By: Hancock, Blanco S.B. No. 926
A BILL TO BE ENTITLED
AN ACT
relating to certain practices of health benefit plan issuers to
encourage the use of certain physicians and health care providers
and rank physicians.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subchapter I, Chapter 843, Insurance Code, is
amended by adding Section 843.322 to read as follows:
Sec. 843.322. INCENTIVES TO USE CERTAIN PHYSICIANS OR
PROVIDERS. (a) A health maintenance organization may provide
incentives for enrollees to use certain physicians or providers
through modified deductibles, copayments, coinsurance, or other
cost-sharing provisions.
(b) A health maintenance organization 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) A health maintenance organization 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 health maintenance organization.
(d) Conduct that violates the fiduciary duty described by
Subsection (b) includes:
(1) 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;
(2) failing to implement reasonable procedures to
ensure that:
(A) participating providers that enrollees are
encouraged to use within any steering approach or tiered network
are not of materially lower quality than participating providers
that enrollees are not encouraged to use; and
(B) the health maintenance organization does not
make materially false statements or representations about a
physician's or provider's quality of care or costs; and
(3) failing to use objective, verifiable, and accurate
information as the basis of any encouragement or incentive under
this section.
(e) An encouragement or incentive authorized by this
section may not:
(1) be based solely on cost; or
(2) impose a cost-sharing requirement for
out-of-network emergency services that is greater than the
cost-sharing requirement that would apply had the services been
furnished by a participating provider.
(f) This section does not apply to a vision care plan, as
defined by Section 1451.157.
SECTION 2. Section 1301.0045(a), Insurance Code, is amended
to read as follows:
(a) Except as provided by Sections [Section] 1301.0046 and
1301.0047, this chapter may not be 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.
SECTION 3. Subchapter A, Chapter 1301, Insurance Code, is
amended by adding Section 1301.0047 to read as follows:
Sec. 1301.0047. INCENTIVES TO USE CERTAIN PHYSICIANS OR
HEALTH CARE PROVIDERS. (a) An insurer may provide incentives for
insureds to use certain physicians or health care providers through
modified deductibles, copayments, coinsurance, or other
cost-sharing provisions.
(b) 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) 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) Conduct that violates the fiduciary duty described by
Subsection (b) includes:
(1) 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;
(2) failing to implement reasonable procedures to
ensure that:
(A) preferred providers that insureds are
encouraged to use within any steering approach or tiered network
are not of materially lower quality than preferred providers that
insureds are not encouraged to use; and
(B) the insurer does not make materially false
statements or representations about a physician's or health care
provider's quality of care or costs; and
(3) failing to use objective, verifiable, and accurate
information as the basis of any encouragement or incentive under
this section.
(e) An encouragement or incentive authorized by this
section may not:
(1) be based solely on cost; or
(2) impose a cost-sharing requirement for
out-of-network emergency services that is greater than the
cost-sharing requirement that would apply had the services been
furnished by a preferred provider.
(f) This section does not apply to a vision care plan, as
defined by Section 1451.157.
SECTION 4. Section 1460.003, Insurance Code, is amended by
amending Subsection (a) and adding Subsection (a-1) to read as
follows:
(a) A health benefit plan issuer, including a subsidiary or
affiliate, may not rank physicians or[,] 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 to rank or classify are developed or prescribed by an
organization designated by the commissioner through rules adopted
under Section 1460.005;
(2) the ranking or classification and any methodology
used to rank or classify:
(A) is disclosed to each affected physician at
least 45 days before the date the ranking or classification is
released, published, or distributed by the health benefit plan
issuer; and
(B) identifies which products or networks
offered by the health benefit plan issuer the ranking or
classification will be used for; 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 [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].
(a-1) 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 this chapter, the
health benefit plan issuer must remedy the discrepancy, false
information, or violation by the later of:
(1) the release, publication, or distribution of the
ranking or classification; or
(2) the 30th day after the date the health benefit plan
issuer receives the information.
SECTION 5. Section 1460.005, Insurance Code, is amended by
amending Subsection (c) and adding Subsection (d) to read as
follows:
(c) In adopting rules under this section for purposes of
Section 1460.003(a)(1), the commissioner may only designate an
organization that meets the following requirements:
(1) the organization is:
(A) a national medical specialty society; or
(B) 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:
(A) emphasize quality of care and:
(i) are nationally recognized, in widely
circulated peer-reviewed medical literature, expert-based
physician consensus quality standards, or leading objective
clinical evidence-based scholarship;
(ii) have a publicly transparent
methodology; and
(iii) if based on clinical outcomes, are
risk-adjusted; and
(B) are compatible with an easy-to-use process in
which a physician or person acting on behalf of the physician may
report data, evidentiary, factual, or mathematical discrepancies,
errors, omissions, or faulty assumptions for investigation and, if
appropriate, correction [shall 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. If neither the National Quality Forum
nor the AQA Alliance has established standards or guidelines
regarding an issue, the commissioner shall consider the standards,
guidelines, and measures prescribed by the National Committee on
Quality Assurance and other similar national organizations. If
neither the National Quality Forum, nor the AQA Alliance, nor other
national organizations have established standards or guidelines
regarding an issue, the commissioner shall 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) In this section, "national medical specialty society"
means a national organization:
(1) with a majority of members who are physicians;
(2) that represents a specific physician medical
specialty; and
(3) that is represented in the house of delegates of
the American Medical Association.
SECTION 6. Section 1460.007, Insurance Code, is amended by
adding Subsection (c) to read as follows:
(c) The commissioner shall 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. This Act takes effect September 1, 2025.