By: Harris S.B. No. 1468
Line and page numbers may not match official copy.
Bill not drafted by TLC or Senate E&E.
A BILL TO BE ENTITLED
AN ACT
1-1 relating to requirements for collective negotiations by physicians
1-2 with certain health benefit plans.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. The Insurance Code is amended by adding Chapter
1-5 29 to read as follows:
1-6 CHAPTER 29. COLLECTIVE NEGOTIATIONS BY PHYSICIANS
1-7 WITH HEALTH BENEFIT PLANS
1-8 Art. 29.01. DEFINITIONS. (a) In this chapter:
1-9 (1) "Health benefit plan" means a plan described by
1-10 Article 29.02 of this chapter.
1-11 (2) "Person" means an individual, association,
1-12 corporation, or any other legal entity.
1-13 (3) "Physicians' representative" means a third party
1-14 who is authorized by physicians to negotiate on their behalf with
1-15 health benefit plans over contractual terms and conditions
1-16 affecting those physicians.
1-17 (b) For purposes of this chapter, "substantial market power"
1-18 exists if a health benefit plan's market share within the plan's
1-19 service area exceeds 15 percent of:
1-20 (1) the total market, as measured by:
1-21 (A) the number of persons covered under the
1-22 plan, as determined by the commissioner; or
2-1 (B) the actual number of consumers of prepaid
2-2 comprehensive health services; or
2-3 (2) a particular segment of the market, including:
2-4 (A) Medicare coverage;
2-5 (B) Medicaid coverage;
2-6 (C) commercial coverage; or
2-7 (D) managed care coverage, including coverage
2-8 through health maintenance organizations.
2-9 Art. 29.02. SCOPE OF CHAPTER. (a) This chapter applies
2-10 only to a health benefit plan that provides benefits for medical or
2-11 surgical expenses incurred as a result of a health condition,
2-12 accident, or sickness, including an individual, group, blanket, or
2-13 franchise insurance policy or insurance agreement, a group hospital
2-14 service contract, or an individual or group evidence of coverage or
2-15 similar coverage document that is offered by:
2-16 (1) an insurance company;
2-17 (2) a group hospital service corporation operating
2-18 under Chapter 20 of this code;
2-19 (3) a fraternal benefit society operating under
2-20 Chapter 10 of this code;
2-21 (4) a stipulated premium insurance company operating
2-22 under Chapter 22 of this code;
2-23 (5) a reciprocal exchange operating under Chapter 19
2-24 of this code;
2-25 (6) a health maintenance organization operating under
2-26 the Texas Health Maintenance Organization Act (Chapter 20A,
3-1 Vernon's Texas Insurance Code); or
3-2 (7) a multiple employer welfare arrangement that holds
3-3 a certificate of authority under Article 3.95-2 of this code.
3-4 (b) This chapter does not apply to:
3-5 (1) a plan that provides coverage:
3-6 (A) only for a specified disease or other
3-7 limited benefit;
3-8 (B) only for accidental death or dismemberment;
3-9 (C) for wages or payments in lieu of wages for a
3-10 period during which an employee is absent from work because of
3-11 sickness or injury;
3-12 (D) as a supplement to liability insurance;
3-13 (E) for credit insurance;
3-14 (F) only for dental or vision care;
3-15 (G) only for hospital expenses; or
3-16 (H) only for indemnity for hospital confinement;
3-17 (2) a small employer health benefit plan written under
3-18 Chapter 26 of this code;
3-19 (3) a Medicare supplemental policy as defined by
3-20 Section 1882(g)(1), Social Security Act (42 U.S.C. Section 1395ss),
3-21 as amended;
3-22 (4) workers' compensation insurance coverage;
3-23 (5) medical payment insurance coverage issued as part
3-24 of a motor vehicle insurance policy; or
3-25 (6) a long-term care policy, including a nursing home
3-26 fixed indemnity policy, unless the commissioner determines that the
4-1 policy provides benefit coverage so comprehensive that the policy
4-2 is a health benefit plan as described by Subsection (a) of this
4-3 article.
4-4 Art. 29.03. COLLECTIVE NEGOTIATION AUTHORIZED.
4-5 (a) Physicians practicing within the service area of a health
4-6 benefit plan may collectively negotiate the terms and conditions
4-7 described by Subsection (b) of this article if the health benefit
4-8 plan has substantial market power.
4-9 (b) The physicians may collectively negotiate the following
4-10 terms and conditions of contracts with the health benefit plan:
4-11 (1) clinical practice guidelines;
4-12 (2) coverage criteria;
4-13 (3) plan administrative procedures, including methods
4-14 and timing of physician payment for services;
4-15 (4) dispute resolution procedures relating to disputes
4-16 between the health benefit plan and physicians;
4-17 (5) patient referral procedures;
4-18 (6) the formulation and application of physician
4-19 reimbursement procedures;
4-20 (7) quality assurance programs;
4-21 (8) utilization review procedures; and
4-22 (9) physician selection and termination criteria used
4-23 by the health benefit plan.
4-24 (c) This chapter may not be construed as authorizing a
4-25 boycott of a health benefit plan by physicians.
4-26 Art. 29.04. LIMITATIONS ON COLLECTIVE NEGOTIATION. (a) If
5-1 the health benefit plan has substantial market power, physicians
5-2 may collectively negotiate the following with a health benefit
5-3 plan:
5-4 (1) the fees or prices assessed by the health benefit
5-5 plan for services, including fees established through the
5-6 application of reimbursement procedures;
5-7 (2) the conversion factors used by the health benefit
5-8 plan in a resource-based relative value scale reimbursement
5-9 methodology or other similar methodology;
5-10 (3) the amount of any discount granted by the health
5-11 benefit plan on the price of health care services to be rendered by
5-12 physicians;
5-13 (4) the dollar amount of capitation or a fixed payment
5-14 for health services rendered by physicians to health benefit plan
5-15 enrollees; or
5-16 (5) the inclusion or alteration of a term or condition
5-17 that is the subject of a state or federal law, rule, or regulation
5-18 prohibiting or requiring the particular term or condition.
5-19 (b) Subsection (a)(5) of this article does not affect the
5-20 right of a physician or group of physicians to collectively
5-21 petition a governmental entity for a change in a law, rule, or
5-22 regulation.
5-23 Art. 29.05. COLLECTIVE NEGOTIATION REQUIREMENTS.
5-24 (a) Collective negotiation rights granted by this chapter must
5-25 conform to the following requirements:
5-26 (1) physicians may communicate with other physicians
6-1 regarding the contractual terms and conditions to be negotiated
6-2 with a health benefit plan;
6-3 (2) physicians may communicate with physicians'
6-4 representatives;
6-5 (3) a physicians' representative is the only person
6-6 authorized to negotiate with health benefit plans on behalf of the
6-7 physicians as a group;
6-8 (4) a physician is subject to the terms and conditions
6-9 negotiated by the physicians' representative; and
6-10 (5) in communicating or negotiating with the
6-11 physicians' representative, a health benefit plan is entitled to
6-12 contract with or offer different contract terms and conditions to
6-13 individual competing physicians.
6-14 (b) A physicians' representative may not represent more than
6-15 30 percent of the physicians, or of a particular physician type or
6-16 specialty, practicing in the service area or proposed service area
6-17 of a health benefit plan that covers less than five percent of the
6-18 actual number of consumers of prepaid comprehensive health services
6-19 in the area, as determined by the department.
6-20 Art. 29.06. REQUIREMENTS FOR PHYSICIANS' REPRESENTATIVE.
6-21 (a) Before engaging in collective negotiations with a health
6-22 benefit plan on behalf of physicians, a person who acts as a
6-23 physicians' representative under this chapter shall file with the
6-24 commissioner, in the manner prescribed by the commissioner,
6-25 information identifying the representative, the representative's
6-26 plan of operation, and the representative's procedures to ensure
7-1 compliance with this article.
7-2 (b) Before engaging in the collective negotiations, the
7-3 physicians' representative shall also submit to the commissioner
7-4 for the commissioner's approval a brief report identifying the
7-5 proposed subject matter of the negotiations or discussions with the
7-6 health benefit plan and the efficiencies or benefits expected to be
7-7 achieved through the negotiations. The commissioner may not
7-8 approve the report if the commissioner determines that the proposed
7-9 negotiations would exceed the authority granted under this chapter.
7-10 (c) The representative shall supplement the information in
7-11 the report as new information becomes available that indicates that
7-12 the subject matter of the negotiations with the health benefit plan
7-13 has changed or will change.
7-14 (d) With the advice of the attorney general, the
7-15 commissioner shall approve or disapprove the activity identified in
7-16 the report not later than the 30th day after the date on which the
7-17 report is filed. If disapproved, the commissioner shall furnish a
7-18 written explanation of any deficiencies, along with a statement of
7-19 specific proposals for remedial measures that would cure the
7-20 deficiencies.
7-21 (e) A person who acts as a physicians' representative
7-22 without the approval of the commissioner under this article acts
7-23 outside the authority granted under this chapter.
7-24 (f) Before reporting the results of negotiations with a
7-25 health benefit plan or providing to the affected physicians an
7-26 evaluation of any offer made by a health benefit plan, the
8-1 physicians' representative shall furnish for approval by the
8-2 commissioner, before dissemination to the physicians, a copy of all
8-3 communications to be made to the physicians related to
8-4 negotiations, discussions, and offers made by the health benefit
8-5 plan.
8-6 (g) A physicians' representative shall report the end of
8-7 negotiations to the commissioner not later than the 14th day after
8-8 the date of a health benefit plan decision declining negotiation,
8-9 canceling negotiations, or failing to respond to a request for
8-10 negotiation.
8-11 Art. 29.07. CERTAIN COLLECTIVE ACTION PROHIBITED. This
8-12 chapter is not intended to authorize competing physicians to act in
8-13 concert in response to a report issued by the physicians'
8-14 representative related to the representative's discussions or
8-15 negotiations with health benefit plans. The physicians'
8-16 representative shall:
8-17 (1) advise the physicians of this article; and
8-18 (2) warn the physicians of the potential for legal
8-19 action against physicians who violate state or federal antitrust
8-20 laws by exceeding the authority granted under this chapter.
8-21 Art. 29.08. FEES. Each person who acts as the
8-22 representative of negotiating parties under this chapter shall pay
8-23 to the department a fee to act as a representative. The
8-24 commissioner, by rule, shall set fees in amounts reasonable and
8-25 necessary to cover the costs incurred by the department in
8-26 administering this chapter. A fee collected under this article
9-1 shall be deposited in the state treasury to the credit of the Texas
9-2 Department of Insurance operating fund.
9-3 SECTION 2. This Act takes effect September 1, 1999.
9-4 SECTION 3. The importance of this legislation and the
9-5 crowded condition of the calendars in both houses create an
9-6 emergency and an imperative public necessity that the
9-7 constitutional rule requiring bills to be read on three several
9-8 days in each house be suspended, and this rule is hereby suspended.