HBA-NIK S.B. 130 76(R)BILL ANALYSIS


Office of House Bill AnalysisS.B. 130
By: Nelson
Insurance
4/11/1999
Engrossed



BACKGROUND AND PURPOSE 

Currently, health care providers may contract with health insurance plans
to give a discounted rate on their services in exchange for being listed as
a preferred provider. An insurer or independent agent may deliberately
mislead providers and doctors by claiming to belong to an exclusive
preferred provider arrangement in order to receive a discount.  S.B. 130
holds insurers in violation of an unfair act or deceptive practice under
the Insurance Code if the insurers knowingly mislead a provider into giving
them discounts to which the insurers are not entitled. 

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 Article 3.70-3C, Insurance Code, as added by Chapter
1024, Acts of the 75th Legislature, Regular Session, 1997, by adding
Section 7A, as follows: 

Sec. 7A. RESTRICTIONS ON PAYMENT AND REIMBURSEMENT. (a) Prohibits an
insurer or third party administrator, except as provided by Subsection (b),
from reimbursing a physician, practitioner, hospital, institutional
provider, or organization of physicians and health care providers on a
discounted fee basis for covered services that are provided to an insured
unless certain enumerated provisions are followed relating to contracts
between the insured or third party administrator and a specified health
care provider. 

(b) Prohibits a party to a preferred provider contract from selling,
leasing, or otherwise transferring information regarding the payment or
reimbursement terms of the contract without the express authority and prior
adequate notification of the other contracting parties.  Provides that this
subsection does not affect the authority of the commissioner of insurance
under this code to request and obtain information. 

(c) Provides that an insurer or third party administrator who violates this
section commits an unfair act or deceptive practice in violation of
Articles 21.21 Unfair Competition and Unfair Practices and 21.21-2 (Unfair
Claim Settlement Practices) of this code. 

SECTION 2. Emergency clause.
  Effective date: upon passage.