HB 2254

relating to certain health care services contract arrangements
entered into by insurers and health care providers.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1.  Subchapter A, Chapter 1301, Insurance Code, is
amended by adding Section 1301.0065 to read as follows:
Sec. 1301.0065.  VALUE-BASED AND CAPITATED PAYMENT
ARRANGEMENTS WITH PRIMARY CARE PHYSICIANS OR PRIMARY CARE PHYSICIAN
GROUPS NOT PROHIBITED.  (a)  In this section:
(1)  "Primary care physician" means a specialist in
family medicine, general internal medicine, or general pediatrics
who provides definitive care to the undifferentiated patient at the
point of first contact and takes continuing responsibility for
providing the patient's comprehensive care, which may include
chronic, preventive, and acute care.
(2)  "Primary care physician group" means an entity
through which two or more primary care physicians deliver health
care to the public through the practice of medicine on a regular
(A)  owned and operated by two or more physicians;
(B)  a freestanding clinic, center, or office of a
nonprofit health organization certified by the Texas Medical Board
under Section 162.001(b), Occupations Code, that complies with the
requirements of Chapter 162, Occupations Code.
(b)  A preferred provider benefit plan or an exclusive
provider benefit plan may provide or arrange for health care
services with a primary care physician or primary care physician
group through a contract for compensation under:
(1)  a fee-for-service arrangement;
(2)  a risk-sharing arrangement;
(3)  a capitation arrangement under which a fixed
predetermined payment is made in exchange for the provision of, or
for the arrangement to provide and the guaranty of the provision of,
a contractually defined set of covered services to covered persons
for a specified period without regard to the quantity of services
(4)  any combination of arrangements described by
(c)  A primary care physician or primary care physician group
that enters into a contract described by Subsection (b) is not
considered to be engaging in the business of insurance.
(d)  A primary care physician or primary care physician group
is not required to enter into a payment arrangement under this
section, and an insurer may not discriminate against a physician or
physician group that elects not to participate in an arrangement
under this section, including by:
(1)  reducing the fee schedule of a physician or
physician group because the physician or physician group does not
participate in the insurer's value-based or capitated payment
arrangement or other payment arrangement provided under this
(2)  requiring a physician or physician group to
participate in the insurer's value-based or capitated payment
arrangement or other payment arrangement provided under this
section as a condition of participation in the insurer's provider
(e)  A primary care physician or primary care physician group
may file a complaint with the department if the physician or
physician group believes the physician or physician group has been
discriminated against in violation of Subsection (d).
(f)  A contract allowing for a value-based or capitated
payment arrangement or other payment arrangement provided under
(1)  may not create a disincentive to the provision of
medically necessary health care services and may not interfere with
the physician's independent medical judgment on which services are
medically appropriate or medically necessary;
(A)  in writing if compensation is being paid
based on satisfaction of performance measures and, if so,
(ii)  the source of the measures;
(iii)  the method and time period for
calculating whether the performance measures have been satisfied;
performance-based information used to determine whether the
physician met those measures; and
(v)  the method by which the physician may
(B)  that the attribution process will assign a
(i)  first the patient's established
physician, as determined by a prior annual exam or other office
(ii)  if no established physician
relationship exists, then a physician chosen by the patient;
(C)  if payment involves capitation, whether a
bridge rate, such as a discounted fee for service, will remain in
effect for a certain period until sufficient data has been
generated regarding utilization to allow an insurer to make an
informed decision regarding fully capitated rates;
(D)  whether the capitated rate, if any, will
provide for a stop-loss threshold or a guaranteed minimum level of
payment per month, and whether the physician will obtain stop-loss
(E)  whether payment will take into account
patients who are added to or eliminated from the attributed
population during the course of a measurement period;
(3)  if payment involves capitation, must provide for
the opportunity to renegotiate in good faith a revised capitation
rate, or reimburse on a fee-for-service basis under a contractual
fee schedule until a revised capitation rate is agreed to if there
is a material increase in the scope of services provided by the
physician or a material change by the payer in the benefit
(A)  whether catastrophic events are excluded
from the final cost calculation for an attributed population when
compared to the cost target for the measurement period, if
(B)  if payment involves shared savings, whether
the entire savings is shared when the minimum savings rate is
reached, or whether only the amount in excess of the minimum savings
(g)  This section does not authorize a preferred provider
benefit plan or an exclusive provider benefit plan to provide or
arrange for health care services with a primary care physician or
primary care physician group through a contract for compensation
under a global capitation arrangement.
(h)  The parties to a contract under Subsection (b) are the
primary care physician or primary care physician group and the
preferred provider benefit plan or exclusive provider benefit plan.
A party to a contract under Subsection (b) may not subcontract.
SECTION 2.  This Act takes effect immediately if it receives
a vote of two-thirds of all the members elected to each house, as
provided by Section 39, Article III, Texas Constitution.  If this
Act does not receive the vote necessary for immediate effect, this
Act takes effect September 1, 2025.