2005 Texas Insurance Code - Not Codified CHAPTER 29. JOINT NEGOTIATIONS BY PHYSICIANS WITH HEALTH BENEFIT PLANS

INSURANCE CODE - NOT CODIFIED

CHAPTER 29. JOINT NEGOTIATIONS BY PHYSICIANS WITH HEALTH BENEFIT 
PLANS


	Art. 29.01. FINDINGS AND PURPOSES.                                             

Text of article effective until September 1, 2007
	The legislature finds that joint negotiation by competing 
physicians of certain terms and conditions of contracts with health 
plans will result in procompetitive effects in the absence of any 
express or implied threat of retaliatory joint action, such as a 
boycott or strike, by physicians.  Although the legislature finds 
that joint negotiations over fee-related terms may in some 
circumstances yield anticompetitive effects, it also recognizes 
that there are instances in which health plans dominate the market 
to such a degree that fair negotiations between physicians and the 
plan are unobtainable absent any joint action on behalf of 
physicians.  In these instances, health plans have the ability to 
virtually dictate the terms of the contracts they offer physicians.  
Consequently, the legislature finds it appropriate and necessary to 
authorize joint negotiations on fee-related and other issues where 
it determines that such imbalances exist.

Added by Acts 1999, 76th Leg., ch. 1586, Sec. 1, eff. Sept. 1, 1999.          


	Art. 29.02. DEFINITIONS.                                                       

Text of article effective until September 1, 2007
	In this chapter:                                                               
	(1)  "Health benefit plan" means a plan described by Article 
29.03 of this code.
	(2)  "Person" means an individual, association, corporation, 
or any other legal entity.
	(3)  "Physicians' representative" means a third party, 
including a member of the physicians who will engage in joint 
negotiations, who is authorized by physicians to negotiate on their 
behalf with health benefit plans over contractual terms and 
conditions affecting those physicians.

Added by Acts 1999, 76th Leg., ch. 1586, Sec. 1, eff. Sept. 1, 1999.          


	Art. 29.03. SCOPE OF CHAPTER.                                                  

Text of article effective until September 1, 2007
	(a)  This chapter applies only to a health benefit plan that 
provides benefits for medical or surgical expenses incurred as a 
result of a health condition, accident, or sickness, including an 
individual, group, blanket, or franchise insurance policy or 
insurance agreement, a group hospital service contract, or an 
individual or group evidence of coverage or similar coverage 
document that is offered by:
	(1)  an insurance company;                                                     
	(2)  a group hospital service corporation operating under 
Chapter 20 of this code;
	(3)  a fraternal benefit society operating under Chapter 10 
of this code;    
	(4)  a stipulated premium insurance company operating under 
Chapter 22 of this code;
	(5)  a reciprocal exchange operating under Chapter 19 of this 
code;          
	(6)  a health maintenance organization operating under the 
Texas Health Maintenance Organization Act (Chapter 20A, Vernon's 
Texas Insurance Code);  or
	(7)  a multiple employer welfare agreement that holds a 
certificate of authority under Article 3.95-2 of this code.
	(b)  This chapter does not apply to:                                           
	(1)  a plan that provides coverage:                                            
	(A)  only for a specified disease or other limited benefit;                    
	(B)  only for accidental death or dismemberment;                               
	(C)  for wages or payments in lieu of wages for a period 
during which an employee is absent from work because of sickness or 
injury;
	(D)  as a supplement to liability insurance;                                   
	(E)  for credit insurance;                                                     
	(F)  only for dental or vision care;                                           
	(G)  only for hospital expenses;  or                                           
	(H)  only for indemnity for hospital confinement;                              
	(2)  a small employer health benefit plan written under 
Chapter 26 of this code;
	(3)  a Medicare supplemental policy as defined by Section 
1882(g)(1), Social Security Act (42 U.S.C. Section 1395ss), as 
amended;
	(4)  workers' compensation insurance coverage;                                 
	(5)  medical payment insurance coverage issued as part of a 
motor vehicle insurance policy;  or
	(6)  a long-term care policy, including a nursing home 
indemnity policy, unless the attorney general determines that the 
policy provides benefit coverage so comprehensive that the policy 
is a health benefit plan as described by Subsection (a) of this 
article.

Added by Acts 1999, 76th Leg., ch. 1586, Sec. 1, eff. Sept. 1, 1999.          


	Art. 29.04. JOINT NEGOTIATION AUTHORIZED.                                      

Text of article effective until September 1, 2007
	Competing physicians within the service area of a health 
benefit plan may meet and communicate for the purpose of jointly 
negotiating the following terms and conditions of contracts with 
the health benefit plan:
	(1)  practices and procedures to assess and improve the 
delivery of effective, cost-efficient preventive health care 
services, including childhood immunizations, prenatal care, and 
mammograms and other cancer screening tests or procedures;
	(2)  practices and procedures to encourage early detection 
and effective, cost-efficient management of diseases and illnesses 
in children;
	(3)  practices and procedures to assess and improve the 
delivery of women's medical and health care, including menopause 
and osteoporosis;
	(4)  clinical criteria for effective, cost-efficient disease 
management programs, including diabetes, asthma, and 
cardiovascular disease;
	(5)  practices and procedures to encourage and promote 
patient education and treatment compliance, including parental 
involvement with their children's health care;
	(6)  practices and procedures to identify, correct, and 
prevent potentially fraudulent activities;
	(7)  practices and procedures for the effective, 
cost-efficient use of outpatient surgery;
	(8)  clinical practice guidelines and coverage criteria;                       
	(9)  administrative procedures, including methods and timing 
of physician payment for services;
	(10)  dispute resolution procedures relating to disputes 
between health benefit plans and physicians;
	(11)  patient referral procedures;                                             
	(12)  formulation and application of physician reimbursement 
methodology;    
	(13)  quality assurance programs;                                              
	(14)  health service utilization review procedures;                            
	(15)  health benefit plan physician selection and 
termination criteria;  and 
	(16)  the inclusion or alteration of terms and conditions to 
the extent they are the subject of government regulation 
prohibiting or requiring the particular term or condition in 
question;  provided, however, that such restriction does not limit 
physician rights to jointly petition government for a change in 
such regulation.

Added by Acts 1999, 76th Leg., ch. 1586, Sec. 1, eff. Sept. 1, 1999.          


	Art. 29.05. LIMITATIONS ON JOINT NEGOTIATION.                                  

Text of article effective until September 1, 2007
	Except as provided in Article 29.06 of this code, competing 
physicians shall not meet and communicate for the purposes of 
jointly negotiating the following terms and conditions of contracts 
with health benefit plans:
	(1)  the fees or prices for services, including those arrived 
at by applying any reimbursement methodology procedures;
	(2)  the conversion factors in a resource-based relative 
value scale reimbursement methodology or similar methodologies;
	(3)  the amount of any discount on the price of services to be 
rendered by physicians;  and
	(4)  the dollar amount of capitation or fixed payment for 
health services rendered by physicians to health benefit plan 
enrollees.

Added by Acts 1999, 76th Leg., ch. 1586, Sec. 1, eff. Sept. 1, 1999.          


	Art. 29.06. EXCEPTION TO LIMITATIONS ON JOINT NEGOTIATION.                     

Text of article effective until September 1, 2007
	(a)  Competing physicians within the service area of a health 
benefit plan may jointly negotiate the terms and conditions 
specified in Article 29.05 of this code where the health benefit 
plan has substantial market power and those terms and conditions 
have already affected or threaten to adversely affect the quality 
and availability of patient care.  The attorney general shall make 
the determination of what constitutes substantial market power.
	(b)  The department shall have the authority to collect and 
investigate information necessary to determine, on an annual basis:
	(1)  the average number of covered lives per month per county 
by every health care entity in the state;  and
	(2)  the annual impact, if any, of this article on average 
physician fees in this state.
	(c)  Subsection (a) of this article does not apply to:                         
	(1)  a Medicaid managed care plan under the Medicaid managed 
care delivery system established under Chapters 532 and 533, 
Government Code;  or
	(2)  a child health plan:                                                      
	(A)  for certain low-income children issued under the Health 
and Safety Code;  or
	(B)  designed under Section 2101, Social Security Act (42 
U.S.C. Section 1397aa).

Added by Acts 1999, 76th Leg., ch. 1586, Sec. 1, eff. Sept. 1, 1999.          


	Art. 29.07. JOINT NEGOTIATION REQUIREMENTS.                                    

Text of article effective until September 1, 2007
	Competing health care physicians' exercise of joint 
negotiation rights granted by Articles 29.04 and 29.06 of this code 
shall conform to the following criteria:
	(1)  physicians may communicate with each other with respect 
to the contractual terms and conditions to be negotiated with a 
health benefit plan;
	(2)  physicians may communicate with the third party who is 
authorized to negotiate on their behalf with health benefit plans 
over these contractual terms and conditions;
	(3)  the third party is the sole party authorized to 
negotiate with health benefit plans on behalf of the physicians as a 
group;
	(4)  at the option of each physician, the physicians may 
agree to be bound by the terms and conditions negotiated by the 
third party authorized to represent their interests;
	(5)  health benefit plans communicating or negotiating with 
the physicians' representative shall remain free to contract with 
or offer different contract terms and conditions to individual 
competing physicians;  and
	(6)  the physicians' representative shall comply with the 
provisions of Article 29.08 of this code.

Added by Acts 1999, 76th Leg., ch. 1586, Sec. 1, eff. Sept. 1, 1999.          


	Art. 29.08. REQUIREMENTS FOR PHYSICIANS' REPRESENTATIVE.                       

Text of article effective until September 1, 2007
	Any person or organization proposing to act or acting as a 
representative of physicians for the purpose of exercising 
authority granted under this chapter shall comply with the 
following requirements:
	(1)  before engaging in any joint negotiations with health 
benefit plans on behalf of physicians, the representative shall 
furnish, for the attorney general's approval, a report identifying:
	(A)  the representative's name and business address;                           
	(B)  the names and addresses of the physicians who will be 
represented by the identified representative;
	(C)  the relationship of the physicians requesting joint 
representation to the total population of physicians in a 
geographic service area;
	(D)  the health benefit plans with which the representative 
intends to negotiate on behalf of the identified physicians;
	(E)  the proposed subject matter of the negotiations or 
discussions with the identified health benefit plans;
	(F)  the representative's plan of operation and procedures 
to ensure compliance with this section;
	(G)  the expected impact of the negotiations on the quality 
of patient care;  and
	(H)  the benefits of a contract between the identified health 
benefit plan and physicians;
	(2)  after the parties identified in the initial filing have 
reached an agreement, the representative shall furnish, for the 
attorney general's approval, a copy of the proposed contract and 
plan of action;  and
	(3)  within 14 days of a health benefit plan decision 
declining negotiation, terminating negotiation, or failing to 
respond to a request for negotiation, the representative shall 
report to the attorney general the end of negotiations.  If 
negotiations resume within 60 days of such notification to the 
attorney general, the applicant shall be permitted to renew the 
previously filed report without submitting a new report for 
approval.

Added by Acts 1999, 76th Leg., ch. 1586, Sec. 1, eff. Sept. 1, 1999.          


	Art. 29.09. APPROVAL PROCESS BY ATTORNEY GENERAL.                              

Text of article effective until September 1, 2007
	(a)  The attorney general shall either approve or disapprove 
an initial filing, supplemental filing, or a proposed contract 
within 30 days of each filing.  If disapproved, the attorney general 
shall furnish a written explanation of any deficiencies along with 
a statement of specific remedial measures as to how such 
deficiencies could be corrected.  A representative who fails to 
obtain the attorney general's approval is deemed to act outside the 
authority granted under this article.
	(b)  The attorney general shall approve a request to enter 
into joint negotiations or a proposed contract if the attorney 
general determines that the applicants have demonstrated that the 
likely benefits resulting from the joint negotiation or proposed 
contract outweigh the disadvantages attributable to a reduction in 
competition that may result from the joint negotiation or proposed 
contract.  The attorney general shall consider physician 
distribution by specialty and its effect on competition.  The joint 
negotiation shall represent no more than 10 percent of the 
physicians in a health benefit plan's defined geographic service 
area except in cases where in conformance with the other provisions 
of this subsection conditions support the approval of a greater or 
lesser percentage.
	(c)  An approval of the initial filing by the attorney 
general shall be effective for all subsequent negotiations between 
the parties specified in the initial filing.
	(d)  If the attorney general does not issue a written 
approval or rejection of an initial filing, supplemental filing, or 
proposed contract within the specified time period, the applicant 
shall have the right to petition a district court for a mandamus 
order requiring the attorney general to approve or disapprove the 
contents of the filing forthwith.  The petition shall be filed in a 
district court in Travis County.

Added by Acts 1999, 76th Leg., ch. 1586, Sec. 1, eff. Sept. 1, 1999.          


	Art. 29.10. CERTAIN JOINT ACTION PROHIBITED.                                   

Text of article effective until September 1, 2007
	Nothing contained in this chapter shall be construed to 
enable physicians to jointly coordinate any cessation, reduction, 
or limitation of health care services.  Physicians may not meet and 
communicate for the purpose of jointly negotiating a requirement 
that a physician or group of physicians, as a condition of the 
physicians' or group of physicians' participation in a health 
benefit plan, must participate in all the products within the same 
health benefit plan.  Physicians may not negotiate with the plan to 
exclude, limit, or otherwise restrict non-physician health care 
providers from participation in a health benefit plan based 
substantially on the fact the health care provider is not a licensed 
physician unless that restriction, exclusion, or limitation is 
otherwise permitted by law.  The representative of the physicians 
shall advise physicians of the provisions of this article and shall 
warn physicians of the potential for legal action against 
physicians who violate state or federal antitrust laws when acting 
outside the authority of this chapter.

Added by Acts 1999, 76th Leg., ch. 1586, Sec. 1, eff. Sept. 1, 1999.          


	Art. 29.11. RULEMAKING AUTHORITY.                                              

Text of article effective until September 1, 2007
	The attorney general and the commissioner shall have the 
authority to promulgate rules necessary to implement the provisions 
of this chapter.  The attorney general and the commissioner may by 
rule authorize podiatric physicians to participate in the joint 
negotiations permitted by this chapter.

Added by Acts 1999, 76th Leg., ch. 1586, Sec. 1, eff. Sept. 1, 1999.          


	Art. 29.12. CONSTRUCTION.                                                      

Text of article effective until September 1, 2007
	This chapter shall not be construed to prohibit physicians 
from negotiating the terms and conditions of contracts as permitted 
by other state or federal law.

Added by Acts 1999, 76th Leg., ch. 1586, Sec. 1, eff. Sept. 1, 1999.          


	Art. 29.13. FEES.                                                              

Text of article effective until September 1, 2007
	Each person who acts as the representative of negotiating 
parties under this chapter shall pay to the department a fee to act 
as a representative.  The attorney general, by rule, shall set fees 
in amounts reasonable and necessary to cover the costs incurred by 
the state in administering this chapter.  A fee collected under this 
article shall be deposited in the state treasury to the credit of 
the operating fund from which the expense was incurred.

Added by Acts 1999, 76th Leg., ch. 1586, Sec. 1, eff. Sept. 1, 1999.          


	Art. 29.14. EXPIRATION.  This chapter expires September 1, 
2007.             

Added by Acts 1999, 76th Leg., ch. 1586, Sec. 1, eff. Sept. 1, 1999. 
Amended by Acts 2003, 78th Leg., ch. 60, Sec. 1, eff. May 15, 2003.