HBA-TYH H.B. 3039 76(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 3039 By: Smithee Insurance 3/28/1999 Introduced BACKGROUND AND PURPOSE Under existing provisions of antitrust law, physicians wishing to meet and discuss contracts may be subject to an antitrust action. This permits health plans to refuse to negotiate with physicians regarding contract provisions. These contracts contain requirements that can have direct impact on patients. When physicians attempt to form networks that are large enough to oppose certain contract provisions, the health plans can threaten them with antitrust action. H.B. 3039 allows physicians to join together to be represented by knowledgeable individuals to negotiate on their behalf when a health maintenance organization exceeds 15 percent of market share. 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 the Insurance Code by adding Chapter 27, as follows: Art. 27.01. Finding and Purposes. Provides legislative findings regarding physician collective negotiation and sets forth the purposes of this chapter. Art. 27.02. Authorizes competing physicians within the service area of a health plan to meet and communicate for the purpose of collectively negotiating the enumerated terms and conditions of contracts with the health plan. Requires nothing herein to be construed to allow a boycott. Art. 27.03. Prohibits competing physicians, except as provided in Article 27.04 of this chapter, to meet and communicate for the purposes of collectively negotiating the enumerated terms and conditions of contracts with health plans. Art. 27.04. Authorizes competing physicians within the service area of a health plan to collectively negotiate the terms and conditions specified in Article 27.03 where the health plans have substantial market power. Provides that substantial market power will be found where the health plan's market share exceeds 15 percent, as measured by the number of covered lives as reported by the commissioner of insurance (commissioner), or the actual number of consumers of prepaid comprehensive health services. Provides that substantial market power also exists where a health plan's market share exceeds 15 percent within a particular market segment, broken down into the following market segments: Medicare, Medicaid, commercial, managed care and HMO. Art. 27.05. Requires competing health care physicians' exercise of collective negotiation rights granted by Articles 2 and 4 of this chapter to conform to the enumerated criteria. Art. 27.06. Requires any person or organization proposing to act or acting as a representative of physicians for the purpose of exercising authority granted under this chapter to comply with the enumerated requirements. Art. 27.07. Requires the commissioner, with the advice of the attorney general, to either approve or disapprove the activity as identified in the report within 30 days of filing. Requires the commissioner, if disapproved, to furnish a written explanation of any deficiencies along with a statement of specific remedial measures as to how such deficiencies could be corrected. Provides that a representative who fails to obtain the commissioner's approval is deemed to act outside the authority granted. Art. 27.08. Provides that nothing contained in this chapter is intended to authorize competing physicians to act in concert in response to a report issued by the physicians' representative related to the representative's discussions or negotiations with health plans. Requires the representative of the physicians to advise physicians of the provisions of this section and to warn physicians of the potential for legal action against physicians who violate state or federal antitrust laws by exceeding the authority granted under this section. Art. 27.09. Requires the costs and expenses of administering this chapter to be paid by the persons or organizations proposing to act or acting as the representatives of the negotiating parties in such amount as the commission of insurance is required to certify to be just and reasonable. Requires all sums collected by the commission to be deposited in the state treasury to the credit of the Texas Department of Insurance for the administration of the chapter as established by appropriation by the legislature. SECTION 2. Effective date: September 1, 1999. SECTION 3. Emergency clause.