78R12951 PB-F
By: Goodman H.B. No. 648
Substitute the following for H.B. No. 648:
By: Gallego C.S.H.B. No. 648
A BILL TO BE ENTITLED
AN ACT
relating to the use of certain standard physician contract forms;
providing civil and administrative penalties.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subchapter E, Chapter 21, Insurance Code, is
amended by adding Article 21.52P to read as follows:
Art. 21.52P. STANDARD CONTRACTS FOR PHYSICIAN SERVICES
Sec. 1. DEFINITIONS. In this article:
(1) "Person" means an individual, corporation,
organization, government or governmental subdivision or agency,
business trust, trust, partnership, association, and any other
legal entity.
(2) "Physician" means a person licensed to practice
medicine under Subtitle B, Title 3, Occupations Code.
Sec. 2. APPLICABILITY OF ARTICLE. This article applies to a
person that contracts for or arranges for health care services
provided by a physician to others.
Sec. 3. STANDARD PHYSICIAN CONTRACTS. (a) Except as
provided by Subsection (c) of this section, the commissioner, in
consultation with the contract advisory panel, shall adopt rules
that:
(1) establish standard contract forms for use by a
person in entering into contracts with physicians; and
(2) require that person to use those contracts.
(b) A contract form adopted under this section:
(1) may not waive a provision of state or federal law,
including a provision required by this article; and
(2) must allow a dispute under the contract to be
resolved:
(A) through multiparty arbitration;
(B) through an action brought by an affected
physician in small claims court, up to the limits of the court's
jurisdiction; or
(C) through both actions authorized under
Paragraphs (A) and (B) of this subdivision.
(c) A person described by Section 2 of this article or a
physician may use a contract form other than a form required under
Subsection (a) of this section that:
(1) the physician asks to be used;
(2) the physician and the person prepare with equal
representation;
(3) the physician and the person mutually agree may be
used; and
(4) would not cause a person described by Section 2 of
this article to violate Section 5 of this article.
(d) The terms of a contract form adopted under Subsection
(a) of this section and entered into by a physician and a person
described by Section 2 of this article may not be subsequently
modified unless the modification is agreed to by the physician and
the person.
(e) A contract form adopted under Subsection (a) of this
section must:
(1) provide that the terms of the contract may not be
tied to, modified by, or superseded by a providers' manual or other
document that may be amended at the pleasure of the person;
(2) provide that any change in the contract must be
disclosed to all parties; and
(3) identify all payors under the contract.
(f) A contract form subject to this article must require the
use of a standardized explanation of payments, to be available both
electronically and in writing. The electronic standardized
explanation must comply with federal requirements relating to
electronic dissemination of health care payment information or
advice. The written standardized explanation must include:
(1) the patient account number;
(2) the type of health care service or product
provided;
(3) the payment amount for the health care service or
product provided, listed by:
(A) the code assigned to the health care service
provided under the latest edition of "Current Procedural
Terminology," as published by the American Medical Association; or
(B) detail line;
(4) the contract or network origin of any discount;
(5) the charges actually billed;
(6) the contracted rate;
(7) the amount paid for the health care service or
product;
(8) the amount for which the patient is responsible;
and
(9) a description of any adjustment made under
contract.
(g) A contract form subject to this article must require the
adoption and use of standardized:
(1) patient referral forms; and
(2) preauthorization or precertification forms.
Sec. 4. CONTRACT ADVISORY PANEL; MEMBERSHIP. (a) The
contract advisory panel is established as an advisory panel to the
commissioner to advise and make recommendations to the commissioner
regarding the adoption of standard contract forms under Section 3
of this article.
(b) The advisory panel is composed of nine members appointed
jointly by the lieutenant governor and the speaker of the house of
representatives as follows:
(1) two attorneys who primarily represent actively
practicing physicians;
(2) two attorneys who primarily represent insurers,
health maintenance organizations, or health benefit plans;
(3) one individual who serves as manager for
independently practicing physicians;
(4) one physician actively engaged in the independent
practice of medicine in this state;
(5) one individual who serves as medical director for
an insurer, health maintenance organization, or health benefit
plan;
(6) one individual who serves as a provider relations
director or contract manager for an insurer, health maintenance
organization, or health benefit plan; and
(7) one individual who represents consumers.
(c) The consumer representative on the advisory panel may
not:
(1) receive any compensation from or be employed
directly or indirectly by a physician, health care provider,
insurer, health maintenance organization, or other health benefit
plan issuer;
(2) be a health care provider; or
(3) be a person required to register as a lobbyist
under Chapter 305, Government Code, because of the person's
activities for compensation on behalf of a profession related to
the operation of the advisory panel.
(d) Members of the advisory panel serve without
compensation and at the will of the lieutenant governor and the
speaker of the house of representatives.
(e) The advisory panel is not subject to Chapter 2110,
Government Code.
Sec. 5. CERTAIN DISCRIMINATION PROHIBITED. A person
described by Section 2 of this article may not:
(1) discriminate in any manner against a physician who
uses a standard contract form adopted under this article, including
through the redirection of patients to other physicians or health
care providers;
(2) require or use reimbursement differentials or
financial incentives that penalize or place a physician at a
disadvantage based in whole or in part on the use of a standard
contract form adopted under this article; or
(3) require a physician to waive the use of a standard
contract form adopted under this article.
Sec. 6. ADMINISTRATIVE PENALTY. (a) A person who violates
this article or a rule adopted under this article is subject to an
administrative penalty under Chapter 84 of this code for each
violation.
(b) Each physician contract entered into in violation of
this article constitutes a separate violation for purposes of this
section.
Sec. 7. POWERS OF COMMISSIONER; ENFORCEMENT REMEDIES. (a)
If the commissioner has reason to believe a person has violated this
article or a rule adopted under this article, or that a person
violating this article has engaged in or is threatening to engage in
an unfair act in connection with conduct described by Section 5 of
this article, the commissioner may:
(1) issue a cease and desist order under Section 8 of
this article;
(2) request the attorney general to recover a civil
penalty assessed under Subsection (c) of this section;
(3) seek injunctive relief under Subsection (d) of
this section; or
(4) take any combination of the actions described by
Subdivisions (1)-(3) of this subsection.
(b) If the commissioner has reason to believe that a person
is performing an act that violates this article or a rule adopted
under this article, the commissioner may send a written request for
information relating to that act. Any person who receives a written
request under this subsection shall provide the requested
information to the department not later than the 10th business day
after the date the request is sent.
(c) A person who violates this article or a rule adopted
under this article is subject to a civil penalty of not more than
$10,000 for each act of violation and for each day of violation.
(d) The commissioner may request that the attorney general
bring an action in a district court in Travis County for injunctive
relief to restrain a person from continuing a violation or threat of
violation. On application for injunctive relief and a finding that
a person is violating or threatening to violate this article or a
rule adopted under this article, the district court shall grant the
injunctive relief and issue an injunction without bond.
(e) On request by the commissioner, the attorney general
shall institute and conduct a civil suit in the name of the state
for injunctive relief, to recover a civil penalty, or for both
injunctive relief and a civil penalty.
(f) If the commissioner has reason to believe that a person
is performing an act that violates this article or a rule adopted
under this article, the commissioner may conduct an examination of
that person. Unless the person is another state agency or program,
the person examined shall pay all expenses of the examination. The
expenses must be in an amount certified to be just and reasonable by
the commissioner.
(g) This section does not limit the department to the
remedies specified by this article. Without regard to any prior
proceedings under this article, the department and this state may
elect to use at any time any remedy or action available at law.
Sec. 8. HEARING FOR CEASE AND DESIST ORDER. (a) The
commissioner may set a hearing on whether to issue a cease and
desist order under Section 7 of this article if the commissioner has
reason to believe that a person:
(1) has violated or is threatening to violate this
article or a rule adopted under this article; or
(2) acting in violation of this article or a rule
adopted under this article has engaged in or is threatening to
engage in an unfair act in connection with conduct described by
Section 5 of this article.
(b) The commissioner shall serve on the person a statement
of charges and a notice of hearing in the form provided by Section
2001.052, Government Code, and the applicable rules of the
commissioner.
(c) Except as agreed by the parties with prior written
approval of the commissioner, a hearing under this section may be
held not earlier than the 15th day after the date of service of the
statement and notice required under Subsection (b) of this section.
The hearing shall be conducted in the manner provided for a
contested case under Chapter 2001, Government Code, and the
commissioner's rules.
(d) After a hearing held under this section, the
commissioner may issue against the person charged with a violation
an order that requires that the person immediately cease and desist
from the violation.
Sec. 9. REFERRAL TO ATTORNEY GENERAL. The commissioner may
refer the matter to the attorney general for enforcement if the
commissioner has reason to believe that a person has:
(1) violated a cease and desist order issued under
this article; or
(2) failed to pay a penalty assessed under this
article.
Sec. 10. INFORMATIONAL FILING; FEE; ACCOUNT. (a) A person
required under this article to use the standard contract for
physician services shall file on an annual basis with the
commissioner a statement of the number of individual contracts that
have been executed.
(b) The department shall charge and receive a fee from a
person described by Section 2 of this article, other than a
government or a governmental subdivision or agency, for each
contract executed. The commissioner shall set the fee in an amount
reasonable and necessary to cover the costs of administering this
article, not to exceed $250 for each contract executed. Fees
collected under this subsection shall be deposited to the credit of
the standardized contract account in the general revenue fund, to
be appropriated only to pay the department's costs incurred in
enforcement of this article.
Sec. 11. OTHER REMEDIES. In addition to any other remedy
available under this article, the attorney general may:
(1) bring an action, including an action for
injunctive relief, against a person for a violation of this article
or a rule adopted under this article; and
(2) seek remedies available under Sections 17.58,
17.60, 17.61, and 17.62, Business & Commerce Code.
SECTION 2. Sections 7 and 11, Article 21.52P, Insurance
Code, as added by this Act, apply only to a cause of action that
accrues on or after the effective date of this Act. A cause of
action that accrues before that date is governed by the law as it
existed immediately before the effective date of this Act, and that
law is continued in effect for that purpose.
SECTION 3. Not later than June 1, 2004, the commissioner of
insurance shall adopt the rules and forms required by Section 3,
Article 21.52P, Insurance Code, as added by this Act.
SECTION 4. Unless an exception applies, a person described
by Section 2, Article 21.52P, Insurance Code, as added by this Act,
shall use a standard contract form adopted under Section 3 of that
article for any contract between the person and a physician that is
signed or renewed on or after January 1, 2005.
SECTION 5. This Act takes effect immediately if it receives
a vote of two-thirds of all the members elected to each house, as
provided by Section 39, Article III, Texas Constitution. If this
Act does not receive the vote necessary for immediate effect, this
Act takes effect September 1, 2003.