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 2-7     admission privileges have been revoked or suspended for longer than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