By: Nelson, et al. S.B. No. 1571
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to standard physician contract forms for use in managed
1-3 care plans.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Subchapter E, Chapter 21, Insurance Code, is
1-6 amended by adding Article 21.52K to read as follows:
1-7 Art. 21.52K. STANDARD MANAGED CARE CONTRACTS FOR PHYSICIANS
1-8 Sec. 1. DEFINITIONS. In this article:
1-9 (1) "Managed care entity" means an entity described by
1-10 Section 2 of this article.
1-11 (2) "Managed care plan" means a health benefit plan:
1-12 (A) under which health care services are
1-13 provided to enrollees through contracts with physicians, other
1-14 health care professionals, or health care facilities; and
1-15 (B) that provides financial incentives to
1-16 enrollees in the plan to use the participating physicians and other
1-17 health care professionals and participating health care facilities.
1-18 Sec. 2. APPLICABILITY OF ARTICLE. This article applies to a
1-19 health maintenance organization, a preferred provider organization,
1-20 an approved nonprofit health corporation that holds a certificate
1-21 of authority under Article 21.52F of this code, and any other
1-22 entity that offers a managed care plan, including:
1-23 (1) an insurance company;
1-24 (2) a group hospital service corporation operating
1-25 under Chapter 20 of this code;
2-1 (3) a fraternal benefit society operating under
2-2 Chapter 10 of this code; or
2-3 (4) a stipulated premium insurance company operating
2-4 under Chapter 22 of this code.
2-5 Sec. 3. STANDARD PHYSICIAN CONTRACTS. (a) Except as
2-6 provided by Subsection (b) of this section, the commissioner, in
2-7 consultation with the contract advisory panel, shall adopt rules
2-8 that establish standard contract forms for use by managed care
2-9 entities in entering into contracts with physicians and require
2-10 managed care entities to use those contracts.
2-11 (b) A managed care entity or a physician may use a contract
2-12 form other than a form required under Subsection (a) of this
2-13 section that:
2-14 (1) the physician asks to be used;
2-15 (2) the physician and managed care entity prepare with
2-16 equal representation;
2-17 (3) the physician and the managed care entity mutually
2-18 agree may be used; and
2-19 (4) would not cause a managed care entity to violate
2-20 Section 5 of this article.
2-21 Sec. 4. CONTRACT ADVISORY PANEL; MEMBERSHIP. (a) The
2-22 contract advisory panel is established as an advisory panel to the
2-23 commissioner to advise and make recommendations to the commissioner
2-24 regarding the adoption of standard contract forms under Section 3
2-25 of this article.
2-26 (b) The advisory panel is composed of nine members appointed
3-1 jointly by the lieutenant governor and the speaker of the house of
3-2 representatives as follows:
3-3 (1) two attorneys who primarily represent actively
3-4 practicing physicians;
3-5 (2) two attorneys who primarily represent insurers,
3-6 health maintenance organizations, or health plans;
3-7 (3) one individual who serves as manager for
3-8 independently practicing physicians;
3-9 (4) one physician actively engaged in the independent
3-10 practice of medicine in this state;
3-11 (5) one individual who serves as medical director for
3-12 an insurer, health maintenance organization, or health plan;
3-13 (6) one individual who serves as a provider relations
3-14 director or contract manager for an insurer, health maintenance
3-15 organization, or health plan; and
3-16 (7) one individual who represents consumers.
3-17 (c) The consumer representative on the advisory panel may
3-18 not:
3-19 (1) receive any compensation from or be employed
3-20 directly or indirectly by physicians, health care providers,
3-21 insurers, health maintenance organizations, or other health benefit
3-22 plan issuers;
3-23 (2) be a health care provider; or
3-24 (3) be a person required to be registered as a
3-25 lobbyist under Chapter 305, Government Code, because of the
3-26 person's activities for compensation on behalf of a profession
4-1 related to the operation of the advisory panel.
4-2 (d) Members serve without compensation and at the will of
4-3 the lieutenant governor and speaker of the house of
4-4 representatives.
4-5 Sec. 5. CERTAIN DISCRIMINATION PROHIBITED. A managed care
4-6 entity may not:
4-7 (1) discriminate against a physician who uses a
4-8 standard contract form adopted under this article;
4-9 (2) require or use reimbursement differentials or
4-10 financial incentives that penalize or place a physician at a
4-11 disadvantage based in whole or in part on the use of a standard
4-12 contract form adopted under this article; or
4-13 (3) require a physician to waive the use of a standard
4-14 contract form adopted under this article.
4-15 Sec. 6. EFFECT OF VIOLATION. (a) A violation of this
4-16 article or a rule adopted under this article by a managed care
4-17 entity constitutes a violation of Articles 21.21 and 21.21A of this
4-18 code and is subject to the remedies available under those articles.
4-19 (b) The commissioner may suspend or revoke a managed care
4-20 entity's license or other authority to engage in the business of
4-21 insurance in this state if the commissioner determines that the
4-22 managed care entity has failed to use a contract form the use of
4-23 which is required under this article.
4-24 SECTION 2. Not later than June 1, 2002, the commissioner of
4-25 insurance shall adopt the rules and contract forms required by
4-26 Section 3, Article 21.52K, Insurance Code, as added by this Act.
5-1 SECTION 3. Unless an exception applies, a managed care
5-2 entity shall use a standard contract form adopted under Section 3,
5-3 Article 21.52K, Insurance Code, as added by this Act, for any
5-4 contract between the managed care entity and a physician signed or
5-5 renewed on or after January 1, 2003.
5-6 SECTION 4. This Act takes effect immediately if it receives
5-7 a vote of two-thirds of all the members elected to each house, as
5-8 provided by Section 39, Article III, Texas Constitution. If this
5-9 Act does not receive the vote necessary for immediate effect, this
5-10 Act takes effect September 1, 2001.