HB 1225

relating to the establishment of a bundled-pricing program to
reduce certain health care costs in the state employees group
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1.  Chapter 1551, Insurance Code, is amended by
adding Subchapter K to read as follows:
SUBCHAPTER K. BUNDLED-PRICING PROGRAM
Sec. 1551.501.  DEFINITIONS.  In this subchapter:
(1)  "Facility-based provider" has the meaning
(2)  "Program" means the bundled-pricing program
developed under this subchapter.
Sec. 1551.502.  BUNDLED-PRICING PROGRAM.  (a)  The board of
trustees shall develop a cost-positive bundled-pricing program for
health benefit plans provided under the group benefits program.
(b)  The program must be designed to reduce health care costs
in the group benefits program by contracting with a health care
facility, physician, or health care provider at a consolidated rate
for an inpatient or outpatient surgery procedure that is a covered
health care or medical service under a health benefit plan provided
under the group benefits program.
(c)  A consolidated rate described by Subsection (b) must
include all fees related to the covered surgery procedure,
including fees for a health care facility, physician, health care
provider, laboratory, anesthesia, perioperative service,
prescription drug, or pharmacy service.
(d)  The board of trustees shall contract with a third-party
administrator to administer the program. The program administrator
may be independent from the administrator of a health benefit plan
under the group benefits program.
Sec. 1551.503.  PARTICIPATION; COST-SHARING OBLIGATION.
(a)  A participant may have only an inpatient or outpatient surgery
(b)  Except as provided by Subsection (c), the board of
trustees or a participating health care facility, physician, or
health care provider may not require a participant to pay a
deductible, copayment, coinsurance, or other cost-sharing
obligation for a covered surgery procedure provided under the
(c)  The board of trustees may require a participant in the
state consumer-directed health plan established under Section
1551.452 to meet the participant's deductible before the plan pays
for a covered surgery procedure provided under the program.
Sec. 1551.504.  PROVIDER PARTICIPATION.  (a)  A health care
facility, physician, or health care provider is not required to
participate in the program.  To participate, a health care
facility, physician, or health care provider must voluntarily and
expressly agree in writing to participate.
(b)  A health care facility may not directly or indirectly:
(1)  coerce a facility-based provider or physician to
participate in the program or accept a lower rate for an inpatient
or outpatient surgery procedure;
(2)  condition a physician's staff membership or
privileges on the physician's participation in the program;
(3)  consider a physician's participation or lack of
participation in the program in credentialing the physician;
(4)  offer preferential scheduling to a participating
physician as compared to a physician who elects not to participate;
(5)  terminate or otherwise penalize a physician or
health care provider for an election to not participate in the
(c)  The board of trustees, a health benefit plan, an
administrator of a health benefit plan provided under the group
program, or a health benefit plan issuer may not directly or
(1)  coerce a health care facility, physician, or
health care provider to participate in the program;
(2)  condition any plan participation on participation
(3)  terminate or otherwise penalize a health care
facility, physician, or health care provider for electing not to
Sec. 1551.505.  PROCEDURE APPROVAL.  (a)  Before scheduling
a procedure under the program, a participating health care
facility, physician, or health care provider must apply for
approval from the program administrator in the form and manner
prescribed by the board of trustees.
(b)  The approval application must include the consolidated
rate for the procedure and any other information determined
necessary by the program administrator.
(c)  In determining whether to approve a procedure under this
section, the program administrator shall:
(1)  ensure that the quality of care is comparable to
the care provided by a network provider for a health benefit plan
under the group benefits program;
(2)  ensure that the procedure's cost is lower than the
procedure's cost if performed outside of the program; and
(3)  if there is not a quality differential and
multiple health care facilities, physicians, or health care
providers apply to perform the same procedure for a participant,
consider the procedure's consolidated rate and the time the
procedure will be performed as the most important factors.
Sec. 1551.506.  PAYMENT.  (a)  The board of trustees shall
ensure that a participating health care facility, physician, or
health care provider receives payment for a covered surgery
procedure not later than the 30th day after the date the program
administrator receives a claim for the procedure that includes, at
a minimum, each current procedural terminology code associated with
the bundled procedure and each ICD-10 code associated with the
(b)  The program must include the methods by which payments
are allocated among a participating health care facility,
physician, or health care provider. If the consolidated bundled
payment is to be paid to an entity for further distribution to other
participating health care facilities, physicians, or health care
providers, the entity receiving the consolidated payment must be a
physician-led organization and have contracting authority on
behalf of the other participating facilities, physicians, and
(c)  A participating health care facility, physician, or
health care provider may submit a request for payment to the
administrator for unanticipated services required to be provided
while performing a procedure under the program. The request must
include information on the reason the services were required.
Sec. 1551.507.  BUNDLED-PRICING DISCLOSURE.  (a) A
participating health care facility, physician, or health care
provider shall provide a written disclosure to a participant or the
participant's representative of the consolidated rate for a
procedure provided under the program before scheduling the
(b)  A health care facility, physician, or health care
provider that participates in the program may disclose a
consolidated rate for an inpatient or outpatient surgery procedure
on the facility's, physician's, or provider's Internet website and
Sec. 1551.508.  PUBLICATION OF INFORMATION.  The board of
trustees shall publish information on the program, including a list
of participating health care facilities, physicians, and health
care providers and the consolidated rates offered by each
participating facility, physician, and provider, on the Employees
Retirement System of Texas website.
Sec. 1551.509.  UNAUTHORIZED PRACTICE OF MEDICINE
PROHIBITED.  This subchapter may not be construed to authorize:
(1)  a lay person or entity to supervise or otherwise
control the practice of medicine as prohibited under Subtitle B,
(2)  a person or entity to engage in the unauthorized
practice of medicine in this state;
(3)  a person or entity to misrepresent that the person
or entity is entitled to practice medicine; or
(4)  a violation of Section 155.001, 155.003, 157.001,
164.052, or 165.156, Occupations Code.
Sec. 1551.510.  RULEMAKING.  The board of trustees may adopt
rules as necessary to implement this subchapter.
SECTION 2.  This Act takes effect September 1, 2025.