HBA-NRS H.B. 1913 77(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 1913 By: Capelo Insurance 3/11/2001 Introduced BACKGROUND AND PURPOSE Current law requires a preferred provider organization (PPO) or health maintenance organization (HMO) to provide due process to a physician or provider through the use of an advisory panel of physicians selected by the PPO or HMO before the physician or provider is deselected from the PPO's or HMO's health plan. Since the panel's decision is of an advisory nature only, a physician or 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. House Bill 1913 strengthens the peer review process by requiring the process to meet certain federal guidelines regarding good faith professional review activities and authorizing aggrieved parties to bring an action for failure to follow due process 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 House Bill 1913 amends the Insurance Code to require the review process for termination of a physician or provider contract, by a preferred provider organization (PPO) or health maintenance organization (HMO) to incorporate a peer review process that meets federal guidelines for good faith professional review activities. 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 preferred provider who is injured by a PPO's failure to follow the required due process procedures or a physician or provider who is injured by an HMO's failure to follow the required due process procedures to bring an action against a PPO or HMO on the person's own behalf and on the behalf of others similarly situated. In addition, such persons may bring an action against a PPO or HMO 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.