BILL ANALYSIS Senate Research Center C.S.S.B. 926 89R23578 DNC-F By: Hancock Health & Human Services 4/10/2025 Committee Report (Substituted) AUTHOR'S / SPONSOR'S STATEMENT OF INTENT Currently, the Insurance Code prevents health insurance options that encourage patients to be smart shoppers. Texas employers would like to be able to utilize health insurance plans for their employees that not only share basic information about physician costs but also how they meet nationally recognized quality of care standards. If they are able to use these types of flexible plans, employers and employee patients have been health care costs lower by five percent. Health care price transparency is rapidly advancing, yet patients still lack incentives to shop for lower cost, higher quality, health care services, and providers. S.B. 926 modernizes the code to allow health benefits that incentivize patients to make value driven health care decisions. Analysis Section 1 Adds Section 843.322 to Chapter 843, Insurance Code to allow an HMO to provide incentives to enrollees to use certain providers through modified deductibles, copayments, coinsurance, or other cost-sharing provisions. Creates a fiduciary duty to engage in the conduct only for the benefit of the enrollee or group contract holder. Section 2 Amends Section 1301.0045. Clarifies that newly added Section 1301.0047 is an exception to that law. Section 3 Adds Section 1301.0047 to Chapter 1301, Insurance Code. Allows EPO/PPO plans to provide incentives to enrollees to use certain providers through modified deductibles, copayments, or coinsurance. Creates a fiduciary duty to engage in the conduct only for the benefit of the enrollee or group contract holder. Section 4 Amends Section 1460.003 so that TDI can develop rules for health insurance plans to rank or classify physicians using an organization designated by the commissioner. Section 5 Amends Section 1460.005(c) to require TDI to adopt national standards that insurers may use for physician rankings to ensure that they are unbiased towards or against any medical provider; use standards that are nationally recognized, evidence-based, have transparent methodology, and are risk-adjusted; and have an easy-to-use process by which a provider may report data or mathematical errors. Section 6 The Act takes effect September 1, 2025. Summary of Changes from as-filed: Clarifies that incentives may not be offered for an enrollee to visit a provider solely because the provider is affiliated with the insurer. Places into statute examples of a violation of a fiduciary duty taken from current TDI rule. Adds to the list of elements an insurer must disclose to a physician prior to publication of a ranking: the quality standards used and the methodology of the ranking. Provides different criteria on which a physician may challenge the ranking pre-publication and post-publication. Pre-publication a broader set of challenges may be made to ensure the quality and utility of the rankings. Post-publication, challenge may only be made on grounds that the information is objectively false. Refines the criteria for which national entities can qualify to be selected by the commissioner as an allowable quality standards propagating organization, and clarifies that national medical specialty society would be eligible. Includes stronger enforcement for violations by insurers, to provide that the commissioner shall prohibit insurers from using rankings or incentives for a pattern of violations. C.S.S.B. 926 amends current law relating to certain practices of health benefit plan issuers to encourage the use of certain physicians and health care providers and rank physicians. RULEMAKING AUTHORITY Rulemaking authority previously granted to the commissioner of insurance is modified in SECTION 5 (Section 1460.005, Insurance Code) of this bill. SECTION BY SECTION ANALYSIS SECTION 1. Amends Subchapter I, Chapter 843, Insurance Code, by adding Section 843.322, as follows: Sec. 843.322. INCENTIVES TO USE CERTAIN PHYSICIANS OR PROVIDERS. (a) Authorizes a health maintenance organization (HMO) to provide incentives for enrollees to use certain physicians or providers through modified deductibles, copayments, coinsurance, or other cost-sharing provisions. (b) Provides that an HMO that encourages an enrollee to obtain a health care service from a particular physician or provider, including offering incentives to encourage enrollees to use specific physicians or providers, or that introduces or modifies a tiered network plan or assigns physicians or providers into tiers, has a fiduciary duty to the enrollee or group contract holder to engage in that conduct only for the primary benefit of the enrollee or group contract holder. (c) Provides that an HMO violates the fiduciary duty described by Subsection (b) by offering incentives to encourage enrollees to use a particular physician or provider solely because the physician or provider directly or indirectly through one or more intermediaries controls, is controlled by, or is under common control with the HMO. (d) Provides that conduct that violates the fiduciary duty described by Subsection (b) includes using a steering approach or a tiered network to provide a financial incentive as an inducement to limit medically necessary services, encourage receipt of lower quality medically necessary services, or violate state or federal law; failing to implement reasonable procedures to ensure that certain criteria are met; and failing to use objective, verifiable, and accurate information as the basis of any encouragement or incentive under this section. SECTION 2. Amends Section 1301.0045(a), Insurance Code, to prohibit Chapter 1301 (Preferred Provider Benefit Plans), except as provided by Sections 1301.0046 (Coinsurance Requirements for Services of Nonpreferred Providers) and 1301.0047, from being construed to limit the level of reimbursement or the level of coverage, including deductibles, copayments, coinsurance, or other cost-sharing provisions, that are applicable to preferred providers or, for plans other than exclusive provider benefit plans, nonpreferred providers, and to make a nonsubstantive change. SECTION 3. Amends Subchapter A, Chapter 1301, Insurance Code, by adding Section 1301.0047, as follows: Sec. 1301.0047. INCENTIVES TO USE CERTAIN PHYSICIANS OR HEALTH CARE PROVIDERS. (a) Authorizes an insurer to provide incentives for insureds to use certain physicians or health care providers through modified deductibles, copayments, coinsurance, or other cost-sharing provisions. (b) Provides that an insurer that encourages an insured to obtain a health care service from a particular physician or health care provider, including offering incentives to encourage insureds to use specific physicians or providers, or that introduces or modifies a tiered network plan or assigns physicians or providers into tiers, has a fiduciary duty to the insured or policyholder to engage in that conduct only for the primary benefit of the insured or policyholder. (c) Provides that an insurer violates the fiduciary duty described by Subsection (b) by offering incentives to encourage insureds to use a particular physician or health care provider solely because the physician or provider directly or indirectly through one or more intermediaries controls, is controlled by, or is under common control with the insurer. (d) Provides that conduct that violates the fiduciary duty described by Subsection (b) includes using a steering approach or a tiered network to provide a financial incentive as an inducement to limit medically necessary services, encourage receipt of lower quality medically necessary services, or violate state or federal law, failing to implement reasonable procedures to ensure that certain criteria are met, and failing to use objective, verifiable, and accurate information as the basis of any encouragement or incentive under this section. SECTION 4. Amends Section 1460.003, Insurance Code, by amending Subsection (a) and adding Subsection (a-1), as follows: (a) Prohibits a health benefit plan issuer, including a subsidiary or affiliate, from ranking physicians or classifying physicians into tiers based on performance unless: (1) the standards used by the health benefit plan issuer to rank or classify are developed or prescribed by an organization designated by the commissioner of insurance (commissioner) through rules adopted under Section 1460.005 (Rules; Standards); (2) the ranking or classification and any methodology used to rank or classify meet certain criteria; and (3) each affected physician is given an easy-to-use process to identify: (A) before the release, publication, or distribution of the ranking or classification, any discrepancy between the standards and the ranking or classification proposed by the health benefit plan issuer; and (B) after the release, publication, or distribution of the ranking or classification, any objectively and verifiably false information contained in the ranking or classification. Deletes existing text prohibiting a health benefit plan issuer, including a subsidiary or affiliate, from publishing physician-specific information that includes rankings, tiers, ratings, or other comparisons of a physician's performance against standards, measures, or other physicians, unless certain criteria are met. (a-1) Requires a health benefit plan issuer, if a physician submits information under Subsection (a)(3) sufficient to establish a verifiable discrepancy or objectively and verifiably false information contained in the ranking or classification or a violation of Chapter 1460 (Standards Required Regarding Certain Physician Rankings by Health Benefit Plans), to remedy the discrepancy, false information, or violation by the later of certain dates. SECTION 5. Amends Section 1460.005, Insurance Code, by amending Subsection (c) and adding Subsection (d), as follows: (c) Provides that, in adopting rules under this section for purposes of Section 1460.003(a)(1), the commissioner is authorized to only designate an organization that meets the following requirements: (1) the organization is a national medical specialty society or a bona fide organization that is unbiased toward or against any medical provider or health benefit plan issuer; and (2) the standards developed or prescribed by the organization that are to be used in rankings or classifications meet certain criteria. Deletes existing text requiring the commissioner, in adopting rules under this section, to consider the standards, guidelines, and measures prescribed by nationally recognized organizations that establish or promote guidelines and performance measures emphasizing quality of health care, including the National Quality Forum and the AQA Alliance. Deletes existing text requiring the commissioner, if neither the National Quality Forum nor the AQA Alliance has established standards or guidelines regarding an issue, to consider the standards, guidelines, and measures prescribed by the National Committee on Quality Assurance and other similar national organizations. Deletes existing text requiring the commissioner, if neither the National Quality Forum, nor the AQA Alliance, nor other national organizations have established standards or guidelines regarding an issue, to consider standards, guidelines, and measures based on other bona fide nationally recognized guidelines, expert-based physician consensus quality standards, or leading objective clinical evidence and scholarship. (d) Defines "national medical specialty society." SECTION 6. Amends Section 1460.007, Insurance Code, by adding Subsection (c) to require the commissioner to prohibit a health benefit plan issuer from using a ranking or classification system otherwise authorized under this chapter for not less than 12 consecutive months if the commissioner determines that the health benefit plan issuer has engaged in a pattern of discrepancies, falsehoods, or violations described by Section 1460.003(a-1). SECTION 7. Effective date: September 1, 2025.
BILL ANALYSIS
Senate Research Center C.S.S.B. 926
89R23578 DNC-F By: Hancock
Health & Human Services
4/10/2025
Committee Report (Substituted)
Senate Research Center
C.S.S.B. 926
89R23578 DNC-F
By: Hancock
Health & Human Services
4/10/2025
Committee Report (Substituted)
AUTHOR'S / SPONSOR'S STATEMENT OF INTENT
Currently, the Insurance Code prevents health insurance options that encourage patients to be smart shoppers.
Texas employers would like to be able to utilize health insurance plans for their employees that not only share basic information about physician costs but also how they meet nationally recognized quality of care standards. If they are able to use these types of flexible plans, employers and employee patients have been health care costs lower by five percent.
Health care price transparency is rapidly advancing, yet patients still lack incentives to shop for lower cost, higher quality, health care services, and providers.
S.B. 926 modernizes the code to allow health benefits that incentivize patients to make value driven health care decisions.
Analysis
Section 1 Adds Section 843.322 to Chapter 843, Insurance Code to allow an HMO to provide incentives to enrollees to use certain providers through modified deductibles, copayments, coinsurance, or other cost-sharing provisions. Creates a fiduciary duty to engage in the conduct only for the benefit of the enrollee or group contract holder.
Section 2 Amends Section 1301.0045. Clarifies that newly added Section 1301.0047 is an exception to that law.
Section 3 Adds Section 1301.0047 to Chapter 1301, Insurance Code. Allows EPO/PPO plans to provide incentives to enrollees to use certain providers through modified deductibles, copayments, or coinsurance. Creates a fiduciary duty to engage in the conduct only for the benefit of the enrollee or group contract holder.
Section 4 Amends Section 1460.003 so that TDI can develop rules for health insurance plans to rank or classify physicians using an organization designated by the commissioner.
Section 5 Amends Section 1460.005(c) to require TDI to adopt national standards that insurers may use for physician rankings to ensure that they are unbiased towards or against any medical provider; use standards that are nationally recognized, evidence-based, have transparent methodology, and are risk-adjusted; and have an easy-to-use process by which a provider may report data or mathematical errors.
Section 6 The Act takes effect September 1, 2025.
Summary of Changes from as-filed:
* Clarifies that incentives may not be offered for an enrollee to visit a provider solely because the provider is affiliated with the insurer.
* Places into statute examples of a violation of a fiduciary duty taken from current TDI rule.
* Adds to the list of elements an insurer must disclose to a physician prior to publication of a ranking: the quality standards used and the methodology of the ranking.
* Provides different criteria on which a physician may challenge the ranking pre-publication and post-publication. Pre-publication a broader set of challenges may be made to ensure the quality and utility of the rankings. Post-publication, challenge may only be made on grounds that the information is objectively false.
* Refines the criteria for which national entities can qualify to be selected by the commissioner as an allowable quality standards propagating organization, and clarifies that national medical specialty society would be eligible.
* Includes stronger enforcement for violations by insurers, to provide that the commissioner shall prohibit insurers from using rankings or incentives for a pattern of violations.
C.S.S.B. 926 amends current law relating to certain practices of health benefit plan issuers to encourage the use of certain physicians and health care providers and rank physicians.
RULEMAKING AUTHORITY
Rulemaking authority previously granted to the commissioner of insurance is modified in SECTION 5 (Section 1460.005, Insurance Code) of this bill.
SECTION BY SECTION ANALYSIS
SECTION 1. Amends Subchapter I, Chapter 843, Insurance Code, by adding Section 843.322, as follows:
Sec. 843.322. INCENTIVES TO USE CERTAIN PHYSICIANS OR PROVIDERS. (a) Authorizes a health maintenance organization (HMO) to provide incentives for enrollees to use certain physicians or providers through modified deductibles, copayments, coinsurance, or other cost-sharing provisions.
(b) Provides that an HMO that encourages an enrollee to obtain a health care service from a particular physician or provider, including offering incentives to encourage enrollees to use specific physicians or providers, or that introduces or modifies a tiered network plan or assigns physicians or providers into tiers, has a fiduciary duty to the enrollee or group contract holder to engage in that conduct only for the primary benefit of the enrollee or group contract holder.
(c) Provides that an HMO violates the fiduciary duty described by Subsection (b) by offering incentives to encourage enrollees to use a particular physician or provider solely because the physician or provider directly or indirectly through one or more intermediaries controls, is controlled by, or is under common control with the HMO.
(d) Provides that conduct that violates the fiduciary duty described by Subsection (b) includes using a steering approach or a tiered network to provide a financial incentive as an inducement to limit medically necessary services, encourage receipt of lower quality medically necessary services, or violate state or federal law; failing to implement reasonable procedures to ensure that certain criteria are met; and failing to use objective, verifiable, and accurate information as the basis of any encouragement or incentive under this section.
SECTION 2. Amends Section 1301.0045(a), Insurance Code, to prohibit Chapter 1301 (Preferred Provider Benefit Plans), except as provided by Sections 1301.0046 (Coinsurance Requirements for Services of Nonpreferred Providers) and 1301.0047, from being construed to limit the level of reimbursement or the level of coverage, including deductibles, copayments, coinsurance, or other cost-sharing provisions, that are applicable to preferred providers or, for plans other than exclusive provider benefit plans, nonpreferred providers, and to make a nonsubstantive change.
SECTION 3. Amends Subchapter A, Chapter 1301, Insurance Code, by adding Section 1301.0047, as follows:
Sec. 1301.0047. INCENTIVES TO USE CERTAIN PHYSICIANS OR HEALTH CARE PROVIDERS. (a) Authorizes an insurer to provide incentives for insureds to use certain physicians or health care providers through modified deductibles, copayments, coinsurance, or other cost-sharing provisions.
(b) Provides that an insurer that encourages an insured to obtain a health care service from a particular physician or health care provider, including offering incentives to encourage insureds to use specific physicians or providers, or that introduces or modifies a tiered network plan or assigns physicians or providers into tiers, has a fiduciary duty to the insured or policyholder to engage in that conduct only for the primary benefit of the insured or policyholder.
(c) Provides that an insurer violates the fiduciary duty described by Subsection (b) by offering incentives to encourage insureds to use a particular physician or health care provider solely because the physician or provider directly or indirectly through one or more intermediaries controls, is controlled by, or is under common control with the insurer.
(d) Provides that conduct that violates the fiduciary duty described by Subsection (b) includes using a steering approach or a tiered network to provide a financial incentive as an inducement to limit medically necessary services, encourage receipt of lower quality medically necessary services, or violate state or federal law, failing to implement reasonable procedures to ensure that certain criteria are met, and failing to use objective, verifiable, and accurate information as the basis of any encouragement or incentive under this section.
SECTION 4. Amends Section 1460.003, Insurance Code, by amending Subsection (a) and adding Subsection (a-1), as follows:
(a) Prohibits a health benefit plan issuer, including a subsidiary or affiliate, from ranking physicians or classifying physicians into tiers based on performance unless:
(1) the standards used by the health benefit plan issuer to rank or classify are developed or prescribed by an organization designated by the commissioner of insurance (commissioner) through rules adopted under Section 1460.005 (Rules; Standards);
(2) the ranking or classification and any methodology used to rank or classify meet certain criteria; and
(3) each affected physician is given an easy-to-use process to identify:
(A) before the release, publication, or distribution of the ranking or classification, any discrepancy between the standards and the ranking or classification proposed by the health benefit plan issuer; and
(B) after the release, publication, or distribution of the ranking or classification, any objectively and verifiably false information contained in the ranking or classification.
Deletes existing text prohibiting a health benefit plan issuer, including a subsidiary or affiliate, from publishing physician-specific information that includes rankings, tiers, ratings, or other comparisons of a physician's performance against standards, measures, or other physicians, unless certain criteria are met.
(a-1) Requires a health benefit plan issuer, if a physician submits information under Subsection (a)(3) sufficient to establish a verifiable discrepancy or objectively and verifiably false information contained in the ranking or classification or a violation of Chapter 1460 (Standards Required Regarding Certain Physician Rankings by Health Benefit Plans), to remedy the discrepancy, false information, or violation by the later of certain dates.
SECTION 5. Amends Section 1460.005, Insurance Code, by amending Subsection (c) and adding Subsection (d), as follows:
(c) Provides that, in adopting rules under this section for purposes of Section 1460.003(a)(1), the commissioner is authorized to only designate an organization that meets the following requirements:
(1) the organization is a national medical specialty society or a bona fide organization that is unbiased toward or against any medical provider or health benefit plan issuer; and
(2) the standards developed or prescribed by the organization that are to be used in rankings or classifications meet certain criteria.
Deletes existing text requiring the commissioner, in adopting rules under this section, to consider the standards, guidelines, and measures prescribed by nationally recognized organizations that establish or promote guidelines and performance measures emphasizing quality of health care, including the National Quality Forum and the AQA Alliance. Deletes existing text requiring the commissioner, if neither the National Quality Forum nor the AQA Alliance has established standards or guidelines regarding an issue, to consider the standards, guidelines, and measures prescribed by the National Committee on Quality Assurance and other similar national organizations. Deletes existing text requiring the commissioner, if neither the National Quality Forum, nor the AQA Alliance, nor other national organizations have established standards or guidelines regarding an issue, to consider standards, guidelines, and measures based on other bona fide nationally recognized guidelines, expert-based physician consensus quality standards, or leading objective clinical evidence and scholarship.
(d) Defines "national medical specialty society."
SECTION 6. Amends Section 1460.007, Insurance Code, by adding Subsection (c) to require the commissioner to prohibit a health benefit plan issuer from using a ranking or classification system otherwise authorized under this chapter for not less than 12 consecutive months if the commissioner determines that the health benefit plan issuer has engaged in a pattern of discrepancies, falsehoods, or violations described by Section 1460.003(a-1).
SECTION 7. Effective date: September 1, 2025.