HBA-NRS C.S.H.B. 1913 77(R)BILL ANALYSIS


Office of House Bill AnalysisC.S.H.B. 1913
By: Capelo
Insurance
4/23/2001
Committee Report (Substituted)



BACKGROUND AND PURPOSE 

Current law requires a preferred provider organization (PPO) or health
maintenance organization (HMO) to provide due process to a provider through
the use of an advisory panel of physicians selected by the PPO or HMO
before the provider is deselected from the PPO's or HMO's  health plan.
Since the panel's decision is of an advisory nature only, a provider who
brings a case before the panel may still be deselected from the health plan
without good cause.  Providers may seek legal redress if they feel their
deselection from a plan is unwarranted, but may not be able to pursue the
action due to time constraints cost concerns and the improbability of
prevailing in the suit. C.S.H.B. 1913 strengthens the peer review process
by requiring the process to meet certain federal guidelines regarding good
faith professional review activities if a contributing cause of the
termination of a contract is based on utilization review, quality review,
or any action reported to the National Practitioner Data Bank and
authorizing aggrieved parties to bring an action for failure to follow
procedures. 

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. 

ANALYSIS

C.S.H.B. 1913 amends the Insurance Code to provide that if a contributing
cause of the termination of or provider contract by a preferred provider
organization (PPO) or health maintenance organization (HMO). is based on
utilization review, quality review, or any action reported to the National
Practitioner Data Bank, the review mechanism must be a peer review process
that meets federal guidelines for good faith professional review activities
and must be conducted before the PPO or HMO files any complaint with the
Texas State Board of Medical Examiners. The bill provides that a PPO or HMO
determination that is contrary to any recommendation of an advisory review
panel must be for good cause shown. In cases in which there is imminent
harm to a patient's health or an action by a state licensing board or other
government agency that effectively impairs a physician's, practitioner's,
or provider's ability to practice medicine, dentistry, or another
profession, or in a case of fraud or malfeasance, the bill provides that
the peer review process must be initiated simultaneously with the
termination or suspension of a contract. 

The bill authorizes a provider who is injured by an HMO's or PPO's failure
to follow the required procedures to bring an action against the PPO or HMO
on the person's own behalf and on the behalf of others similarly situated
for specified damages, costs, fees, orders, and relief.  

EFFECTIVE DATE

On passage, or if the Act does not receive the necessary vote, the Act
takes effect September 1, 2001. 




 COMPARISON OF ORIGINAL TO SUBSTITUTE

C.S.H.B. 1913 modifies the original bill by providing that a peer review
process must meet federal guidelines only if a contributing cause of the
termination of a contract is based on utilization review, quality review,
or any other action reported to the National Practitioner Data Bank and
specifying that the process must be conducted before a  preferred provider
organization or health maintenance organization files any complaint with
the Texas State Board of Medical Examiners.