By Harris                                              S.B. No. 594
         77R5897 PB-F                           
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to retrospective reviews of health care services by
 1-3     utilization review agents.
 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-5           SECTION 1. Section 2(20), Article 21.58A, Insurance Code, is
 1-6     amended to read as follows:   
 1-7                 (20)  "Utilization review" means a system for
 1-8     prospective, retrospective, or concurrent review of the medical
 1-9     necessity and appropriateness of health care services provided,
1-10     being provided, or proposed to be provided to an individual within
1-11     this state.  Utilization review shall not include elective requests
1-12     for clarification of coverage.
1-13           SECTION 2. Section 4, Article 21.58A, Insurance Code, is
1-14     amended by adding Subsection (p) to read as follows:
1-15           (p)  A utilization review agent may not, through a
1-16     retrospective review, reduce or deny payment for health care
1-17     services or reduce or deny the number of days of inpatient care for
1-18     which a health insurance policy or health benefit plan provides
1-19     benefits if the health care services or inpatient days received by
1-20     the enrollee were preauthorized by the payor under the health
1-21     insurance policy or health benefit plan.  This subsection does not
1-22     apply if:
1-23                 (1)  the enrollee's coverage was canceled for fraud,
1-24     misrepresentation, or nonpayment of premiums; or
 2-1                 (2)  the preauthorization was based on a material
 2-2     omission or misrepresentation made by the treating health care
 2-3     provider regarding the enrollee's health condition.
 2-4           SECTION 3. Section 11, Article 21.58A, Insurance Code, is
 2-5     repealed.
 2-6           SECTION 4. The change in law made by Article 21.58A,
 2-7     Insurance Code, as amended by this Act, applies only to a
 2-8     retrospective review performed by a utilization review agent on or
 2-9     after the effective date of this Act.  A retrospective review
2-10     performed by a utilization review agent before the effective date
2-11     of this Act is governed by the law as it existed immediately before
2-12     that date, and that law is continued in effect for this purpose.
2-13           SECTION 5. This Act takes effect September 1, 2001.