HB 4681

relating to disclosures of preauthorization requirements and
explanations of benefits for medical and health care services and
supplies covered by health maintenance organizations and preferred
provider benefit plans; imposing administrative penalties.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1.  Subchapter D, Chapter 843, Insurance Code, is
amended by adding Section 843.114 to read as follows:
Sec. 843.114.  EXPLANATION OF BENEFITS.  A health
maintenance organization shall provide a written explanation of
benefits to an enrollee for a health care service or supply
submitted by a physician or health care provider to the health
maintenance organization for payment.  The explanation must
(1)  a plain-language description of the health care
service or supply that adequately identifies for the enrollee the
health care service or supply received by the enrollee from the
(2)  a plain-language description of each identifying
code, including a denial code, provided in the explanation of
benefits that adequately informs and defines the identifying code
SECTION 2.  Section 843.3481, Insurance Code, is amended by
amending Subsections (a) and (b) and adding Subsection (e) to read
(a)  A health maintenance organization that uses a
preauthorization process for health care services shall display in
a prominent location on or through a dedicated link that is
prominently displayed on the home page of the health maintenance
organization's Internet website all [make the] requirements and
information about the preauthorization process [readily accessible
to enrollees, physicians, providers, and the general public by
posting the requirements and information on the health maintenance
organization's Internet website].
(b)  The preauthorization requirements and information
described by Subsection (a) [must]:
(B)  formatted in a manner that is digitally
searchable and prescribed by the commissioner;
(C)  accessible to a common commercial operator of
an Internet search engine as reasonably necessary for the search
(i)  index the requirements and information;
(ii)  display the requirements and
information as a result in a response to a search query initiated by
a user of the search engine; and
(D)  [(A)  except as provided by Subsection (c) or
(d), conspicuously in a location on the Internet website that does
not require the use of a log-in or other input of personal
information to view the information; and
[(B)  in a format that is easily searchable and
[(2)  except for the screening criteria under
Subdivision (4)(C), be] written in plain language that is easily
understandable by enrollees, physicians, providers, and the
(2)  may not require an individual to:
(A)  establish a user account or password;
(B)  submit personal identifying information; or
(C)  overcome any other impediment to accessing
the requirements and information, including a requirement that the
individual enter a code to access the requirements and information;
(3)  must include a detailed description of the
preauthorization process and procedure; and
(4)  must include an accurate and current list of the
health care services for which the health maintenance organization
requires preauthorization that includes the following information
(A)  the effective date of the preauthorization
(B)  a list or description of any supporting
documentation that the health maintenance organization requires
from the physician or provider ordering or requesting the service
to approve a request for that service;
(C)  the applicable screening criteria, which may
include Current Procedural Terminology codes and International
Classification of Diseases codes; and
(D)  statistics regarding preauthorization
approval and denial rates for the service in the preceding calendar
year, including statistics in the following categories:
(i)  physician or provider type and
(iii)  reasons for request denial, which may
not be in the form of alphanumeric codes;
(v)  denials overturned on internal appeal;
(vi) [(v)]  denials overturned by an
independent review organization;
(vii)  approvals and denials of expedited
[(vi)]  total annual preauthorization
requests, approvals, and denials for the service; and
(ix)  average and median times that elapsed
between the submission of a preauthorization request and a decision
by the health maintenance organization, sorted by standard
preauthorization requests and expedited preauthorization requests.
(e)  The provisions of this section may not be waived by
SECTION 3.  Section 843.3482, Insurance Code, is amended to
Sec. 843.3482.  CHANGES TO PREAUTHORIZATION REQUIREMENTS.
(a)  Except as provided by Subsection (b), not later than the 60th
business day before the date a new or amended preauthorization
requirement takes effect, a health maintenance organization that
uses a preauthorization process for health care services shall, in
accordance with Section 843.3481:
(1)  provide written notice of the new or amended
preauthorization requirement and the date and time the requirement
goes into effect to each enrollee and each participating physician
and provider in the health maintenance organization's network who
provides a health care service subject to the requirement; and
(2)  disclose the new or amended requirement and the
date and time the requirement goes into effect in the health
maintenance organization's newsletter or network bulletin, if any,
and on the health maintenance organization's Internet website.
(b)  For a change in a preauthorization requirement or
process that removes a service from the list of health care services
requiring preauthorization or amends a preauthorization
requirement in a way that is less burdensome to enrollees or
participating physicians or providers, a health maintenance
organization shall, in accordance with Section 843.3481:
(1)  provide written notice of the change in the
preauthorization requirement and the date and time the change goes
into effect to each enrollee and each participating physician and
provider in the health maintenance organization's network who
provides the health care service; and
(2)  disclose the change and the date and time the
change goes into effect in the health maintenance organization's
newsletter or network bulletin, if any, and on the health
maintenance organization's Internet website [not later than the
fifth day before the date the change takes effect].
(c)  Not later than the fifth day before the date a new or
amended preauthorization requirement takes effect, a health
maintenance organization shall update its Internet website to
disclose the change to the health maintenance organization's
preauthorization requirements or process and the date and time the
change is effective in accordance with Section 843.3481.
(d)  A new or amended preauthorization requirement imposed
by a health maintenance organization must take effect on a business
(e)  The provisions of this section may not be waived by
SECTION 4.  Subchapter J, Chapter 843, Insurance Code, is
amended by adding Section 843.3484 to read as follows:
Sec. 843.3484.  ADDITIONAL ENFORCEMENT FOR PREAUTHORIZATION
VIOLATION.  (a)  In addition to any other penalty or remedy provided
by law and if the commissioner determines that a health maintenance
organization has violated Section 843.348, 843.3481, or 843.3482,
the commissioner shall issue a notice of the violation to the health
maintenance organization and order the health maintenance
organization to submit a corrective action plan to the department.
(1)  indicate the form and manner in which the
corrective action plan must be submitted to the department; and
(2)  clearly state the date by which the health
maintenance organization must submit the plan.
(b)  A health maintenance organization that receives a
notice under Subsection (a) shall, on or before the date described
(1)  submit a corrective action plan in the form and
manner prescribed by the notice; and
(2)  as soon as practicable after submission of a
corrective action plan under Subdivision (1), act to comply with
(c)  A corrective action plan submitted to the department
(1)  a detailed description of the corrective action
the health maintenance organization will take to address each
violation identified by the commissioner and included in the notice
provided under Subsection (a); and
(2)  a date by which the health maintenance
organization will complete the corrective action described by
(d)  In addition to any other penalty or remedy provided by
law, the commissioner shall impose an administrative penalty under
Chapter 84 on a health maintenance organization for each violation
of this section or Section 843.348, 843.3481, or 843.3482 by the
health maintenance organization.  For purposes of determining a
penalty under Subsection (e), each day a violation continues is
considered a separate violation.
(e)  The commissioner shall set the amount of the
administrative penalty described by Subsection (d) in an amount not
(1)  for a health maintenance organization with a total
gross revenue of less than $10 million during the preceding
calendar year, $10 for each violation;
(2)  for a health maintenance organization with a total
gross revenue of $10 million or more but less than $100 million
during the preceding calendar year, $100 for each violation; or
(3)  for a health maintenance organization with a total
gross revenue of $100 million or more during the preceding calendar
year, $1,000 for each violation.
SECTION 5.  Subchapter A, Chapter 1301, Insurance Code, is
amended by adding Section 1301.011 to read as follows:
Sec. 1301.011.  EXPLANATION OF BENEFITS.  An insurer shall
provide a written explanation of benefits to an insured for a health
care service or supply submitted by a physician or health care
provider to the insurer for payment.  The explanation must include:
(1)  a plain-language description of the health care
service or supply that adequately identifies for the insured the
health care service or supply received by the insured from the
(2)  a plain-language description of each identifying
code, including a denial code, provided in the explanation of
benefits that adequately informs and defines the identifying code
SECTION 6.  Sections 1301.1351(a) and (b), Insurance Code,
are amended to read as follows:
(a)  An insurer that uses a preauthorization process for
medical care or health care services shall display in a prominent
location on or through a dedicated link that is prominently
displayed on the home page of the insurer's Internet website all
[make the] requirements and information about the preauthorization
process [readily accessible to insureds, physicians, health care
providers, and the general public by posting the requirements and
information on the insurer's Internet website].
(b)  The preauthorization requirements and information
described by Subsection (a) [must]:
(B)  formatted in a manner that is digitally
searchable and prescribed by the commissioner;
(C)  accessible to a common commercial operator of
an Internet search engine as reasonably necessary for the search
(i)  index the requirements and information;
(ii)  display the requirements and
information as a result in response to a search query initiated by a
(D)  [(A)  except as provided by Subsection (c) or
(d), conspicuously in a location on the Internet website that does
not require the use of a log-in or other input of personal
information to view the information; and
[(B)  in a format that is easily searchable and
[(2)  except for the screening criteria under
Subdivision (4)(C), be] written in plain language that is easily
understandable by insureds, physicians, health care providers, and
(2)  may not require an individual to:
(A)  establish a user account or password;
(B)  submit personal identifying information; or
(C)  overcome any other impediment to accessing
the requirements and information, including a requirement that the
individual enter a code to access the requirements and information;
(3)  must include a detailed description of the
preauthorization process and procedure; and
(4)  must include an accurate and current list of
medical care and health care services for which the insurer
requires preauthorization that includes the following information
(A)  the effective date of the preauthorization
(B)  a list or description of any supporting
documentation that the insurer requires from the physician or
health care provider ordering or requesting the service to approve
(C)  the applicable screening criteria, which may
include Current Procedural Terminology codes and International
Classification of Diseases codes; and
(D)  statistics regarding the insurer's
preauthorization approval and denial rates for the medical care or
health care service in the preceding calendar year, including
statistics in the following categories:
(i)  physician or health care provider type
(iii)  reasons for request denial, which may
not be in the form of alphanumeric codes;
(v)  denials overturned on internal appeal;
(vi) [(v)]  denials overturned by an
independent review organization;
(vii)  approvals and denials of expedited
[(vi)]  total annual preauthorization
requests, approvals, and denials for the service; and
(ix)  average and median times that elapsed
between the submission of a preauthorization request and a decision
by the insurer, sorted by standard preauthorization requests and
expedited preauthorization requests.
SECTION 7.  Section 1301.1352, Insurance Code, is amended by
amending Subsections (a), (b), and (c) and adding Subsection (c-1)
(a)  Except as provided by Subsection (b), not later than the
60th business day before the date a new or amended preauthorization
requirement takes effect, an insurer that uses a preauthorization
process for medical care or health care services shall, in
accordance with Section 1301.1351:
(1)  provide written notice of the new or amended
preauthorization requirement and the date and time the requirement
goes into effect to each insured and each participating provider in
the insurer's network who provides the medical care or health care
service subject to the requirement; and
(2)  disclose the new or amended requirement and the
date and time the requirement goes into effect in the insurer's
newsletter or network bulletin, if any, and on the insurer's
(b)  For a change in a preauthorization requirement or
process that removes a service from the list of medical care or
health care services requiring preauthorization or amends a
preauthorization requirement in a way that is less burdensome to
insureds, physicians, or health care providers, an insurer shall,
in accordance with Section 1301.1351:
(1)  provide written notice of the change in the
preauthorization requirement and the date and time the change goes
into effect to each insured, participating physician, and health
care provider in the insurer's network who provides the medical
care or health care service; and
(2)  disclose the change and the date and time the
change goes into effect in the insurer's newsletter or network
bulletin, if any, and on the insurer's Internet website [not later
than the fifth day before the date the change takes effect].
(c)  Not later than the fifth day before the date a new or
amended preauthorization requirement takes effect, an insurer
shall update its Internet website to disclose the change to the
insurer's preauthorization requirements or process and the date and
time the change is effective in accordance with Section 1301.1351.
(c-1)  A new or amended preauthorization requirement imposed
by an insurer must take effect on a business day.
SECTION 8.  Subchapter C-1, Chapter 1301, Insurance Code, is
amended by adding Section 1301.1354 to read as follows:
Sec. 1301.1354.  ADDITIONAL ENFORCEMENT FOR
PREAUTHORIZATION VIOLATION.  (a)  In addition to any other penalty
or remedy provided by law and if the commissioner determines that an
insurer has violated Section 1301.135, 1301.1351, or 1301.1352, the
commissioner shall issue a notice of the violation to the insurer
and order the insurer to submit a corrective action plan to the
(1)  indicate the form and manner in which the
corrective action plan must be submitted to the department; and
(2)  clearly state the date by which the insurer must
(b)  An insurer that receives a notice under Subsection (a)
shall, on or before the date described by Subsection (a)(2):
(1)  submit a corrective action plan in the form and
manner prescribed by the notice; and
(2)  as soon as practicable after submission of a
corrective action plan under Subdivision (1), act to comply with
(c)  A corrective action plan submitted to the department
(1)  a detailed description of the corrective action
the insurer will take to address each violation identified by the
commissioner and included in the notice provided under Subsection
(2)  a date by which the insurer will complete the
corrective action described by Subdivision (1).
(d)  In addition to any other penalty or remedy provided by
law, the commissioner shall impose an administrative penalty under
Chapter 84 on an insurer for each violation of this section or
Section 1301.135, 1301.1351, or 1301.1352.  For purposes of
determining a penalty under Subsection (e), each day a violation
continues is considered a separate violation.
(e)  The commissioner shall set the amount of an
administrative penalty described by Subsection (d) in an amount not
(1)  for an insurer with a total gross revenue of less
than $10 million during the preceding calendar year, $10 for each
(2)  for an insurer with a total gross revenue of $10
million or more but less than $100 million during the preceding
calendar year, $100 for each violation; or
(3)  for an insurer with a total gross revenue of $100
million or more during the preceding calendar year, $1,000 for each
SECTION 9.  The following provisions of the Insurance Code
(1)  Sections 843.3481(c) and (d);
(3)  Sections 1301.1351(c) and (d); and
SECTION 10.  Sections 843.114 and 1301.011, Insurance Code,
as added by this Act, apply only to a health benefit plan delivered,
issued for delivery, or renewed on or after January 1, 2026.
SECTION 11.  A health maintenance organization and insurer
shall update the health maintenance organization's or insurer's
Internet website to conform with Section 843.3481 or 1301.1351,
Insurance Code, as amended by this Act, as applicable, not later
SECTION 12.  Sections 843.3481, 843.3482, 1301.1351, and
1301.1352, Insurance Code, as amended by this Act, and Sections
843.3484 and 1301.1354, Insurance Code, as added by this Act, apply
only to a request for preauthorization of medical care or health
care services made on or after January 1, 2026, under a health
benefit plan delivered, issued for delivery, or renewed on or after
that date.  A request for preauthorization of medical care or health
care services made before January 1, 2026, or on or after January 1,
2026, under a health benefit plan delivered, issued for delivery,
or renewed before that date is governed by the law as it existed
immediately before the effective date of this Act, and that law is
continued in effect for that purpose.
SECTION 13.  This Act takes effect September 1, 2025.