Relating to certain health care services contract arrangements entered into by insurers and health care providers, the official text

H.B. No. 2254

AN ACT

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

basis and that is:

(A) owned and operated by two or more physicians;

or

(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 primary 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

actually provided; or

(4) any combination of arrangements described by

Subdivisions (1) through (3).

(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

section; or

(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

network.

(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

this section:

(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;

(2) must specify:

(A) in writing if compensation is being paid

based on satisfaction of performance measures and, if so,

specifically provide:

(i) the performance measures;

(ii) the source of the measures;

(iii) the method and time period for

calculating whether the performance measures have been satisfied;

(iv) access to financial and

performance-based information used to determine whether the

physician met those measures; and

(v) the method by which the physician may

request reconsideration;

(B) that the attribution process will assign a

patient to:

(i) first the patient's established

physician, as determined by a prior annual exam or other office

visits; and

(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

coverage; and

(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

structure; and

(4) must state:

(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

applicable; and

(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

rate is shared.

(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.

______________________________
______________________________

President of the Senate
Speaker of the House

I certify that H.B. No. 2254 was passed by the House on May 1,

2025, by the following vote: Yeas 144, Nays 0, 1 present, not

voting.

______________________________

Chief Clerk of the House

I certify that H.B. No. 2254 was passed by the Senate on May

21, 2025, by the following vote: Yeas 31, Nays 0.

______________________________

Secretary of the Senate

APPROVED: _____________________

Date

_____________________

Governor