By: Kolkhorst S.B. No. 884
(In the Senate - Filed January 23, 2025; February 13, 2025,
read first time and referred to Committee on Health & Human
Services; April 14, 2025, reported adversely, with favorable
Committee Substitute by the following vote: Yeas 9, Nays 0;
April 14, 2025, sent to printer.)
Click here to see the committee vote
COMMITTEE SUBSTITUTE FOR S.B. No. 884 By: Kolkhorst
A BILL TO BE ENTITLED
AN ACT
relating to establishment of a shared savings program for health
maintenance organizations and preferred provider benefit plans.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subtitle C, Title 8, Insurance Code, is amended
by adding Chapter 1276 to read as follows:
CHAPTER 1276. SHARED SAVINGS PROGRAM
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 1276.001. DEFINITIONS. In this chapter:
(1) "Direct pay provider" means a health care provider
of any health care service or supply that will accept direct payment
for a health care service or supply from a patient instead of
processing a claim for payment for the service or supply through the
patient's health care plan or preferred provider benefit plan.
(2) "Health care provider" means a health care
practitioner or health care facility that provides health care
services or supplies under a license, certificate, registration, or
similar authorization issued by this state.
(3) "Program" means a shared savings program
established under this chapter.
Sec. 1276.002. APPLICABILITY OF CHAPTER. This chapter
applies only to medically necessary nonemergency health care
services or supplies covered under:
(1) a health care plan provided by a health
maintenance organization operating under Chapter 843; or
(2) a preferred provider benefit plan provided under
Chapter 1301.
Sec. 1276.003. RULES. The commissioner may adopt rules
necessary to implement this chapter.
SUBCHAPTER B. PROGRAM REQUIREMENTS
Sec. 1276.051. PROGRAM REQUIRED. (a) A health maintenance
organization or insurer to which this chapter applies shall
establish a shared savings program in accordance with this chapter.
(b) A health maintenance organization or insurer shall
provide written notice to its enrollees or insureds of the program.
(c) An insurer may not require a different procedure for an
insured to claim a shared savings incentive payment under this
chapter than the procedures established by the insurer under
Section 1301.140.
Sec. 1276.052. AVERAGE CONTRACTED RATE DISCLOSURE. (a) As
part of the program, a health maintenance organization or insurer
shall establish a publicly available Internet website for any
person to view the average contracted rate paid by the health
maintenance organization or insurer under a health care plan or
preferred provider benefit plan to a health care provider in the
plan's provider network for a particular health care service or
supply in the preceding 12 months. The health maintenance
organization or insurer shall update the average contracted rate at
least once per month.
(b) As part of the program, a health maintenance
organization or insurer shall establish and operate a toll-free
telephone number for an enrollee or insured to request disclosure
of the average contracted rate paid under the enrollee's health
care plan or the insured's preferred provider benefit plan to a
health care provider in the plan's provider network for a
particular health care service or supply in the preceding 12
months.
(c) An insurer may use a system described by Subsection (a)
or (b) for the purposes of Section 1301.140.
(d) A health maintenance organization or insurer shall
disclose to the enrollee or insured the rate the enrollee or insured
requested under Subsection (b).
Sec. 1276.053. PARTICIPATION USING DIRECT PAY PROVIDER.
(a) For purposes of enrollee or insured eligibility for a shared
savings incentive payment under Section 1276.054, a health care
provider may be considered a direct pay provider if the health care
provider:
(1) publishes the final price that the provider would
accept for a health care service or supply eligible under a program
for each of the 100 most common nonemergency health care services or
supplies offered by the provider and that reflects the enrollee's
or insured's final out-of-pocket cost for the service or supply; or
(2) provides an enrollee or insured on request a
direct pay price with a written estimate of the final charge for a
proposed health care service or supply eligible under the
enrollee's or insured's program that includes prices for all
services or supplies associated with the proposed service or supply
and that reflects the enrollee's or insured's final out-of-pocket
cost associated with the proposed service or supply.
(b) A facility to which Chapter 324, Health and Safety Code,
applies that provides an estimate of the facility's charges for a
proposed service in accordance with Section 324.101(d), Health and
Safety Code, satisfies Subsection (a)(2) with respect to that
service.
(c) An enrollee or insured may request a direct pay price
described by Subsection (a)(2) from any health care provider,
regardless of whether the provider has published the information
described by Subsection (a)(1), and the enrollee's or insured's
decision to obtain a health care service or supply from that
provider does not affect the enrollee's or insured's eligibility
for a shared savings incentive payment under the enrollee's or
insured's program.
(d) A direct pay provider may provide assistance to an
enrollee or insured in filing paperwork or providing proof of care
or medical necessity in connection with the enrollee's or insured's
claim for reimbursement or a shared savings incentive payment under
this chapter.
Sec. 1276.054. SHARED SAVINGS INCENTIVE PAYMENT. (a) An
enrollee or insured who elects and receives a medically necessary
and covered health care service or supply from a direct pay provider
and pays an actual price less than the rate disclosed by the
enrollee's health maintenance organization or the insured's insurer
under Section 1276.052 is eligible for a shared savings incentive
payment under the enrollee's or insured's program.
(b) Except as provided by Subsection (c), a health
maintenance organization or insurer shall pay to an eligible
enrollee or insured a shared savings incentive payment equal to 50
percent of the difference between the disclosed rate and the actual
price paid to the direct pay provider, minus any applicable
deductible, copayment, or coinsurance.
(c) A health maintenance organization or insurer is not
required to pay an enrollee or insured a shared savings incentive
payment under Subsection (b) if:
(1) the amount of the shared savings incentive payment
would be less than $50; or
(2) both:
(A) the enrollee's or insured's total shared
savings incentive payments for the plan year exceed the greater of:
(i) $20,000; or
(ii) the enrollee's or insured's
deductibles and out-of-pocket maximum; and
(B) the health maintenance organization or
insurer has provided written notice to the enrollee or insured that
the enrollee or insured is not eligible for a shared savings
incentive payment for the remainder of the plan year.
(d) A health maintenance organization or insurer shall pay
an enrollee or insured under Subsection (b) not later than the 30th
day after the date on which the enrollee or insured submits a
program claim.
(e) A health maintenance organization or insurer may pay a
shared savings incentive payment through a cash payment or other
incentive or combination of incentives, including:
(1) a gift card;
(2) a deposit into a health reimbursement arrangement
or savings account;
(3) a premium reduction or rebate; and
(4) a cost-sharing reduction.
Sec. 1276.055. COST SHARING UNDER PROGRAM FOR PREFERRED
PROVIDER BENEFIT PLAN. (a) This section applies only to a
medically necessary health care service or supply that:
(1) is covered under a preferred provider benefit
plan; and
(2) an insured receives from a direct pay provider for
an amount that is less than the average contracted rate disclosed by
the insured's insurer under Section 1276.052.
(b) An insurer shall comply with the requirements of Section
1301.140 to ensure that cost-sharing amounts paid by an insured for
a service or supply described by Subsection (a) are counted toward
the insured's in-network cost-sharing limits.
Sec. 1276.056. ACCOUNTING AND ADMINISTRATION FOR HEALTH
MAINTENANCE ORGANIZATION OR INSURER. (a) If required by the
federal government, a health maintenance organization or insurer
that pays total shared savings incentive payments in excess of $600
to an enrollee or insured during a calendar year shall issue to the
enrollee or insured an Internal Revenue Service Form 1099 not later
than January 31 of the following year.
(b) A health maintenance organization or insurer that pays
shared savings incentive payments under this chapter may apply to
the United States Department of Health and Human Services to
include the payments as incurred claims under 45 C.F.R. Section
158.221(b)(8).
Sec. 1276.057. LIABILITY FOR UNFORESEEN CHARGE OVER
ESTIMATE. If the final charge for the health care service or supply
described by Section 1276.055(a) is an amount greater than the
amount estimated under Section 1276.053 due to unforeseen
circumstances, the enrollee or insured is liable for the difference
only if:
(1) before the enrollee or insured is billed, the
enrollee or insured agrees in writing to pay the additional amount;
and
(2) before receiving the service or supply, the
enrollee or insured receives written notice that the enrollee or
insured may be liable for charges resulting from unforeseen
circumstances.
SECTION 2. Chapter 1276, Insurance Code, as added by this
Act, applies only to a health care plan or insurance policy
delivered, issued for delivery, or renewed on or after January 1,
2026.
SECTION 3. This Act takes effect September 1, 2025.
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