89R5926 SCR-D

By: Oliverson H.B. No. 3845

A BILL TO BE ENTITLED

AN ACT

relating to the regulation of certain compensation, contracting, employment, and performance criteria in connection with utilization review of health benefits.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Section 4201.154(b), Insurance Code, is amended to read as follows:

(b) Any information obtained or acquired under the authority of this section, Section 4201.153, and this chapter is confidential and privileged and is not subject to Chapter 552, Government Code, or to subpoena except to the extent necessary for:

(1) the commissioner to enforce this chapter; or

(2) discovery in an action brought under Section 4201.254.

SECTION 2. Subchapter D, Chapter 4201, Insurance Code, is amended by adding Section 4201.156 to read as follows:

Sec. 4201.156. PROHIBITED BASES FOR COMPENSATION, CONTRACTING, OR RETENTION OF UTILIZATION REVIEW AGENT. A payor may not permit or provide compensation or another thing of value to a utilization review agent based on, or condition a contract for the services of a utilization review agent or the retention of a utilization review agent's services on, an amount or volume of adverse determinations, reductions of or limitations on lengths of stay, benefits, services, or charges, or a number or frequency of telephone calls or other contacts with health care providers or patients, that is inconsistent with this chapter.

SECTION 3. Section 4201.253, Insurance Code, is amended to read as follows:

Sec. 4201.253. PROHIBITED BASES FOR EMPLOYMENT, COMPENSATION, EVALUATIONS, OR PERFORMANCE STANDARDS. A utilization review agent may not:

(1) permit or provide compensation or another thing of value to an employee or agent of the utilization review agent based on, condition employment of the agent's employees or agent evaluations on, or set employee or agent performance standards based on, an [based on the] amount or [of] volume of adverse determinations, reductions of or limitations on lengths of stay, benefits, services, or charges, or a [the] number or frequency of telephone calls or other contacts with health care providers or patients, that is [are] inconsistent with this chapter;

(2) induce or pressure an employee or agent of the utilization review agent to make an adverse determination or reduce or limit lengths of stays, benefits, services, or charges; or

(3) terminate, demote, retaliate against, or otherwise penalize an employee or agent of the utilization review agent for failing to make an adverse determination or reduce or limit lengths of stays, benefits, services, or charges.

SECTION 4. Subchapter F, Chapter 4201, Insurance Code, is amended by adding Section 4201.254 to read as follows:

Sec. 4201.254. RETALIATION PROHIBITED. (a) An employee or agent may bring an action against a utilization review agent that suspends or terminates the employee's employment or the agent's contractual relationship with the utilization review agent or otherwise disciplines or discriminates or retaliates against the employee or agent for:

(1) reporting in good faith to the employee's or agent's supervisor or the department a violation of this chapter; or

(2) initiating or cooperating in any investigation or proceeding of a governmental entity relating to a potential violation of this chapter.

(b) A prevailing claimant in an action brought under this section may recover:

(1) the greater of $1,000 or actual damages, including damages for mental anguish even if an injury other than mental anguish is not shown, and damages for lost wages if the claimant's employment was suspended or terminated;

(2) exemplary damages; and

(3) court costs and reasonable attorney's fees incurred in bringing the action.

(c) In addition to the amounts that may be recovered under Subsection (b), a claimant whose employment is suspended or terminated is entitled to appropriate injunctive relief, including, if applicable:

(1) reinstatement in the claimant's former position; and

(2) reinstatement of lost fringe benefits or seniority rights.

(d) In an action brought under this section, there is a rebuttable presumption that a claimant's employment or contractual relationship was suspended or terminated for reporting a violation of this chapter if the claimant is suspended or terminated before the 60th day after the date on which the person made the report.

(e) A claimant may bring an action under this section in a district court of the county in which:

(1) the claimant resides;

(2) the claimant was employed by the defendant; or

(3) the defendant conducts business.

SECTION 5. The changes in law made by this Act apply only to an contract entered into on or after the effective date of this Act.

SECTION 6. This Act takes effect September 1, 2025.