1-1 By: Capelo (Senate Sponsor - Shapleigh) H.B. No. 1913
1-2 (In the Senate - Received from the House May 9, 2001;
1-3 May 10, 2001, read first time and referred to Committee on Business
1-4 and Commerce; May 11, 2001, reported favorably by the following
1-5 vote: Yeas 5, Nays 0; May 11, 2001, sent to printer.)
1-6 A BILL TO BE ENTITLED
1-7 AN ACT
1-8 relating to termination of certain contracts by a preferred
1-9 provider organization or health maintenance organization.
1-10 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-11 SECTION 1. Section 3, Article 3.70-3C, Insurance Code, as
1-12 added by Chapter 1024, Acts of the 75th Legislature, Regular
1-13 Session, 1997, is amended by amending Subsection (g) and adding
1-14 Subsections (o) and (p) to read as follows:
1-15 (g) Before terminating a contract with a preferred provider,
1-16 the insurer shall provide written reasons for the termination. On
1-17 request and, except as provided by this subsection, prior [Prior]
1-18 to termination of a physician or practitioner, but within a period
1-19 not to exceed 60 days, the insurer shall[, on request,] provide a
1-20 reasonable review mechanism that incorporates, in an advisory role
1-21 [only], a review panel selected in the manner described in
1-22 Subsection (b)(3) of this section. If a contributing cause of the
1-23 termination is based on utilization review, quality review, or
1-24 any action reported to the National Practitioner Data Bank, the
1-25 review mechanism must be a peer review process that meets the
1-26 requirements of 42 U.S.C. Section 11101 et seq., as amended, and
1-27 must be conducted before the preferred provider organization files
1-28 any complaint, as provided under state law or 42 U.S.C. Section
1-29 11101 et seq., as amended, with the Texas State Board of Medical
1-30 Examiners. In [, except in] cases in which there is imminent harm
1-31 to a patient's health or an action by a state medical or other
1-32 physician licensing board or other government agency that
1-33 effectively impairs a physician's or practitioner's ability to
1-34 practice medicine or in cases of fraud or malfeasance, the peer
1-35 review process must be initiated simultaneously with the
1-36 termination or suspension. Any recommendation of the panel shall
1-37 be provided to the affected physician or practitioner. An [In the
1-38 event of an] insurer determination contrary to any recommendation
1-39 of the panel must be for good cause shown, and a written
1-40 explanation of the insurer's determination shall also be provided
1-41 [on request] to the affected physician or practitioner. On
1-42 request, an expedited review process shall be made available to a
1-43 physician or practitioner who is being terminated. The expedited
1-44 review process shall comply with rules established by the
1-45 commissioner.
1-46 (o) A preferred provider who is injured by an insurer's
1-47 failure to follow the procedures required under Subsection (g) of
1-48 this section may bring an action against the insurer to recover:
1-49 (1) the damages incurred;
1-50 (2) court costs and attorney's fees reasonable in
1-51 relation to the amount of work expended;
1-52 (3) an order enjoining the act or failure to act; and
1-53 (4) other relief the court considers proper.
1-54 (p) A preferred provider may bring an action under
1-55 Subsection (o) of this section on the person's own behalf and on
1-56 behalf of others similarly situated.
1-57 SECTION 2. Section 18A, Texas Health Maintenance Organization
1-58 Act (Article 20A.18A, Vernon's Texas Insurance Code), as added by
1-59 Chapter 1026, Acts of the 75th Legislature, Regular Session, 1997,
1-60 is amended by amending Subsection (b) and adding Subsections (k)
1-61 and (l) to read as follows:
1-62 (b) Before terminating a contract with a physician or
1-63 provider, the health maintenance organization shall provide a
1-64 written explanation to the physician or provider of the reasons for
2-1 termination. On request and, except as provided by this
2-2 subsection, before the effective date of the termination, but
2-3 within a period not to exceed 60 days, a physician or provider
2-4 shall be entitled to a review of the health maintenance
2-5 organization's proposed termination by an advisory review panel.
2-6 If a contributing cause of the termination is based on utilization
2-7 review, quality review, or any action reported to the National
2-8 Practitioner Data Bank, the review mechanism must be a peer review
2-9 process that meets the requirements of 42 U.S.C. Section 11101 et
2-10 seq., as amended, and must be conducted before the health
2-11 maintenance organization files any complaint, as provided under
2-12 state law or 42 U.S.C. Section 11101 et seq., as amended, with the
2-13 Texas State Board of Medical Examiners. In [, except in] a case in
2-14 which there is imminent harm to patient health or an action by a
2-15 state medical or dental board, other medical or dental licensing
2-16 board, or other licensing board or other government agency, that
2-17 effectively impairs the physician's or provider's ability to
2-18 practice medicine, dentistry, or another profession, or in a case
2-19 of fraud or malfeasance, the peer review process must be initiated
2-20 simultaneously with the termination or suspension. The advisory
2-21 review panel shall be composed of physicians and providers,
2-22 including at least one representative in the physician's or
2-23 provider's specialty or a similar specialty, if available,
2-24 appointed to serve on the standing quality assurance committee or
2-25 utilization review committee of the health maintenance
2-26 organization. The decision of the advisory review panel must be
2-27 considered and [but] is [not] binding on the health maintenance
2-28 organization, except for good cause shown. The health maintenance
2-29 organization shall provide to the affected physician or provider,
2-30 on request, a copy of the recommendation of the advisory review
2-31 panel and the health maintenance organization's determination.
2-32 (k) A physician or provider who is injured by a health
2-33 maintenance organization's failure to follow the procedures
2-34 required under Subsection (b) of this section may bring an action
2-35 against the health maintenance organization to recover:
2-36 (1) the damages incurred;
2-37 (2) court costs and attorney's fees reasonable in
2-38 relation to the amount of work expended;
2-39 (3) an order enjoining the act or failure to act; and
2-40 (4) other relief the court considers proper.
2-41 (l) A physician or provider may bring an action under
2-42 Subsection (k) of this section on the person's own behalf and on
2-43 behalf of others similarly situated.
2-44 SECTION 3. This Act applies only to a contract between an
2-45 insurer and a preferred provider or a health maintenance
2-46 organization and a physician or provider that is entered into or
2-47 renewed on or after the effective date of this Act. A contract
2-48 that is entered into or renewed before the effective date of this
2-49 Act is governed by the law in effect immediately before the
2-50 effective date of this Act, and that law is continued in effect for
2-51 that purpose.
2-52 SECTION 4. This Act takes effect immediately if it receives
2-53 a vote of two-thirds of all the members elected to each house, as
2-54 provided by Section 39, Article III, Texas Constitution. If this
2-55 Act does not receive the vote necessary for immediate effect, this
2-56 Act takes effect September 1, 2001.
2-57 * * * * *