SRC-MWN H.B. 1913 77(R)   BILL ANALYSIS


Senate Research Center   H.B. 1913
77R11497 DLF-FBy: Capelo (Shapleigh)
Business & Commerce
5/11/2001
Engrossed


DIGEST AND PURPOSE 

Current law requires a preferred provider organization (PPO) or health
maintenance organization (HMO) to provide due process to a provider through
the use of an advisory panel of physicians selected by the PPO or HMO
before the provider is deselected from the PPO's or HMO's health plan.
Since the panel's decision is of an advisory nature only, a provider who
brings a case before the panel may still be deselected from the health plan
without good cause. Providers may seek legal redress if they feel their
deselection from a plan is unwarranted, but may not be able to pursue the
action due to time constraints, cost concerns, and the improbability of
prevailing in the suit. H.B. 1913 strengthens the peer review process by
requiring the process to meet certain federal guidelines regarding good
faith professional review activities if a contributing cause of the
termination of a contract is based on utilization review, quality review,
or any action reported to the National Practitioner Data Bank and
authorizing aggrieved parties to bring an action for failure to follow
procedures.  

RULEMAKING AUTHORITY

This bill does not expressly grant any additional rulemaking authority to a
state officer, institution, or agency. 

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Section 3, Article 3.70-3C, Insurance Code, as added by
Chapter 1024, Acts of the 75th Legislature, Regular Session, 1997, by
amending Subsection (g) and adding Subsections (o) and (p), as follows: 
 
(g)  Requires the insurer, before terminating a contract with a preferred
provider, to provide written reasons for the termination.  Requires the
insurer, on request and, except as provided by this subsection, prior to
termination of a physician or practitioner, but within a period not to
exceed 60 days, to provide, rather than request, a reasonable review
mechanism that incorporates, in an advisory role, a review panel selected
in the manner described in Subsection (b)(3) of this section.  Requires the
review, if a contributing cause of the termination is based on utilization
review,  quality review,  or any action reported to the National
Practitioner Data Bank, to be a peer review process that meets the
requirements of 42 U.S.C. Section 11101 et seq., as amended, and to be
conducted before the preferred provider organization files any complaint,
as provided under state law or 42 U.S.C. Section 11101 et seq., as amended,
with the Texas State Board of Medical Examiners. Requires the peer review
process, in cases in which there is imminent harm to a patient's health or
an action by a state medical or other physician licensing board or other
government agency that effectively impairs a physician's or practitioner's
ability to practice medicine or in cases of fraud or malfeasance, to be
initiated simultaneously with the termination or suspension. Requires an
insurer determination contrary to any recommendation of the panel to be for
good cause shown, and a written explanation of the insurer's determination
to also be provided to the affected physician or practitioner. 

(o)  Authorizes a preferred provider who is injured by an insurer's failure
to follow the procedures required under Subsection (g) of this section to
bring an action against the  insurer to recover certain costs. 

(p)  Authorizes a preferred provider to bring an action under Subsection
(o) of this  
  section on the person's own behalf and on behalf of others similarly
situated. 

SECTION 2. Amends Section 18A, Texas Health Maintenance Organization Act
(Article 20A.18A, V.T.C.S.), as added by Chapter 1026, Acts of the 75th
Legislature, Regular Session, 1997, by amending Subsection (b) and adding
Subsections (k) and (l), as follows: 

(b)  Requires a physician or provider, on request and, except as provided
by this subsection, before the effective date of the termination, but
within a period not to exceed 60 days, to be entitled to a review of the
health maintenance organization's proposed termination by an advisory
review panel. Requires the decision of the advisory review panel to be
considered and provides that it is binding on the health maintenance
organization, except for good cause shown. Makes conforming changes. 

 (k)  Makes conforming changes.

 (l)  Authorizes a physician or provider to bring an action under
Subsection (k) of this section on the person's own behalf and on behalf of
others similarly situated. 

SECTION 3. Makes application of this Act prospective.

SECTION 4. Effective date: upon passage or September 1, 2001.