By:  Sibley                                           S.B. No. 1884
                                A BILL TO BE ENTITLED
                                       AN ACT
 1-1     relating to independent review of certain health insurance claims.
 1-2           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-3           SECTION 1.  Section 88.003, Civil Practice and Remedies Code,
 1-4     as added by Chapter 163, Acts of the 75th Legislature, Regular
 1-5     Session, 1997, is amended to read as follows:
 1-6           Sec. 88.003.  Limitations on Cause of Action.  (a)  A person
 1-7     may not maintain a cause of action under this chapter against a
 1-8     health insurance carrier, health maintenance organization, or other
 1-9     managed care entity that is required to comply with or otherwise
1-10     complies with the utilization review requirements of Article
1-11     21.58A, Insurance Code, or the Texas Health Maintenance
1-12     Organization Act (Chapter 20A, Vernon's Texas Insurance Code),
1-13     unless the affected insured or enrollee or the insured's or
1-14     enrollee's representative:
1-15                 (1)  has exhausted the appeals and review applicable
1-16     under the utilization review requirements; or
1-17                 (2)  before instituting the action:
1-18                       (A)  gives written notice of the claim as
1-19     provided by Subsection (b); and
1-20                       (B)  agrees to submit the claim to a review by an
1-21     independent review organization under Article 21.58A, Insurance
1-22     Code, as required by Subsections [Subsection] (c) and (d).
1-23           (b)  The notice required by Subsection (a)(2)(A) must be
1-24     delivered or mailed to the health insurance carrier, health
 2-1     maintenance organization, or managed care entity against whom the
 2-2     action is made not later than the 30th day before the date the
 2-3     claim is filed.
 2-4           (c)  The insured or enrollee or the insured's or enrollee's
 2-5     representative must submit the claim to a review by an independent
 2-6     review organization if the health insurance carrier, health
 2-7     maintenance organization, or managed care entity against whom the
 2-8     claim is made requests the review not later than the 14th day after
 2-9     the date notice under Subsection (a)(2)(A) is received by the
2-10     health insurance carrier, health maintenance organization, or
2-11     managed care entity.  If the health insurance carrier, health
2-12     maintenance organization, or managed care entity does not request
2-13     the review within the period specified by this subsection, the
2-14     insured or enrollee or the insured's or enrollee's representative
2-15     is not required to submit the claim to independent review before
2-16     maintaining the action.
2-17           (d)  A review conducted under Subsection (c) as requested by
2-18     a health insurance carrier, health maintenance organization, or
2-19     managed care entity must be performed in accordance with Article
2-20     21.58C, Insurance Code.  The health insurance carrier, health
2-21     maintenance organization, or managed care entity requesting the
2-22     review must agree to comply with Subdivisions (2), (3), and (4),
2-23     Section 6A, Article 21.58A, Insurance Code.
2-24           (e)  Subject to Subsection (f) [(e)], if the enrollee has not
2-25     complied with Subsection (a), an action under this section shall
2-26     not be dismissed by the court, but the court may, in its
 3-1     discretion, order the parties to submit to an independent review or
 3-2     mediation or other nonbinding alternative dispute resolution and
 3-3     may abate the action for a period of not to exceed 30 days for such
 3-4     purposes.  Such orders of the court shall be the sole remedy
 3-5     available to a party complaining of an enrollee's failure to comply
 3-6     with Subsection (a).
 3-7           (f) [(e)]  The enrollee is not required to comply with
 3-8     Subsection (c) and no abatement or other order pursuant to
 3-9     Subsection (e) [(d)] for failure to comply shall be imposed if the
3-10     enrollee has filed a pleading alleging in substance that:
3-11                 (1)  harm to the enrollee has already occurred because
3-12     of the conduct of the health insurance carrier, health maintenance
3-13     organization, or managed care entity or because of an act or
3-14     omission of an employee, agent, ostensible agent, or representative
3-15     of such carrier, organization, or entity for whose conduct it is
3-16     liable under Section 88.002(b); and
3-17                 (2)  the review would not be beneficial to the
3-18     enrollee, unless the court, upon motion by a defendant carrier,
3-19     organization, or entity finds after hearing that such pleading was
3-20     not made in good faith, in which case the court may enter an order
3-21     pursuant to Subsection (e) [(d)].
3-22           (g) [(f)]  If the insured or enrollee or the insured's or
3-23     enrollee's representative seeks to exhaust the appeals and review
3-24     or provides notice, as required by Subsection (a), before the
3-25     statute of limitations applicable to a claim against a managed care
3-26     entity has expired, the limitations period is tolled until the
 4-1     later of:
 4-2                 (1)  the 30th day after the date the insured or
 4-3     enrollee or the insured's or enrollee's representative has
 4-4     exhausted the process for appeals and review applicable under the
 4-5     utilization review requirements; or
 4-6                 (2)  the 40th day after the date the insured or
 4-7     enrollee or the insured's or enrollee's representative gives notice
 4-8     under Subsection (a)(2)(A).
 4-9           (h) [(g)]  This section does not prohibit an insured or
4-10     enrollee from pursuing other appropriate remedies, including
4-11     injunctive relief, a declaratory judgment, or relief available
4-12     under law, if the requirement of exhausting the process for appeal
4-13     and review places the insured's or enrollee's health in serious
4-14     jeopardy.
4-15           SECTION 2.  This Act takes effect September 1, 1999.
4-16           SECTION 3.  This Act applies only to a cause of action that
4-17     accrues on or after the effective date of this Act.  A cause of
4-18     action that accrues before the effective date of this Act is
4-19     governed by the law as it existed immediately before the effective
4-20     date of this Act and that law is continued in effect for this
4-21     purpose.
4-22           SECTION 4.  The importance of this legislation and the
4-23     crowded condition of the calendars in both houses create an
4-24     emergency and an imperative public necessity that the
4-25     constitutional rule requiring bills to be read on three several
4-26     days in each house be suspended, and this rule is hereby suspended.