Insurance Law
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Affordability and accessibility continue to be central motifs for insurance-related legislation at the Texas Legislature. This session, significant pieces of legislation were also passed involving modernization and price transparency, particularly as they relate to pharmaceutical costs. Given the number of insurance bills that passed this session, the article below is to be viewed as a summary of the more significant legislation. All bills are effective September 1, 2021, unless otherwise indicated.
Transparency and Affordability
In the 2019 session, legislators passed HB 2536, requiring drug manufacturers to report wholesale acquisition costs and significant price increases and to provide justification for those increases on the Texas Health and Human Services Commission, or HHSC, website. This session, HB 1033 expanded on price transparency measures by requiring manufacturers to disclose research and development costs annually, limiting the scope of the word “drug” to “pharmaceutical drug,” and allowing the Texas Department of State Health Services to administer a fee for implementation and fines for failures to disclose price increases.
HB 1763 curtails the ability of pharmacy benefit managers, or PBMs, to assess retroactive fees and payment
reductions. The bill prohibits these actions by PBMs, with few exceptions, unless those fees or reductions are made as a result of an audit outcome or the pharmacy agrees. This legislation follows the U.S. Supreme Court decision in Rutledge v. Pharmaceutical Care Management Association, holding that an Arkansas PBM reform law is not preempted by the Employment Retirement Income Security Act of 1974.
HB 1919 seeks to prevent pharmacies’ concern of PBMs referring patients to their own specialty pharmacies by protecting the right of pharmacy patients to use their pharmacy of choice.
HB 2090 codifies the federal price transparency rules for health plans into Texas statute. It also requires insurers and third-party administrators to disclose information related to health care costs at the request of the enrollee.
HB 18 requires HHSC to develop a prescription drug savings program that partners with a PBM to offer prescription drugs at a discounted rate to uninsured individuals.
HB 1935 gives pharmacists the authority to dispense a 30-day emergency supply of insulin and insulin-related equipment and supplies if specific criteria are met. Previously, they could only fill a three-day emergency refill.
SB 827 caps the out-of-pocket costs in a health plan’s cost-sharing requirements for insulin at $25 for a 30-day supply.
SB 1296 gives the Texas Department of Insurance, or TDI, commissioner authority to review and disapprove rates of health benefit plans and to draft rules on a process for doing so. It also includes rules establishing geographic rating areas. This role was ceded to the federal government in 2013 as a result of the Affordable Care Act, or ACA. Now that the feds have ended reimbursements, having TDI review rates ensures Texans are getting allowed subsidies and that rates remain affordable.
Transparency and Modernization
The changing landscape of how we do business due to COVID-19 affected all lines of insurance, creating a push for more electronic means of health care delivery as well as flexibility in how insurers do business. Effective June 15, 2021, HB 4 made permanent most of the Medicaid/Children’s Health Insurance Program waivers put in place as part of the state’s COVID-19 response while still upholding the standard of care. It also addressed gaps related to the use of technology in delivering services and information to clients identified by stakeholders during the COVID-19 pandemic. Dentists also are included in telehealth expansion as a result of HB 2056.
SB 2124 seeks to give employers the authority to “opt in” all employees to electronic delivery by default, while providing employees the ability to “opt out” of this paperless option should they so choose.
SB 1367 exempts a list of insurance products for large commercial risks and 17 specialty commercial insurance lines—from rate filing and review requirements—consistent with the existing exemption from form filing requirements for those same risks. A TDI recommendation, these changes will help employers gain specialty products in an evolving market.
SB 918 provides flexibility for when meetings can be held, allowing smaller insurance companies to operate with smaller boards and eliminating unnecessary regulations on boards, similar to other companies governed by the Texas Business Organizations Code.
Health Insurance Substitutes
In attempts to address accessibility to health products, several bills were offered this session allowing for certain insurers to offer products outside of the requirements of traditional health plans. Opponents argued these products are not pervasive coverage and could hinder the market. Time will tell as two of these bills passed. HB 3924 allows the Texas Farm Bureau to offer health products to its members. The bill exempts these plans from the definition of insurance.
HB 3752 allows Texas Mutual Insurance Company, or TMIC, to offer health products to its members, individuals, and employers with fewer than 250 employees, beginning September 1, 2023. By September 1, 2022, TMIC must submit a report to the Legislature on the feasibility in the market for this new product, taking into account a laundry list of requirements, including preexisting conditions. Health Mandates and Rising Costs
HB 317 prohibits insurers from discriminating against living organ donors by denying coverage, increasing premiums, or taking other adverse actions against them.
HB 428 expands the mandate for ovarian cancer testing and screening by including any test or screening approved by the U.S. Food and Drug Administration for the detection of ovarian cancer during annual well woman examinations.
SB 1065 requires that a health benefit plan that covers a screening mammogram must provide coverage that is no less favorable for diagnostic imaging. SB 1028 lowers the mandate for colorectal cancer detection from age 50 to age 45 and requires a colonoscopy if the screening comes back with positive cancer indicators.
SB 2016—effective immediately with the governor’s signature on June 16, 2021—exempts health plans from compliance with any state-mandated benefits determined to exceed the federally mandated essential health benefits and for which the state must defray the cost.
Additional Health Insurance Related Bills of Significance As a result of concerns raised by health providers, HB 3459 requires physicians involved in utilization review to be in the same field as those they are reviewing. It also exempts certain physicians and providers from preauthorization requirements if they had at least 90% of their preauthorization requests approved by the insurer in the preceding calendar year. Effective June 7, 2021, SB 874 allows for TDI to access federal funds for high-risk individuals should funds become available during the interim. Texas dissolved its high-risk pool after the ACA was passed because insurers could no longer prohibit offering coverage to individuals with serious and/or preexisting health conditions.
HB 2595, the result of recommendations from the Mental Health Condition and Substance Use Disorder Parity Workgroup created by legislation last session, creates a parity complaint portal, provides training related to parity, creates educational materials to raise public awareness, and designates October as Mental Health Condition and Substance Use Disorder Parity Awareness Month.