BILL ANALYSIS

C.S.H.B. 3863

By: Canales

Insurance

Committee Report (Substituted)

BACKGROUND AND PURPOSE

The bill author has informed the committee that mental health providers face growing barriers to receiving full insurance payments due to hidden transaction fees imposed by managed care organizations (MCOs) and third-party payment processors, and that these unnecessary costs create a "double discount," reducing provider earnings beyond the agreed insurance reimbursement rates. The bill author has also informed the committee that MCOs impose these fees on providers, which makes insurance participation financially unsustainable, makes the mental health workforce shortage worse, and limits access to care. C.S.H.B. 3863 seeks to address this issue by eliminating transaction fees passed on to providers.

CRIMINAL JUSTICE IMPACT

It is the committee's opinion that this bill does not expressly create a criminal offense, increase the punishment for an existing criminal offense or category of offenses, or change the eligibility of a person for community supervision, parole, or mandatory supervision.

RULEMAKING AUTHORITY

It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency, or institution.

ANALYSIS

C.S.H.B. 3863 amends the Government Code to require a contract between a Medicaid managed care organization (MCO) and the Health and Human Services Commission (HHSC) that provides health care services to prohibit the contracting MCO from requiring a physician or provider to accept a claim payment in the form of a virtual credit card or any other payment method with respect to which a fee, including a processing fee, administrative fee, percentage amount, or dollar amount, is assessed to receive the payment. The bill exempts a nominal fee assessed by the physician's or provider's bank to receive an electronic funds transfer from the prohibition. These provisions apply only to a contract entered into on or after the bill's effective date. A contract entered into before the bill's effective date is governed by the law as it existed immediately before the bill's effective date, and that law is continued in effect for that purpose.

C.S.H.B. 3863 amends the Insurance Code to prohibit a health maintenance organization (HMO) or an insurer from requiring a physician, provider, or health care provider, as applicable, to accept a claim payment in the form of a virtual credit card or any other payment method with respect to which a fee, including a processing fee, administrative fee, percentage amount, or dollar amount, is assessed to receive the payment. The bill excepts a nominal fee assessed by the physician's or provider's bank to receive an electronic funds transfer from the prohibition. These provisions apply only to a claim submitted on or after the bill's effective date. A claim submitted before the bill's effective date is governed by the law as it existed immediately before the bill's effective date, and that law is continued in effect for that purpose.

If before implementing any provision of the bill a state agency determines that a waiver or authorization from a federal agency is necessary for implementation of that provision, the agency affected by the provision must request the waiver or authorization and may delay implementing that provision until the waiver or authorization is granted.

EFFECTIVE DATE

September 1, 2025.

COMPARISON OF INTRODUCED AND SUBSTITUTE

While C.S.H.B. 3863 may differ from the introduced in minor or nonsubstantive ways, the following summarizes the substantial differences between the introduced and committee substitute versions of the bill.

The substitute omits the following provisions present in the introduced:

· a provision changing the deadline by which certain claims under a contract between a Medicaid managed care organization and HHSC that provides health care services must be paid;

· a specification that the requirement for a process to track and resolve provider appeals relating to claim payments under a Medicaid managed care contract to allow a provider to initiate an appeal of a claim relates to the provision of long-term services and supports other than those described as services provided by a nursing facility, intermediate care facility, or group home;

· a provision removing the deadline for action by an HMO on a clean claim;

· provisions removing the deadlines for payment of certain claims under exclusive provider benefit plans and preferred provider benefit plans;

· provisions making conforming changes based on the introduced version's changes; and

· a provision establishing that provisions relating to a claim submitted under a contract with an HMO or insurer apply only to a claim submitted under a contract entered into on or after the bill's effective date and that a claim submitted under a contract entered into before the bill's effective date is governed by the law as it existed immediately before the bill's effective date, and that law is continued in effect for that purpose.