1-1 AN ACT
1-2 relating to termination of certain contracts by a preferred
1-3 provider organization or health maintenance organization.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Section 3, Article 3.70-3C, Insurance Code, as
1-6 added by Chapter 1024, Acts of the 75th Legislature, Regular
1-7 Session, 1997, is amended by amending Subsection (g) to read as
1-8 follows:
1-9 (g) Before terminating a contract with a preferred provider,
1-10 the insurer shall provide written reasons for the termination. On
1-11 request and, except as provided by this subsection, prior [Prior]
1-12 to termination of a physician or practitioner, but within a period
1-13 not to exceed 60 days, the insurer shall[, on request,] provide a
1-14 reasonable review mechanism that incorporates, in an advisory role
1-15 [only], a review panel selected in the manner described in
1-16 Subsection (b)(3) of this section. If a contributing cause of the
1-17 termination is based on quality review, including quality issues
1-18 involving utilization patterns or any action reported to the
1-19 National Practitioner Data Bank, the review mechanism must be a
1-20 peer review process that meets the requirements of 42 U.S.C.
1-21 Section 11101 et seq., as amended, and must be conducted before the
1-22 preferred provider organization files any complaint, as provided
1-23 under state law or 42 U.S.C. Section 11101 et seq., as amended,
1-24 with the Texas State Board of Medical Examiners. In [, except in]
2-1 cases in which there is imminent harm to a patient's health or an
2-2 action by a state medical or other physician licensing board or
2-3 other government agency that effectively impairs a physician's or
2-4 practitioner's ability to practice medicine or in cases of fraud or
2-5 malfeasance, the insurer may immediately suspend the physician or
2-6 practitioner if the physician's or practitioner's facility
2-7 admission privileges have been revoked or suspended for longer than
2-8 30 days because of quality of care issues or the physician or
2-9 provider is subject to an order of the Texas State Board of Medical
2-10 Examiners that revokes, suspends, or restricts the physician's or
2-11 provider's license, if the review process is initiated
2-12 simultaneously with the termination or suspension. Any
2-13 recommendation of the panel shall be provided to the affected
2-14 physician or practitioner. An [In the event of an] insurer
2-15 determination contrary to any recommendation of the panel must be
2-16 for good cause shown, and a written explanation of the insurer's
2-17 determination shall also be provided [on request] to the affected
2-18 physician or practitioner. On request, an expedited review process
2-19 shall be made available to a physician or practitioner who is being
2-20 terminated. The expedited review process shall comply with rules
2-21 established by the commissioner.
2-22 SECTION 2. Section 18A, Texas Health Maintenance Organization
2-23 Act (Article 20A.18A, Vernon's Texas Insurance Code), as added by
2-24 Chapter 1026, Acts of the 75th Legislature, Regular Session, 1997,
2-25 is amended by amending Subsection (b) to read as follows:
2-26 (b) Before terminating a contract with a physician or
2-27 provider, the health maintenance organization shall provide a
3-1 written explanation to the physician or provider of the reasons for
3-2 termination. On request and, except as provided by this
3-3 subsection, before the effective date of the termination, but
3-4 within a period not to exceed 60 days, a physician or provider
3-5 shall be entitled to a review of the health maintenance
3-6 organization's proposed termination by an advisory review panel.
3-7 If a contributing cause of the termination is based on quality
3-8 review, including quality issues involving utilization patterns or
3-9 any action reported to the National Practitioner Data Bank, the
3-10 review mechanism must be a peer review process that meets the
3-11 requirements of 42 U.S.C. Section 11101 et seq., as amended, and
3-12 must be conducted before the health maintenance organization files
3-13 any complaint, as provided under state law or 42 U.S.C. Section
3-14 11101 et seq., as amended, with the Texas State Board of Medical
3-15 Examiners. In [, except in] a case in which there is imminent harm
3-16 to patient health or an action by a state medical or dental board,
3-17 other medical or dental licensing board, or other licensing board
3-18 or other government agency, that effectively impairs the
3-19 physician's or provider's ability to practice medicine, dentistry,
3-20 or another profession, or in a case of fraud or malfeasance, the
3-21 health maintenance organization may immediately suspend the
3-22 physician or practitioner if the physician's or practitioner's
3-23 facility admission privileges have been revoked or suspended for
3-24 longer than 30 days because of quality of care issues or the
3-25 physician or provider is subject to an order of the Texas State
3-26 Board of Medical Examiners that revokes, suspends, or restricts the
3-27 physician's or provider's license, if the peer review process is
4-1 initiated simultaneously with the termination or suspension. The
4-2 advisory review panel shall be composed of physicians and
4-3 providers, including at least one representative in the physician's
4-4 or provider's specialty or a similar specialty, if available,
4-5 appointed to serve on the standing quality assurance committee or
4-6 utilization review committee of the health maintenance
4-7 organization. The decision of the advisory review panel must be
4-8 considered and [but] is [not] binding on the health maintenance
4-9 organization, except for good cause shown. The health maintenance
4-10 organization shall provide to the affected physician or provider,
4-11 on request, a copy of the recommendation of the advisory review
4-12 panel and the health maintenance organization's determination.
4-13 SECTION 3. This Act applies only to a contract between an
4-14 insurer and a preferred provider or a health maintenance
4-15 organization and a physician or provider that is entered into or
4-16 renewed on or after the effective date of this Act. A contract
4-17 that is entered into or renewed before the effective date of this
4-18 Act is governed by the law in effect immediately before the
4-19 effective date of this Act, and that law is continued in effect for
4-20 that purpose.
4-21 SECTION 4. This Act takes effect immediately if it receives
4-22 a vote of two-thirds of all the members elected to each house, as
4-23 provided by Section 39, Article III, Texas Constitution. If this
4-24 Act does not receive the vote necessary for immediate effect, this
4-25 Act takes effect September 1, 2001.
_______________________________ _______________________________
President of the Senate Speaker of the House
I certify that H.B. No. 1913 was passed by the House on May
8, 2001, by the following vote: Yeas 143, Nays 1, 1 present, not
voting; and that the House concurred in Senate amendments to H.B.
No. 1913 on May 24, 2001, by the following vote: Yeas 134, Nays 0,
1 present, not voting.
_______________________________
Chief Clerk of the House
I certify that H.B. No. 1913 was passed by the Senate, with
amendments, on May 17, 2001, by the following vote: Yeas 30, Nays
0, 1 present, not voting.
_______________________________
Secretary of the Senate
APPROVED: __________________________
Date
__________________________
Governor