By Nelson S.B. No. 130 Substitute the following for S.B. No. 130: By Eiland C.S.S.B. No. 130 A BILL TO BE ENTITLED 1-1 AN ACT 1-2 relating to certain unfair practices by insurers and certain 1-3 related entities regarding preferred providers of health care. 1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-5 SECTION 1. Article 3.70-3C, Insurance Code, as added by 1-6 Chapter 1024, Acts of the 75th Legislature, Regular Session, 1997, 1-7 is amended by adding Section 7A to read as follows: 1-8 Sec. 7A. RESTRICTIONS ON PAYMENT AND REIMBURSEMENT. (a) An 1-9 insurer or third party administrator may not reimburse a physician, 1-10 practitioner, hospital, institutional provider, or organization of 1-11 physicians and health care providers on a discounted fee basis for 1-12 covered services that are provided to an insured unless: 1-13 (1) the insurer or third party administrator has 1-14 contracted with either: 1-15 A. the physician, practitioner, hospital, 1-16 institutional provider, organization of physicians and health care 1-17 providers; or 1-18 B. a preferred provider organization that has a 1-19 network of preferred providers and such organization has contracted 1-20 with the health care preferred provider; 1-21 (2) the physician, practitioner, hospital, 1-22 institutional provider, or organization of physicians and health 1-23 care providers has agreed to the contract and has agreed to provide 1-24 health care services under the terms of the contract; and 2-1 (3) the insurer or third party administrator has 2-2 agreed to provide coverage for those health care services under the 2-3 health insurance policy. 2-4 (b) A party to a preferred provider contract including, a 2-5 contract with a preferred provider organization, may not sell, 2-6 lease, or otherwise transfer information regarding the payment or 2-7 reimbursement terms of the contract without the express authority 2-8 and prior adequate notification of the other contracting parties. 2-9 This subsection does not affect the commissioner's authority under 2-10 this code to 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.