By Capelo H.B. No. 1913
77R6878 DLF-F
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, under a peer review process that
1-17 meets the requirements of 42 U.S.C. Section 11101 et seq., as
1-18 amended. In [except in] cases in which there is imminent harm to a
1-19 patient's health or an action by a state medical or other physician
1-20 licensing board or other government agency that effectively impairs
1-21 a physician's or practitioner's ability to practice medicine or in
1-22 cases of fraud or malfeasance, the peer review process must be
1-23 initiated simultaneously with the termination or suspension. Any
1-24 recommendation of the panel shall be provided to the affected
2-1 physician or practitioner. An [In the event of an] insurer
2-2 determination contrary to any recommendation of the panel must be
2-3 for good cause shown, and a written explanation of the insurer's
2-4 determination shall also be provided [on request] to the affected
2-5 physician or practitioner. On request, an expedited review process
2-6 shall be made available to a physician or practitioner who is being
2-7 terminated. The expedited review process shall comply with rules
2-8 established by the commissioner.
2-9 (o) A preferred provider who is injured by an insurer's
2-10 failure to follow the due process procedures required under
2-11 Subsection (g) of this section may bring an action against the
2-12 insurer to recover:
2-13 (1) the damages incurred;
2-14 (2) court costs and attorney's fees reasonable in
2-15 relation to the amount of work expended;
2-16 (3) an order enjoining the act or failure to act; and
2-17 (4) other relief the court considers proper.
2-18 (p) A preferred provider may bring an action under
2-19 Subsection (o) of this section on the person's own behalf and on
2-20 behalf of others similarly situated.
2-21 SECTION 2. Section 18A, Texas Health Maintenance Organization
2-22 Act (Chapter 20A, Vernon's Texas Insurance Code), as added by
2-23 Chapter 1026, Acts of the 75th Legislature, Regular Session, 1997,
2-24 is amended by amending Subsection (b) and adding Subsections (k)
2-25 and (l) 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 under a peer review process that meets the requirements of 42
3-8 U.S.C. Section 11101 et seq., as amended. In [except in] a case in
3-9 which there is imminent harm to patient health or an action by a
3-10 state medical or dental board, other medical or dental licensing
3-11 board, or other licensing board or other government agency, that
3-12 effectively impairs the physician's or provider's ability to
3-13 practice medicine, dentistry, or another profession, or in a case
3-14 of fraud or malfeasance, the peer review process must be initiated
3-15 simultaneously with the termination or suspension. The advisory
3-16 review panel shall be composed of physicians and providers,
3-17 including at least one representative in the physician's or
3-18 provider's specialty or a similar specialty, if available,
3-19 appointed to serve on the standing quality assurance committee or
3-20 utilization review committee of the health maintenance
3-21 organization. The decision of the advisory review panel must be
3-22 considered and [but] is [not] binding on the health maintenance
3-23 organization, except for good cause shown. The health maintenance
3-24 organization shall provide to the affected physician or provider,
3-25 on request, a copy of the recommendation of the advisory review
3-26 panel and the health maintenance organization's determination.
3-27 (k) A physician or provider who is injured by a health
4-1 maintenance organization's failure to follow the due process
4-2 procedures required under Subsection (b) of this section may bring
4-3 an action against the health maintenance organization to recover:
4-4 (1) the damages incurred;
4-5 (2) court costs and attorney's fees reasonable in
4-6 relation to the amount of work expended;
4-7 (3) an order enjoining the act or failure to act; and
4-8 (4) other relief the court considers proper.
4-9 (l) A physician or provider may bring an action under
4-10 Subsection (k) of this section on the person's own behalf and on
4-11 behalf of others similarly situated.
4-12 SECTION 3. This Act applies only to a contract between an
4-13 insurer and a preferred provider or a health maintenance
4-14 organization and a physician or provider that is entered into or
4-15 renewed on or after the effective date of this Act. A contract
4-16 that is entered into or renewed before the effective date of this
4-17 Act is governed by the law in effect immediately before the
4-18 effective date of this Act, and that law is continued in effect for
4-19 that purpose.
4-20 SECTION 4. This Act takes effect immediately if it receives
4-21 a vote of two-thirds of all the members elected to each house, as
4-22 provided by Section 39, Article III, Texas Constitution. If this
4-23 Act does not receive the vote necessary for immediate effect, this
4-24 Act takes effect September 1, 2001.