BILL ANALYSIS

Senate Research Center	S.B. 884
89R8002 SCL-D	By: Kolkhorst
	Health & Human Services
	3/28/2025
	As Filed

AUTHOR'S / SPONSOR'S STATEMENT OF INTENT

Controlling healthcare costs remains a significant challenge in the state-regulated health insurance market. Currently, the Texas market lacks a clear direction for implementing cost-sharing incentive programs for health plan enrollees. S.B. 884 addresses the unprecedented growth in spending by requiring health plans to incentivize enrollees to become involved in their healthcare expenses. A shared saving program refers to a financial incentive program run by the health plan where the enrollee is rewarded for finding an out-of-network medical service that is cheaper than the in-network contracted rate. S.B. 884 aims to rectify excessive healthcare costs by promoting better price disclosures for healthcare services while providing market incentives for both individuals and insurance providers to recognize cost-effective care, irrespective of network status.

Current laws and regulations that apply to the state-regulated commercial health insurance market have not allowed health plans to reward patients for choosing low-cost options for some medical services. Without systemic changes, a growing number of Texans will struggle to afford healthcare services, even if they have health insurance coverage. S.B. 884 requires that commercial health plans implement a shared savings incentive program so patients are rewarded for finding quality, lower-cost, out-of-network healthcare services, including out-of-network providers located in the state.

As proposed, S.B. 884 amends current law relating to establishment of a shared savings program for certain managed care plans.

RULEMAKING AUTHORITY

Rulemaking authority is expressly granted to the commissioner of insurance in SECTION 1 (Section 1276.003, Insurance Code) of this bill.

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Subtitle C, Title 8, Insurance Code, by adding Chapter 1276, as follows:�

CHAPTER 1276. SHARED SAVINGS PROGRAM

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 1276.001. DEFINITIONS. Defines "health care provider," "managed care plan," "out-of-network provider," and "program."

Sec. 1276.002. APPLICABILITY OF CHAPTER. (a) Provides that this chapter applies only to nonemergency health care services or supplies covered under a managed care plan.

(b)� Provides that this chapter applies only to certain health benefit plans.

(c)� Provides that, notwithstanding any other law, this chapter applies to an administrator of a health benefit plan described by this section.

Sec. 1276.003.� RULES. Authorizes the commissioner of insurance to adopt rules necessary to implement this chapter.

SUBCHAPTER B. PROGRAM REQUIREMENTS

Sec. 1276.051.� PROGRAM REQUIRED. (a) Requires a health benefit plan issuer or administrator to which this chapter applies to establish a shared savings program (program) in accordance with this chapter.

(b)� Requires a health benefit plan issuer or administrator to provide written notice to its enrollees of the program.

Sec. 1276.052.� AVERAGE CONTRACTED RATE DISCLOSURE. (a) Requires a health benefit plan issuer or administrator, as part of the program, to establish and operate a toll-free telephone number and publicly accessible Internet website for a plan enrollee to request disclosure of the average contracted rate paid under the 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.

(b)� Requires a health benefit plan issuer or administrator to disclose to the enrollee the rate the enrollee requested under Subsection (a).

Sec. 1276.053.� HEALTH CARE PROVIDER ESTIMATE. Requires an out-of-network provider, on an enrollee's request, to provide the enrollee a written estimate of the final charge for a proposed health care service or supply eligible for the enrollee's program. Requires that the estimate include all costs associated with the service or supply and reflect the enrollee's final out-of-pocket cost associated with the proposed service or supply.

Sec. 1276.054.� SHARED SAVINGS PAYMENT. (a) Requires the health benefit plan issuer or administrator, except as provided by Subsection (b), if an enrollee who requests a disclosure under Section 1276.052 elects and receives a health care service or supply with an actual cost equal to an amount less than the rate disclosed under Section 1276.052, to pay to the enrollee 50 percent of the difference between the disclosed rate and the actual cost, minus any applicable deductible, copayment, or coinsurance.

(b)� Provides that a health benefit plan issuer is not required to pay an enrollee under Subsection (a) if the difference described by that subsection is less than $50.

(c)� Requires a health benefit plan issuer or administrator to pay an enrollee under Subsection (a) not later than the 30th day after the date on which the enrollee submits a program claim.

Sec. 1276.055.� DEDUCTIBLES UNDER PROGRAM. (a) Provides that this section applies only to a health care service or supply for which an enrollee received a disclosure under Section 1276.052 and an estimate under Section 1276.053 equal to an amount at least $50 less than the rate provided under the disclosure.

(b)� Requires a health benefit plan issuer or administrator to apply a deductible for a health care service or supply to which this section applies in an amount equivalent to the deductible applied to a network service or supply.

Sec. 1276.056.� LIABILITY FOR UNFORESEEN CHARGE OVER ESTIMATE. Requires the enrollee's health benefit plan issuer or administrator, 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, to pay 95 percent of the difference not to exceed the allowed amount for the service or supply and provides that the enrollee is responsible for the remaining difference.

SECTION 2. Makes application of Chapter 1276, Insurance Code, as added by this Act, prospective to January 1, 2026.

SECTION 3. Effective date: September 1, 2025.