AN ACT 1-1 relating to certain unfair practices by insurers and certain 1-2 related entities regarding preferred providers of health care. 1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-4 SECTION 1. Article 3.70-3C, Insurance Code, as added by 1-5 Chapter 1024, Acts of the 75th Legislature, Regular Session, 1997, 1-6 is amended by adding Section 7A to read as follows: 1-7 Sec. 7A. RESTRICTIONS ON PAYMENT AND REIMBURSEMENT. (a) An 1-8 insurer or third party administrator may not reimburse a physician, 1-9 practitioner, hospital, institutional provider, or organization of 1-10 physicians and health care providers on a discounted fee basis for 1-11 covered services that are provided to an insured unless: 1-12 (1) the insurer or third party administrator has 1-13 contracted with either: 1-14 (A) the physician, practitioner, hospital, 1-15 institutional provider, organization of physicians and health care 1-16 providers; or 1-17 (B) a preferred provider organization that has a 1-18 network of preferred providers and such organization has contracted 1-19 with the health care preferred provider; 1-20 (2) the physician, practitioner, hospital, 1-21 institutional provider, or organization of physicians and health 1-22 care providers has agreed to the contract and has agreed to provide 1-23 health care services under the terms of the contract; and 1-24 (3) the insurer or third party administrator has 2-1 agreed to provide coverage for those health care services under the 2-2 health insurance policy. 2-3 (b) A party to a preferred provider contract, including a 2-4 contract with a preferred provider organization, may not sell, 2-5 lease, or otherwise transfer information regarding the payment or 2-6 reimbursement terms of the contract without the express authority 2-7 and prior adequate notification of the other contracting parties. 2-8 This subsection does not affect the authority of the commissioner 2-9 or the Texas Workers' Compensation Commission under this code to 2-10 request and obtain information. 2-11 (c) An insurer or third party administrator who violates 2-12 this section commits an unfair claim settlement practice in 2-13 violation of Article 21.21-2 of this code and is also subject to 2-14 administrative penalties under Articles 1.10 and 1.10E of this 2-15 code. _______________________________ _______________________________ President of the Senate Speaker of the House I hereby certify that S.B. No. 130 passed the Senate on March 23, 1999, by the following vote: Yeas 30, Nays 0; and that the Senate concurred in House amendments on May 11, 1999, by the following vote: Yeas 30, Nays 0. _______________________________ Secretary of the Senate I hereby certify that S.B. No. 130 passed the House, with amendments, on May 6, 1999, by a non-record vote. _______________________________ Chief Clerk of the House Approved: _______________________________ Date _______________________________ Governor