Office of the Attorney General News Release Archive



Wednesday, May 17, 2000

CORNYN ANNOUNCES PHYSICIAN NEGOTIATION RULES

AUSTIN - Texas Attorney General John Cornyn today announced that the final physician negotiation rules have been sent to the Texas Register. Last session, the Legislature passed SB 1468 which assigned the Attorney General's office responsibility for writing and implementing rules that establish procedures to permit physicians to jointly negotiate with immunity from antitrust laws.

"My office has conducted a thorough and open rulemaking process providing multiple opportunities for interested parties to present their ideas. We considered numerous comments and concerns and made significant modifications before publishing these rules," said Attorney General Cornyn.

"This law is the first of its kind in the nation, my goal was to formulate rules that could withstand a court challenge. If the rules are not thorough and complete, the entire law could be struck down in court," said Attorney General Cornyn.

The new law allows competing physicians to meet together, discuss and negotiate certain issues with health plans if they first obtain certain approvals from the Attorney General's office. To receive approval, the physicians must disclose to the Attorney General their current health plan contracts and information about each group's business. Joint negotiations with health plans by independent doctors is typically prohibited by federal antitrust law because it could reduce market competition, but if physicians abide by the terms of this law, the statute provides immunity from antitrust challenges.

"While I am determined to issue rules that are no more burdensome than necessary, my goals are to protect consumers from increases in health costs and to give physicians who receive approval to engage in joint negotiations a reasonable degree of certainty that they will have antitrust immunity," said Attorney General Cornyn.

The proposed rules were first published in the Texas Register on Nov. 19, 1999. On Dec. 15, the Attorney General's office held a public hearing and extended the public comment period on the proposed rules to Jan. 19, 2000. Over this period of time, 50 different individuals and organizations submitted comments, and many of these comments were incorporated into the final rules.

The final rules will be published by the Texas Register on June 2 and become effective on June 6.

The Attorney General's office estimates that 112 groups will apply each year with most requesting permission to negotiate fees. Once they are approved the group may negotiate with the health plans on contracts--particularly over details such as fees, rules on patient referrals, the decision to prescribe brand name drugs instead of generics, the appeals system for denied treatments and the control of patient medical records, among other issues.

The final rules are available on the Attorney General's web site at www.oag.state.tx.us on the What's New page.

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Contact Mark Heckmann, Heather Browne, or Tom Kelley at (512) 463-2050