Relating to certain practices of health benefit plan issuers to encourage the use of certain physicians and health care providers and rank physicians.

89(R) SB 926 - Enrolled version - Bill Text

S.B. No. 926

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.

______________________________

______________________________

President of the Senate

Speaker of the House

I hereby certify that S.B. No. 926 passed the Senate on

April 16, 2025, by the following vote: Yeas 31, Nays 0.

______________________________

Secretary of the Senate

I hereby certify that S.B. No. 926 passed the House on

May 28, 2025, by the following vote: Yeas 138, Nays 0, one

present not voting.

______________________________

Chief Clerk of the House

Approved:

______________________________

Date

______________________________

Governor