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.