HBA-AMW S.B. 8 77(R)BILL ANALYSIS Office of House Bill AnalysisS.B. 8 By: Cain Insurance 5/14/2001 Committee Report (Amended) BACKGROUND AND PURPOSE Currently, Texas health maintenance organizations (HMOs) and insurance companies routinely reimburse doctors and hospitals far less for female-specific surgeries and procedures than for other equivalent procedures. As a result, many women in Texas may find it difficult to get necessary medical care. Senate Bill 8 requires HMOs and insurance companies to pay doctors and hospitals equally for female-specific reproductive health and oncology services. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that rulemaking authority is expressly delegated to the Texas Board of Health, the Texas Board of Human Services, and the Texas Department of Insurance in SECTION 4 of this bill. ANALYSIS Senate Bill 8 amends the Insurance Code to establish the Omnibus Women's Equal Health Care Act (Act) to remedy unequal health care rates and payments for female-specific medical procedures by requiring that all third party payors pay providers of women's health services equal pay for equal work. The bill provides that a health benefit (plan), when reimbursing a physician or provider for reproductive health and oncology services provided to women, must pay an amount not less than the annual average compensation per hour or unit as would be paid in the service area to a physician or provider for the same medical, surgical, hospital, pharmaceutical, nursing, or other similar resources, as applicable, that would be used in providing health services exclusively to men or to the general population. The bill specifies that a plan found to be in violation of or failing to comply with the Act is subject to sanctions, including administrative penalties and also authorizes the commissioner of insurance to use emergency cease and desist procedures. The bill authorizes a person, including a health care provider, who has sustained damages resulting from a violation of the Act to bring an action in a Texas district court. The bill authorizes a plaintiff who prevails in a suit relating to a violation of the Act to obtain an order enjoining such acts or failure to act and the amount of economic damages plus court costs and attorney's fees. The bill authorizes court costs to include any reasonable and necessary expert witness fees. If the trier of fact finds that the defendant knowingly violated the provisions of the Act, the bill authorizes the court to award a civil penalty in an amount of not more than $25,000 per claimant. The bill specifies that all actions must be commenced within 12 months after the date on which the violation occurred. On a finding by the court that an action was groundless and brought in bad faith or brought for the purpose of harassment, the bill requires the court to award the defendant reasonable and necessary attorney's fees. The bill specifies that the Act does not require the issuer of a plan to provide reimbursement for an abortion or related services. The bill requires the Texas Board of Health, the Texas Board of Human Services, and the Texas Department of Insurance, not later than 90 days after the effective date of the Act, to repeal any rules contrary to the Act and to adopt rules necessary to implement the Act. The bill requires the rules to require that providers justify any disparity in reimbursement rates for provision of health care services and that any disparity accurately reflects the difference in time and resources expended to provide the health care services. EFFECTIVE DATE September 1, 2001. The act applies only to an insurance policy that is delivered, issued for delivery, or renewed on or after January 1, 2002. EXPLANATION OF AMENDMENTS Committee Amendment No. 1 provides that a health benefit plan (plan) found to be in violation of or failing to comply with the Omnibus Women's Equal Health Care Act (Act) is subject to specified sanctions. The amendment authorizes the commissioner of insurance (commissioner) to also use cease and desist procedures and to direct the plan to make complete restitution to each Texas insured or health care provider that is harmed by the violation. The amendment provides that the restitution may not be less than the amount of economic damages and may include reasonable attorney's fees incurred by a person making a complaint. The amendment authorizes the commissioner to order the greater of complete restitution or economic damages. The amendment authorizes the commissioner, in addition to imposing sanctions, to impose an administrative penalty. The commissioner is authorized, upon a finding that the plan knowingly violated the provisions of the Act, to impose an administrative penalty not to exceed $25,000 in addition to the administrative penalties authorized by current law. The amendment requires the commissioner to make a determination of a violation of the Act and to impose the appropriate sanctions within 120 days of the date a complaint alleging a violation is filed. The amendment requires the procedural requirements for administrative penalties to govern the imposition of sanctions and administrative penalties under the Act. The amendment authorizes a person, including a physician or provider, affected by an order of the commissioner regarding a violation of the Act to file an appeal in district court. The amendment specifies that the standard of judicial review is substantial evidence. If the commissioner fails to make a determination of a complaint within 120 days of the date the complaint is filed, the amendment authorizes the person who initiated the complaint to bring an action in district court for a violation of the Act. The amendment provides that the action must be commenced within 12 months after the date on which the time limit for the commissioner's determination expired. The amendment authorizes a court to impose the same or similar sanctions that the commissioner is authorized to impose, including an additional civil penalty of $25,000 if the trier of fact finds that the defendant knowingly violated the provisions of the Act. If the claimant prevails in the action, the court is also authorized to award reasonable attorney's fees and court costs, including any reasonable and necessary expert witness fees. The amendment requires the court to award the defendant reasonable and necessary attorney's fees on a finding by the court that a suit was groundless and brought in bad faith or brought for the purpose of harassment. The amendment removes provisions in the bill regarding penalties and damages.