85R23635 SMT-F     By: Gooden H.B. No. 3124     Substitute the following for H.B. No. 3124:     By:  Phillips C.S.H.B. No. 3124       A BILL TO BE ENTITLED   AN ACT   relating to certain physician-specific comparison data compiled by   a health benefit plan issuer, including the release of that data to   physicians participating in certain physician-led organizations.          BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:          SECTION 1.  The heading to Chapter 1460, Insurance Code, is   amended to read as follows:   CHAPTER 1460. [STANDARDS REQUIRED REGARDING] CERTAIN PHYSICIAN   RANKINGS AND COST COMPARISONS BY HEALTH BENEFIT PLANS          SECTION 2.  Chapter 1460, Insurance Code, is amended by   designating Sections 1460.001 and 1460.002 as Subchapter A and   adding a subchapter heading to read as follows:   SUBCHAPTER A.  GENERAL PROVISIONS          SECTION 3.  Section 1460.001, Insurance Code, is amended to   read as follows:          Sec. 1460.001.  DEFINITIONS. In this chapter:                (1)  "Accountable care organization" means an entity:                      (A)  that is composed of physicians or physicians   and other health care providers;                      (B)  that is owned and controlled by one or more   physicians licensed in this state and engaged in active clinical   practice in this state;                      (C)  that contracts with a health benefit plan   issuer to provide medical or health care services to a defined   population;                      (D)  that uses a payment structure that takes into   account the total costs and quality of the care provided to the   defined population served by the entity; and                      (E)  through which physicians and health care   providers, if any:                            (i)  share in savings created by improvement   of the quality of, and reduction of cost increases for, care   delivered to the defined population served by the entity; or                            (ii)  are compensated through another   payment methodology intended to reduce the total cost of care   delivered to the defined population served by the entity.                (2)  "Cost comparison data" means information compiled   by a health benefit plan issuer to show the health care costs   associated with a physician or other health care provider relative   to another physician or health care provider.                (3)  "Designated entity" means a limited liability   company in which a majority ownership interest is held by an   incorporated association whose purpose includes uniting in one   organization all physicians licensed to practice medicine in this   state and that has been in continued existence for at least 15   years.                (4)  "Health benefit plan issuer" means an entity   authorized under this code or another insurance law of this state   that provides health insurance or health benefits in this state,   including:                      (A)  an insurance company;                      (B)  a group hospital service corporation   operating under Chapter 842;                      (C)  a health maintenance organization operating   under Chapter 843; and                      (D)  a stipulated premium company operating under   Chapter 884.                (5)  "Participating physician" means a physician who   participates in an accountable care organization.                (6) [(2)]  "Physician" means an individual licensed to   practice medicine in this state or another state of the United   States.          SECTION 4.  Chapter 1460, Insurance Code, is amended by   designating Sections 1460.003 through 1460.007 as Subchapter B and   adding a subchapter heading to read as follows:   SUBCHAPTER B.  PHYSICIAN RANKINGS          SECTION 5.  Section 1460.003(a), Insurance Code, is amended   to read as follows:          (a)  Except as provided by Subchapter C, a [A]  health   benefit plan issuer, including a subsidiary or affiliate, may not   rank physicians, classify physicians into tiers based on   performance, or publish physician-specific information that   includes rankings, tiers, ratings, or other comparisons of a   physician's performance against standards, measures, or other   physicians, unless:                (1)  the standards used by the health benefit plan   issuer conform to nationally recognized standards and guidelines as   required by rules adopted under Section 1460.005;                (2)  the standards and measurements to be used by the   health benefit plan issuer are disclosed to each affected physician   before any evaluation period used by the health benefit plan   issuer; and                (3)  each affected physician is afforded, before any   publication or other public dissemination, an opportunity to   dispute the ranking or classification through a process that, at a   minimum, includes due process protections that conform to the   following protections:                      (A)  the health benefit plan issuer provides at   least 45 days' written notice to the physician of the proposed   rating, ranking, tiering, or comparison, including the   methodologies, data, and all other information utilized by the   health benefit plan issuer in its rating, tiering, ranking, or   comparison decision;                      (B)  in addition to any written fair   reconsideration process, the health benefit plan issuer, upon a   request for review that is made within 30 days of receiving the   notice under Paragraph (A), provides a fair reconsideration   proceeding, at the physician's option:                            (i)  by teleconference, at an agreed upon   time; or                            (ii)  in person, at an agreed upon time or   between the hours of 8:00 a.m. and 5:00 p.m. Monday through Friday;                      (C)  the physician has the right to provide   information at a requested fair reconsideration proceeding for   determination by a decision-maker, have a representative   participate in the fair reconsideration proceeding, and submit a   written statement at the conclusion of the fair reconsideration   proceeding; and                      (D)  the health benefit plan issuer provides a   written communication of the outcome of a fair reconsideration   proceeding prior to any publication or dissemination of the rating,   ranking, tiering, or comparison.  The written communication must   include the specific reasons for the final decision.          SECTION 6.  Section 1460.005(a), Insurance Code, is amended   to read as follows:          (a)  The commissioner shall adopt rules as necessary to   implement this subchapter [chapter].          SECTION 7.  Sections 1460.006 and 1460.007, Insurance Code,   are amended to read as follows:          Sec. 1460.006.  DUTIES OF HEALTH BENEFIT PLAN ISSUER. A   health benefit plan issuer shall ensure that:                (1)  physicians currently in clinical practice are   actively involved in the development of the standards used under   this subchapter [chapter]; and                (2)  the measures and methodology used in the   comparison programs described by Section 1460.003 are transparent   and valid.          Sec. 1460.007.  SANCTIONS; DISCIPLINARY ACTIONS. (a) A   health benefit plan issuer that violates this subchapter [chapter]   or a rule adopted under this subchapter [chapter] is subject to   sanctions and disciplinary actions under Chapters 82 and 84.          (b)  A violation of this subchapter [chapter] by a physician   constitutes grounds for disciplinary action by the Texas Medical   Board, including imposition of an administrative penalty.          SECTION 8.  Chapter 1460, Insurance Code, is amended by   adding Subchapter C to read as follows:   SUBCHAPTER C.  COST COMPARISON DATA          Sec. 1460.051.  PROVISION OF COST COMPARISON DATA   AUTHORIZED. Notwithstanding Section 1460.003, a health benefit   plan issuer may provide cost comparison data to a participating   physician or a designated entity.          Sec. 1460.052.  PROVISION OF CERTAIN COST COMPARISON DATA   REQUIRED. If cost comparison data associated with health care   providers other than physicians is available to a health benefit   plan issuer that provides cost comparison data under Section   1460.051, the plan issuer shall provide the cost comparison data   associated with the other health care providers.          Sec. 1460.053.  REQUIRED DISCLOSURES. Not later than the   15th business day after the date that a health benefit plan issuer   receives a request from a participating physician, the health   benefit plan issuer shall disclose to the physician:                (1)  the cost comparison data associated with the   physician;                (2)  the measures and methodology used to compare   costs; and                (3)  any other information considered in making the   cost comparison.          Sec. 1460.054.  RIGHT TO DISPUTE. (a)  A health benefit plan   issuer shall give a physician, regardless of whether the physician   is a participating physician, a fair opportunity to dispute the   cost comparison data associated with the physician at least once   each calendar quarter and when the health benefit plan issuer   changes the measures and methodology described by Section 1460.053.          (b)  A physician may initiate a dispute by sending to the   health benefit plan issuer a written statement of the dispute.          Sec. 1460.055.  DISPUTE PROCEEDING. (a)  Not later than the   15th business day after the date a health benefit plan issuer   receives a statement of the dispute under Section 1460.054, the   plan issuer shall provide the cost comparison data associated with   the physician, the measures and methodology used to compare costs,   and any other information considered in making the cost comparison,   unless the information was already provided under Section 1460.052.          (b)  In addition to any written fair reconsideration   process, the health benefit plan issuer shall provide a cost   comparison data dispute proceeding, at the physician's option:                (1)  by teleconference, at an agreed upon time; or                (2)  in person, at an agreed upon time.          (c)  At the proceeding described by Subsection (b), the   physician has the right to:                (1)  provide information to a decision-maker;                (2)  have a representative participate in the   proceeding; and                (3)  submit a written statement at the conclusion of   the proceeding.          (d)  The health benefit plan issuer shall provide to the   physician who initiated the dispute process under Section 1460.054   a written communication of the outcome of the proceeding not later   than the 60th day after the date the physician initiated the dispute   process.  The written communication must include the specific   reasons for the final decision.          Sec. 1460.056.  CORRECTIONS REQUIRED. If in a dispute   process initiated under Section 1460.054 the health benefit plan   issuer determines that the physician's cost comparison data is   inaccurate or the measures and methodology used to compare costs   are invalid, the health benefit plan issuer shall promptly correct   the data or update the measures and methodology and associated   data, as applicable.          Sec. 1460.057.  MEASURES AND METHODOLOGY. The measures and   methodology used to compare costs under this subchapter must use   risk and severity adjustments to account for health status   differences among different patient populations.          Sec. 1460.058.  NOTICE REQUIRED. A health benefit plan   issuer shall provide written notice to a physician who contracts   with the plan issuer that:                (1)  explains the plan issuer's compilation and use of   cost comparison data, the purpose and scope of the plan issuer's   release of cost comparison data under this subchapter, and the   requirements of this subchapter regarding cost comparison data; and                (2)  informs the physician of the physician's rights   and duties under this subchapter.          Sec. 1460.059.  CONFIDENTIALITY. A physician who receives   cost comparison data about another physician under this subchapter   may not disclose the data to any other person, except for the   purpose of:                (1)  managing an accountable care organization;                (2)  managing the receiving physician's practice or   referrals;                (3)  evaluating or disputing the cost comparison data   associated with the receiving physician;                (4)  obtaining professional advice related to a legal   claim; or                (5)  reporting, complaining, or responding to a   governmental agency.          Sec. 1460.060.  CONSTRUCTION OF SUBCHAPTER. Nothing in this   subchapter may be construed to authorize:                (1)  the disclosure of a contract rate; or                (2)  the publication of cost comparison data to a   person other than a participating physician or a designated   entity.          Sec. 1460.061.  RULES. The commissioner shall adopt rules   as necessary to implement this subchapter.          Sec. 1460.062.  DUTIES OF HEALTH BENEFIT PLAN ISSUER. A   health benefit plan issuer shall ensure that:                (1)  physicians currently in clinical practice are   actively involved in the development of the standards used under   this subchapter; and                (2)  the measures and methodology used in the   development of cost comparison data described by this subchapter   are transparent and valid.          Sec. 1460.063.  SANCTIONS; DISCIPLINARY ACTIONS. (a) A   health benefit plan issuer that violates this subchapter or a rule   adopted under this subchapter is subject to sanctions and   disciplinary actions under Chapters 82 and 84.          (b)  A violation of this subchapter by a physician   constitutes grounds for disciplinary action by the Texas Medical   Board, including imposition of an administrative penalty.          SECTION 9.  The change in law made by this Act applies only   to a contract between a physician and a health benefit plan issuer   entered into or renewed on or after September 1, 2017. A contract   between a physician and health benefit plan issuer entered into or   renewed before September 1, 2017, is governed by the law as it   existed immediately before that date, and that law is continued in   effect for that purpose.          SECTION 10.  This Act takes effect September 1, 2017.