SRC-CTC S.B. 594 77(R)   BILL ANALYSIS


Senate Research Center   S.B. 594
77R5897 PB-FBy: Harris
Business & Commerce
2/16/2001
As Filed


DIGEST AND PURPOSE 

Currently, hospitals and other health care providers are receiving an
increasing number of denials and reductions in payments based on
utilization review determinations that are made after preauthorization for
treatment or services has been obtained from the health benefit plan
carrier (payor).  As proposed, S.B. 594 prohibits the reduction in or
denial of payment by the payor if preauthorization for health care services
or a particular number of inpatient days has been done.  It also redefines
utilization review to include retrospective reviews. 

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 2(20), Article 21.58A, Insurance Code, to
redefine "utilization review." 

SECTION 2.  Amends Section 4, Article 21.58A, Insurance Code, by adding
Subsection (p), to prohibit a utilization review agent, through a
retrospective review, to reduce or deny payment or the number of days of
inpatient care for which a health insurance policy or health benefit plan
provides benefits if the services received by the enrollee were
preauthorized by the payor under the health insurance policy or benefit
plan.   Sets forth the conditions under which this subsection does not
apply. 

SECTION 3.  Repealer: Section 11 (Claims Reviews of Medical Necessity),
Article 21.58A, Insurance Code. 

SECTION 4.  Makes application of this Act prospective.

SECTION 5.  Effective date: September 1, 2001.