77R11497 DLF-F                           
         By Capelo                                             H.B. No. 1913
         Substitute the following for H.B. No. 1913:
         By Lewis of Tarrant                               C.S.H.B. No. 1913
                                A BILL TO BE ENTITLED
 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) and adding
 1-8     Subsections (o) and (p) to read as 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 utilization review,  quality review,  or
1-18     any action reported to the National Practitioner Data Bank, the
1-19     review mechanism must be a peer review process that meets the
1-20     requirements of 42 U.S.C. Section 11101 et seq., as amended, and
1-21     must be conducted before the preferred provider organization files
1-22     any complaint, as provided under state law or 42 U.S.C. Section
1-23     11101 et seq., as amended, with the Texas State Board of Medical
1-24     Examiners. In [, except in] cases in which there is imminent harm
 2-1     to a patient's health or an action by a state medical or other
 2-2     physician licensing board or other government agency that
 2-3     effectively impairs a physician's or practitioner's ability to
 2-4     practice medicine or in cases of fraud or malfeasance, the peer
 2-5     review process must be initiated simultaneously with the
 2-6     termination or suspension.  Any recommendation of the panel shall
 2-7     be provided to the affected physician or practitioner.  An [In the
 2-8     event of an] insurer determination contrary to any recommendation
 2-9     of the panel must be for good cause shown, and a written
2-10     explanation of the insurer's determination shall also be provided
2-11     [on request] to the affected physician or practitioner.  On
2-12     request, an expedited review process shall be made available to a
2-13     physician or practitioner who is being terminated.  The expedited
2-14     review process shall comply with rules established by the
2-15     commissioner.
2-16           (o)  A preferred provider who is injured by an insurer's
2-17     failure to follow the procedures required under Subsection (g) of
2-18     this section may bring an action against the insurer to recover:
2-19                 (1)  the damages incurred;
2-20                 (2)  court costs and attorney's fees reasonable in
2-21     relation to the amount of work expended;
2-22                 (3)  an order enjoining the act or failure to act; and
2-23                 (4)  other relief the court considers proper.
2-24           (p)  A preferred provider may bring an action under
2-25     Subsection (o) of this section on the person's own behalf and on
2-26     behalf of others similarly situated.
2-27           SECTION 2. Section 18A, Texas Health Maintenance Organization
 3-1     Act (Article 20A.18A, Vernon's Texas Insurance Code), as added by
 3-2     Chapter 1026, Acts of the 75th Legislature, Regular Session, 1997,
 3-3     is amended by amending Subsection (b) and adding Subsections (k)
 3-4     and (l) to read as follows:
 3-5           (b)  Before terminating a contract with a physician or
 3-6     provider, the health maintenance organization shall provide a
 3-7     written explanation to the physician or provider of the reasons for
 3-8     termination.  On request and, except as provided by this
 3-9     subsection, before the effective date of the termination, but
3-10     within a period not to exceed 60 days, a physician or provider
3-11     shall be entitled to a review of the health maintenance
3-12     organization's proposed termination by an advisory review panel.
3-13     If a contributing cause of the termination is based on utilization
3-14     review,  quality review,  or any action reported to the National
3-15     Practitioner Data Bank, the review mechanism must be a peer review
3-16     process that meets the requirements of 42 U.S.C. Section 11101 et
3-17     seq., as amended, and must be conducted before the health
3-18     maintenance organization files any complaint, as provided under
3-19     state law or 42 U.S.C. Section 11101 et seq., as amended, with the
3-20     Texas State Board of Medical Examiners. In [, except in] a case in
3-21     which there is imminent harm to patient health or an action by a
3-22     state medical or dental board, other medical or dental licensing
3-23     board, or other licensing board or other government agency, that
3-24     effectively impairs the physician's or provider's ability to
3-25     practice medicine, dentistry, or another profession, or in a case
3-26     of fraud or malfeasance, the peer review process must be initiated
3-27     simultaneously with the termination or suspension.  The advisory
 4-1     review panel shall be composed of physicians and providers,
 4-2     including at least one representative in the physician's or
 4-3     provider's specialty or a similar specialty, if available,
 4-4     appointed to serve on the standing quality assurance committee or
 4-5     utilization review committee of the health maintenance
 4-6     organization.  The decision of the advisory review panel must be
 4-7     considered and [but] is [not] binding on the health maintenance
 4-8     organization, except for good cause shown.  The health maintenance
 4-9     organization shall provide to the affected physician or provider,
4-10     on request, a copy of the recommendation of the advisory review
4-11     panel and the health maintenance organization's determination.
4-12           (k)  A physician or provider who is injured by a health
4-13     maintenance organization's failure to follow the procedures
4-14     required under Subsection (b) of this section may bring an action
4-15     against the health maintenance organization to recover:
4-16                 (1)  the damages incurred;
4-17                 (2)  court costs and attorney's fees reasonable in
4-18     relation to the amount of work expended;
4-19                 (3)  an order enjoining the act or failure to act; and
4-20                 (4)  other relief the court considers proper.
4-21           (l)  A physician or provider may bring an action under
4-22     Subsection (k) of this section on the person's own behalf and on
4-23     behalf of others similarly situated.
4-24           SECTION 3. This Act applies only to a contract between an
4-25     insurer and a preferred provider or a health maintenance
4-26     organization and a physician or provider that is entered into or
4-27     renewed on or after the effective date of this Act.  A contract
 5-1     that is entered into or renewed before the effective date of this
 5-2     Act is governed by the law in effect immediately before the
 5-3     effective date of this Act, and that law is continued in effect for
 5-4     that purpose.
 5-5           SECTION 4.  This Act takes effect immediately if it receives
 5-6     a vote of two-thirds of all the members elected to each house, as
 5-7     provided by Section 39, Article III, Texas Constitution.  If this
 5-8     Act does not receive the vote necessary for immediate effect, this
 5-9     Act takes effect September 1, 2001.