78R2069 PB-F
By: Goodman H.B. No. 648
A BILL TO BE ENTITLED
AN ACT
relating to standard physician contract forms for use in managed
care plans.
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 MANAGED CARE CONTRACTS FOR PHYSICIANS
Sec. 1. DEFINITIONS. In this article:
(1) "Managed care entity" means an entity described by
Section 2 of this article that issues a managed care plan.
(2) "Managed care plan" means a health benefit plan:
(A) under which health care services are provided
to enrollees through contracts with physicians, other health care
professionals, or health care facilities; and
(B) that provides financial incentives to
enrollees in the plan to use participating physicians, health care
professionals, and facilities.
Sec. 2. APPLICABILITY OF ARTICLE. This article applies to a
health maintenance organization, a preferred provider
organization, an approved nonprofit health corporation that holds a
certificate of authority under Chapter 844 of this code, and any
other entity that issues a managed care plan, including:
(1) an insurance company;
(2) a group hospital service corporation operating
under Chapter 842 of this code;
(3) a fraternal benefit society operating under
Chapter 885 of this code; or
(4) a stipulated premium insurance company operating
under Chapter 884 of this code.
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
managed care entities in entering into contracts with physicians;
and
(2) require managed care entities 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 managed care entity 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 managed care entity prepare
with equal representation;
(3) the physician and the managed care entity mutually
agree may be used; and
(4) would not cause a managed care entity 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 managed
care entity may not be subsequently modified unless the
modification is agreed to by the physician and the managed care
entity.
(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 managed care
entity;
(2) provide that any change in the contract must be
disclosed to all parties; and
(3) identify all payers under the contract.
(f) A contract form subject to this article must require the
use of a standardized explanation of benefits, to be available both
electronically and in writing. The 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; and
(4) the contract or network origin of any discount.
(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 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 plan;
(6) one individual who serves as a provider relations
director or contract manager for an insurer, health maintenance
organization, or health 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.
Sec. 5. CERTAIN DISCRIMINATION PROHIBITED. A managed care
entity may not:
(1) discriminate against a physician who uses a
standard contract form adopted under this article;
(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. EFFECT OF VIOLATION. (a) A violation of this
article or a rule adopted under this article by a managed care
entity constitutes an unfair or deceptive act or practice in the
business of insurance for the purposes of Article 21.21 of this code
and a violation of Article 21.21A of this code.
(b) The commissioner may suspend or revoke a managed care
entity's license or other authority to engage in the business of
insurance in this state if the commissioner determines that the
managed care entity has failed to use a contract form the use of
which is required under this article.
SECTION 2. 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 3. Unless an exception applies, a managed care
entity shall use a standard contract form adopted under Section 3,
Article 21.52P, Insurance Code, as added by this Act, for any
contract between the managed care entity and a physician signed or
renewed on or after January 1, 2005.
SECTION 4. 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.