names and addresses of the physicians who will
5-21 be represented by the identified representative;
5-22 (3) the relationship of the physicians requesting
5-23 collective representation to the total population of physicians in
5-24 a geographic service area;
5-25 (4) the health plan(s) with which the representative
5-26 intends to negotiate on behalf of the identified physicians;
5-27 (5) the proposed subject matter of the negotiations or
6-1 discussions with the identified health plan(s);
6-2 (6) the representative's plan of operation and
6-3 procedures to ensure compliance with this section;
6-4 (7) the expected impact of the negotiations on the
6-5 quality of patient care; and
6-6 (8) the benefits of a contract between the identified
6-7 health plan and physicians.
6-8 (b) after the parties identified in the initial filing have
6-9 reached an agreement, the representative shall furnish for the
6-10 Attorney General's approval, a copy of the proposed contract and
6-11 plan of action.
6-12 (c) within 14 days of a health plan decision declining
6-13 negotiation, terminating negotiation, or failing to respond to a
6-14 request for negotiation the representative shall report to the
6-15 Attorney General the end of negotiations. If negotiations resume
6-16 within 60 days of such notification to the Attorney General, the
6-17 applicant shall be permitted to renew the previously filed report
6-18 without submitting a new report for approval.
6-19 Art. 29.09. APPROVAL PROCESS BY ATTORNEY GENERAL. (a) The
6-20 Attorney General shall either approve or disapprove an initial
6-21 filing, supplemental filing and a proposed contract within 30 days
6-22 of each filing. If disapproved, the Attorney General shall furnish
6-23 a written explanation of any deficiencies along with a statement of
6-24 specific remedial measures as to how such deficiencies could be
6-25 corrected. A representative who fails to obtain the Attorney's
6-26 General's approval is deemed to act outside the authority granted
6-27 under this section.
7-1 (b) The Attorney General shall approve a request to enter
7-2 into collective negotiations or a proposed contract if he
7-3 determines that the applicants have demonstrated that the likely
7-4 benefits resulting from the collective negotiation or proposed
7-5 contract outweigh the disadvantages attributable to a reduction in
7-6 competition that may result from the collective negotiation or
7-7 proposed contract.
7-8 (c) An approval of the initial filing by the Attorney
7-9 General shall be effective for all subsequent negotiations between
7-10 the parties specified in the initial filing.
7-11 (d) If the Attorney General does not issue a written
7-12 approval or rejection of an initial filing, supplemental filing, or
7-13 proposed contract within the specified time period, the applicant
7-14 shall have the right to petition a district court for a mandamus
7-15 order requiring the Attorney General to approve or disapprove the
7-16 contents of the filing forthwith. The petition shall be filed in a
7-17 district court in Travis County.
7-18 Art. 29.10. CERTAIN COLLECTIVE ACTION PROHIBITED. Nothing
7-19 contained in this chapter shall be construed to enable physicians
7-20 to collectively coordinate any cessation of health care services.
7-21 The representative of the physicians shall advise physicians of the
7-22 provisions of this section and shall warn physicians of the
7-23 potential for legal action against physicians who violate state or
7-24 federal antitrust laws when acting outside the authority of this
7-25 chapter.
7-26 Art. 29.11. RULEMAKING AUTHORITY. The Attorney General and
7-27 Commissioner of Insurance shall have the authority to promulgate
8-1 rules necessary to implement the provisions of this chapter.
8-2 Art. 29.12. CONSTRUCTION. This chapter shall not be
8-3 construed to prohibit physicians from negotiating the terms and
8-4 conditions of contracts as permitted by other state or federal law.
8-5 Art. 29.13. FEES. Each person who acts as the
8-6 representative of negotiating parties under this chapter shall pay
8-7 to the department a fee to act as a representative. The Attorney
8-8 General, by rule, shall set fees in amounts reasonable and
8-9 necessary to cover the costs incurred by the state in administering
8-10 this chapter. A fee collected under this article shall be
8-11 deposited in the state treasury to the credit of the operating fund
8-12 from which the expense was incurred.
8-13 SECTION 2. This Act becomes effective September 1, 1999.
8-14 SECTION 3. The importance of this legislation and the
8-15 crowded condition of the calendars in both houses create an
8-16 emergency and an imperative public necessity that the
8-17 constitutional rule requiring bills to be read on three several
8-18 days in each house be suspended, and this rule is hereby suspended.