HBA-MPM C.S.H.B. 2644 77(R)    BILL ANALYSIS


Office of House Bill AnalysisC.S.H.B. 2644
By: Brimer
Business & Industry
4/16/2001
Committee Report (Substituted)



BACKGROUND AND PURPOSE 

Currently, some insurance carriers as well as governmental entities
(carriers) establish arrangements with independent or intermediary
companies (companies) to reduce the cost of medical care so that it is less
than that established by  Texas Workers' Compensation Commission (TWCC)
guidelines.  The companies review and audit medical bills and pharmacy
bills, and forward the payment to the insured party.  Bringing together
many purchasers of medical services allows the companies to negotiate lower
costs and pass the savings on to the insured.  As medical costs continue to
rise, the savings produced by companies needs to be encouraged.  C.S.H.B.
2644 clarifies that the companies are subject to the direction of the
carrier and grants statutory authority for agreements between a company and
a carrier for the purposes of forwarding payments. 

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. 2644 amends the Labor Code to authorize an insurance carrier to
contract with a separate entity to forward payments for medical services.
The bill specifies that any payment due the insurance carrier from a
separate entity must be made in accordance with the contract.  The bill
provides that the separate entity is subject to the direction of the
insurance carrier, and the insurance carrier is responsible for the actions
of the separate entity.   

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. 2644 differs from the original by specifying that a payment due to
an insurance carrier from a separate entity must be made in accordance with
the contract between the insurance carrier and the entity.