HBA-ATS H.B. 3179 76(R)    BILL ANALYSIS


Office of House Bill AnalysisH.B. 3179
By: Lewis, Glenn
Insurance
4/6/1999
Introduced



BACKGROUND AND PURPOSE 

Texas case law has explicitly stated that the purpose of Section 4(4)
(Boycott, Coercion, and Intimidation), Article 21.21, Insurance Code, is to
prevent monopoly or unreasonable restraint in the business of supplying
insurance.  Nevertheless, some health maintenance organizations (HMOs) and
other managed care organizations may be violating the law by dictating that
health care providers with whom they contract must participate in all of
the insurers' products as a condition of participating in a desired
product.  Failure to participate in all of the products may lead to
termination of the contract. This practice is known as a "tying
arrangement" in the parlance of antitrust language.  Some states have
declared this type of tying arrangement to be an unfair trade practice. 

H.B. 3179 redefines "coercion" under Article 21.21, Insurance Code, to
include an action or agreement by any entity subject to the Insurance Code
that offers multiple health plans or products and requires a health care
provider, as a condition of participation in a health plan or product of
the entity, to participate in any of the entity's other health plans or
products. 

RULEMAKING AUTHORITY

It is the opinion of the Office of House Bill Analysis that this bill does
not expressly delegate any additional rulemaking authority to a state
officer, department, agency, or institution. 

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Section 4(4), Article 21.21, Insurance Code, to add the
provision that coercion includes an action or agreement by any entity
subject to this code that offers multiple health plans or products and
requires a health care provider, as a condition of participation in a
health plan or product of the entity, to participate in any of the entity's
other health plans or products. 

SECTION 2.  Effective date: September 1, 1999.

SECTION 3.  Emergency clause.