BILL ANALYSIS

Senate Research Center	C.S.S.B. 884
89R23381 SCL-D	By: Kolkhorst
	Health & Human Services
	4/10/2025
	Committee Report (Substituted)

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.

(Original Author's/Sponsor's Statement of Intent)

C.S.S.B. 884 amends current law relating to establishment of a shared savings program for health maintenance organizations and preferred provider benefit 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 "direct pay provider," "health care provider," and "program."

Sec. 1276.002. APPLICABILITY OF CHAPTER. Provides that this chapter applies only to medically necessary nonemergency health care services or supplies covered a health care plan provided by a health maintenance organization operating under Chapter 843 (Health Maintenance Organizations) or a preferred provider benefit plan provided under Chapter 1301 (Preferred Provider Benefit Plans).

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 maintenance organization or insurer to which this chapter applies to establish a shared savings program in accordance with this chapter.

(b) Requires a health maintenance organization or insurer to provide written notice to its enrollees or insureds of the program.

(c) Prohibits an insurer from requiring a different procedure for an insured to claim a shared savings incentive payment under this chapter than the procedures established by the insurer under Section 1301.140 (Out-of-Pocket Expense Credit).

Sec. 1276.052. AVERAGE CONTRACTED RATE DISCLOSURE. (a) Requires a health maintenance organization or insurer, as part of the program, to establish a publicly available Internet website for any person to view the average contracted rate paid by the health maintenance organization or insurer under a health care plan or preferred provider benefit 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. Requires the health maintenance organization or insurer to update the average contracted rate at least once per month.

(b) Requires a health maintenance organization or insurer, as part of the program, to establish and operate a toll-free telephone number for an enrollee or insured to request disclosure of the average contracted rate paid under the enrollee's health care plan or the insured's preferred provider benefit 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.

(d) Requires a health maintenance organization or insurer to disclose to the enrollee or insured the rate the enrollee or insured requested under Subsection (b).

Sec. 1276.053. PARTICIPATION USING DIRECT PAY PROVIDER. (a) Authorizes a health care provider, for purposes of enrollee or insured eligibility for a shared savings incentive payment under Section 1276.054, to be considered a direct pay provider if the health care provider:

(1) publishes the final price that the provider would accept for a health care service or supply eligible under a program for each of the 100 most common nonemergency health care services or supplies offered by the provider and that reflects the enrollee's or insured's final out-of-pocket cost for the service or supply; or

(2) provides an enrollee or insured on request a direct pay price with a written estimate of the final charge for a proposed health care service or supply eligible under the enrollee's or insured's program that includes prices for all services or supplies associated with the proposed service or supply and that reflects the enrollee's or insured's final out-of-pocket cost.

(b) Provides that a facility to which Chapter 324 (Consumer Access to Health Care Information), Health and Safety Code, applies that provides an estimate of the facility's charges for a proposed service in accordance with Section 324.101(d) (relating to requiring a facility to provide an estimate of the facility's charges for certain services on request), Health and Safety Code, satisfies Subsection (a)(2) with respect to that service.

(c) Authorizes an enrollee or insured to request a direct pay price described by Subsection (a)(2) from any health care provider, regardless of whether the provider has published the information described by Subsection (a)(1), and provides that the enrollee's or insured's decision to obtain a health care service or supply from that provider does not affect eligibility for a shared savings incentive payment under the enrollee's or insured's program.

(d) Authorizes a direct pay provider to provide assistance to an enrollee or insured in filing paperwork or providing proof of care or medical necessity in connection with the enrollee's or insured's claim for reimbursement or a shared savings incentive payment under this chapter.

Sec. 1276.054. SHARED SAVINGS INCENTIVE PAYMENT. (a) Provides that an enrollee or insured who elects and receives a medically necessary and covered health care service or supply from a direct pay provider and pays an actual price less than the rate disclosed by the enrollee's health maintenance organization or the insured's insurer under Section 1276.052 is eligible for a shared savings incentive payment.

(b) Requires a health maintenance organization or insurer, except as provided by Subsection (c), to pay to an eligible enrollee or insured a certain shared savings incentive payment.

(c) Provides that a health maintenance organization or insurer is not required to pay an enrollee or insured a shared savings incentive payment under Subsection (b) if:

(1) the amount of the shared savings incentive payment would be less than $50; or

(2) both the enrollee's or insured's total shared savings incentive payments for the plan year exceed the greater of 20,000 or the enrollee's or insured's deductibles and out-of-pocket maximum and the health maintenance organization or insurer has provided written notice to the enrollee or insured that they are not eligible for a shared savings incentive payment for the remainder of the plan year.

(d) Requires a health maintenance organization or insurer to pay an enrollee or insured under Subsection (b) not later than the 30th day after the date on which the enrollee or insured submits a program claim.

(e) Authorizes a health maintenance organization or insurer to pay a shared savings incentive payment through a cash payment or other certain incentives or combination of incentives.

Sec. 1276.055. COST SHARING UNDER PROGRAM FOR PREFERRED PROVIDER BENEFIT PLAN. (a) Provides that this section applies only to a medically necessary health care service or supply that is covered under a preferred provider benefit plan and that an insured receives from a direct pay provider for an amount that is less than the average contracted rate disclosed by the insured's insurer under Section 1276.052.

(b) Requires an insurer to comply with the requirements of Section 1301.140 to ensure that cost-sharing amounts paid by an insured for a service or supply described by Subsection (a) are counted toward the insured's in-network cost-sharing limits.

Sec. 1276.056. ACCOUNTING AND ADMINISTRATION FOR HEALTH MAINTENANCE ORGANIZATION OR INSURER. (a) Requires a health maintenance organization or insurer that pays total shared savings incentive payments in excess of $600 to an enrollee or insured during a calendar year, if required by the federal government, to issue to the enrollee or insured an Internal Revenue Service Form 1099 not later than January 31 of the following year.

(b) Authorizes a health maintenance organization or insurer that pays shared savings incentive payments under this chapter to apply to the United States Department of Health and Human Services to include the payments as incurred claims under 45 C.F.R. Section 158.221(b)(8).

Sec. 1276.057. LIABILITY FOR UNFORESEEN CHARGE OVER ESTIMATE. Provides that, 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, the enrollee or insured is liable for the difference only if before the enrollee or insured is billed, the enrollee or insured agrees in writing to pay the additional amount and before receiving the service or supply, the enrollee or insured receives written notice that the enrollee or insured may be liable for charges resulting from unforeseen circumstances.

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.