HBA-NRS C.S.H.B. 1913 77(R)BILL ANALYSIS Office of House Bill AnalysisC.S.H.B. 1913 By: Capelo Insurance 4/23/2001 Committee Report (Substituted) BACKGROUND 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. C.S.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 It is the opinion of the Office of House Bill Analysis that this bill does not expressly delegate any additional rulemaking authority to a state officer, department, agency, or institution. ANALYSIS C.S.H.B. 1913 amends the Insurance Code to provide that if a contributing cause of the termination of or provider contract by a preferred provider organization (PPO) or health maintenance organization (HMO). is based on utilization review, quality review, or any action reported to the National Practitioner Data Bank, the review mechanism must be a peer review process that meets federal guidelines for good faith professional review activities and must be conducted before the PPO or HMO files any complaint with the Texas State Board of Medical Examiners. The bill provides that a PPO or HMO determination that is contrary to any recommendation of an advisory review panel must be for good cause shown. In cases in which there is imminent harm to a patient's health or an action by a state licensing board or other government agency that effectively impairs a physician's, practitioner's, or provider's ability to practice medicine, dentistry, or another profession, or in a case of fraud or malfeasance, the bill provides that the peer review process must be initiated simultaneously with the termination or suspension of a contract. The bill authorizes a provider who is injured by an HMO's or PPO's failure to follow the required procedures to bring an action against the PPO or HMO on the person's own behalf and on the behalf of others similarly situated for specified damages, costs, fees, orders, and relief. EFFECTIVE DATE On passage, or if the Act does not receive the necessary vote, the Act takes effect September 1, 2001. COMPARISON OF ORIGINAL TO SUBSTITUTE C.S.H.B. 1913 modifies the original bill by providing that a peer review process must meet federal guidelines only if a contributing cause of the termination of a contract is based on utilization review, quality review, or any other action reported to the National Practitioner Data Bank and specifying that the process must be conducted before a preferred provider organization or health maintenance organization files any complaint with the Texas State Board of Medical Examiners.