SB 1811

relating to the use of extrapolation by a health maintenance
organization or an insurer to audit claims.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1.  Section 843.010, Insurance Code, as effective
April 1, 2025, is amended to read as follows:
Sec. 843.010.  APPLICABILITY OF CERTAIN PROVISIONS TO
GOVERNMENTAL HEALTH BENEFIT PLANS.  Sections 843.306(f), 843.322,
and 843.363(a)(4) do not apply to coverage under:
(1)  the child health plan program under Chapter 62,
Health and Safety Code, or the health benefits plan for children
under Chapter 63, Health and Safety Code; or
(2)  a Medicaid program, including a Medicaid managed
care program operated under Chapter 540 or 540A, Government Code,
SECTION 2.  Subchapter I, Chapter 843, Insurance Code, is
amended by adding Section 843.322 to read as follows:
Sec. 843.322.  USE OF EXTRAPOLATION PROHIBITED.  (a)  In this
section, "extrapolation" means a mathematical process or technique
used by a health maintenance organization in the audit of a
participating physician or provider to estimate audit results or
findings for a larger batch or group of claims not reviewed by the
health maintenance organization.
(b)  A health maintenance organization may not use
extrapolation to complete an audit of a participating physician or
provider.  Any additional payment due a participating physician or
provider or any refund due the health maintenance organization must
be based on the actual overpayment or underpayment and may not be
SECTION 3.  Subchapter B, Chapter 1301, Insurance Code, is
amended by adding Section 1301.0643 to read as follows:
Sec. 1301.0643.  USE OF EXTRAPOLATION PROHIBITED.  (a)  In
this section, "extrapolation" means a mathematical process or
technique used by an insurer in the audit of a preferred provider to
estimate audit results or findings for a larger batch or group of
claims not reviewed by the insurer.
(b)  An insurer may not use extrapolation to complete an
audit of a preferred provider.  Any additional payment due a
preferred provider or any refund due the insurer must be based on
the actual overpayment or underpayment and may not be based on an
SECTION 4.  The change in law made by this Act applies only
to the audit of a physician or provider under a contract with an
insurer or health maintenance organization entered into or renewed
on or after the effective date of this Act.
SECTION 5.  This Act takes effect September 1, 2025.