Relating to health benefit plan preauthorization requirements for certain health care services and the direction of utilization review by physicians, the official text

H.B. No. 3812

AN ACT

relating to health benefit plan preauthorization requirements for

certain health care services and the direction of utilization

review by physicians.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Section 4201.152, Insurance Code, is amended to

read as follows:

Sec. 4201.152. UTILIZATION REVIEW UNDER DIRECTION OF

PHYSICIAN. A utilization review agent shall conduct utilization

review under the direction of a physician licensed to practice

medicine in this state. The physician may not hold a license to

practice administrative medicine under Section 155.009,

Occupations Code.

SECTION 2. Section 4201.651(a), Insurance Code, is amended

to read as follows:

(a) In this subchapter:

(1) "Affiliate" has the meaning assigned by Section

823.003.

(2) "Preauthorization"[, "preauthorization"] means a

determination by a health maintenance organization, insurer, or

person contracting with a health maintenance organization or

insurer that health care services proposed to be provided to a

patient are medically necessary and appropriate.

SECTION 3. Section 4201.653, Insurance Code, is amended by

amending Subsections (a) and (b) and adding Subsection (a-1) to

read as follows:

(a) A health maintenance organization or an insurer that

uses a preauthorization process for health care services may not

require a physician or provider to obtain preauthorization for a

particular health care service if, in the most recent one-year

[six-month] evaluation period, as described by Subsection (b):

(1) [,] the health maintenance organization or

insurer, including any affiliate, has approved or would have

approved not less than 90 percent of the preauthorization requests

submitted by the physician or provider for the particular health

care service; and

(2) the physician or provider has provided the

particular health care service at least five times during the

evaluation period.

(a-1) In conducting an evaluation for an exemption under

this section, a health maintenance organization or insurer must

include all preauthorization requests submitted by a physician or

provider to the health maintenance organization or insurer, or its

affiliate, considering all health insurance policies and health

benefit plans issued or administered by the health maintenance

organization or insurer, or its affiliate, regardless of whether

the preauthorization request was made in connection with a health

insurance policy or health benefit plan that is subject to this

subchapter.

(b) Except as provided by Subsection (c), a health

maintenance organization or insurer shall evaluate whether a

physician or provider qualifies for an exemption from

preauthorization requirements under Subsection (a) once every year

[six months].

SECTION 4. Section 4201.655, Insurance Code, is amended by

amending Subsections (a) and (b) and adding Subsection (b-1) to

read as follows:

(a) A health maintenance organization or insurer may

rescind an exemption from preauthorization requirements under

Section 4201.653 only:

(1) during January [or June] of a [each] year

beginning on or after the first anniversary of the last day of the

most recent evaluation period for the exemption;

(2) if the health maintenance organization or insurer

makes a determination, on the basis of a retrospective review of a

random sample of not fewer than five and no more than 20 claims

submitted by the physician or provider during the most recent

evaluation period described by Section 4201.653(b), that less than

90 percent of the claims for the particular health care service met

the medical necessity criteria that would have been used by the

health maintenance organization or insurer when conducting

preauthorization review for the particular health care service

during the relevant evaluation period; and

(3) if the health maintenance organization or insurer

complies with other applicable requirements specified in this

section, including:

(A) notifying the physician or provider not less

than 25 days before the proposed rescission is to take effect; and

(B) providing with the notice under Paragraph

(A):

(i) the sample information used to make the

determination under Subdivision (2); and

(ii) a plain language explanation of how

the physician or provider may appeal and seek an independent review

of the determination.

(b) A determination made under Subsection (a)(2) must be

made by an individual licensed to practice medicine in this state.

For a determination made under Subsection (a)(2) with respect to a

physician, the determination must be made by an individual licensed

to practice medicine in this state who has the same or similar

specialty as that physician. The reviewing physician may not hold a

license to practice administrative medicine under Section 155.009,

Occupations Code.

(b-1) Notwithstanding Subsection (a)(2), if there are fewer

than five claims submitted by the physician or provider during the

most recent evaluation period described by Section 4201.653(b) for

a particular health care service, the health maintenance

organization or insurer shall review all the claims submitted by

the physician or provider during the most recent evaluation period

for that service.

SECTION 5. Section 4201.656(a), Insurance Code, is amended

to read as follows:

(a) A physician or provider has a right to a review of an

adverse determination regarding a preauthorization exemption,

including a health maintenance organization's or insurer's

determination to deny an exemption to the physician or provider

under Section 4201.653, to be conducted by an independent review

organization. A health maintenance organization or insurer may not

require a physician or provider to engage in an internal appeal

process before requesting a review by an independent review

organization under this section.

SECTION 6. Section 4201.658, Insurance Code, is amended to

read as follows:

Sec. 4201.658. ELIGIBILITY FOR PREAUTHORIZATION EXEMPTION

FOLLOWING FINALIZED EXEMPTION RESCISSION OR DENIAL. After a final

determination or review affirming the rescission or denial of an

exemption for a specific health care service under Section

4201.653, a physician or provider is eligible for consideration of

an exemption for the same health care service after the one-year

[six-month] evaluation period that follows the evaluation period

which formed the basis of the rescission or denial of an exemption.

SECTION 7. Sections 4201.659(b) and (c), Insurance Code,

are amended to read as follows:

(b) Regardless of whether an exemption is rescinded after

the provision of a health care service subject to the exemption, a

[A] health maintenance organization or an insurer may not conduct a

utilization [retrospective] review or require another review

similar to preauthorization of the [a health care] service [subject

to an exemption] except:

(1) to determine if the physician or provider still

qualifies for an exemption under this subchapter; or

(2) if the health maintenance organization or insurer

has a reasonable cause to suspect a basis for denial exists under

Subsection (a).

(c) For a utilization [retrospective] review described by

Subsection (b)(2), nothing in this subchapter may be construed to

modify or otherwise affect:

(1) the requirements under or application of Section

4201.305, including any timeframes specified by that section; or

(2) any other applicable law, except to prescribe the

only circumstances under which:

(A) a [retrospective] utilization review may

occur as specified by Subsection (b)(2); or

(B) payment may be denied or reduced as specified

by Subsection (a).

SECTION 8. Subchapter N, Chapter 4201, Insurance Code, is

amended by adding Section 4201.660 to read as follows:

Sec. 4201.660. REPORT. (a) Each health maintenance

organization and insurer shall submit to the department, in the

form and manner prescribed by the commissioner, an annual written

report, for each health care service subject to an exemption under

Section 4201.653, on the:

(1) exemptions granted by the health maintenance

organization or insurer for the service;

(2) determinations by the health maintenance

organization or insurer to rescind or deny an exemption for the

service, including the number of exemptions denied or rescinded by

the health maintenance organization or insurer under Section

4201.655; and

(3) independent reviews of determinations conducted

by an independent review organization under Section 4201.656,

including:

(A) the number of determinations made by the

health maintenance organization or insurer for which a physician or

provider requested an independent review under Section 4201.656;

and

(B) the outcome of each independent review

described by Paragraph (A).

(b) Subject to this subsection, a report submitted under

Subsection (a) is public information subject to disclosure under

Chapter 552, Government Code. The department shall ensure that the

report does not contain any identifying information before

disclosing the report in accordance with Chapter 552, Government

Code.

SECTION 9. (a) The change in law made by this Act applies

only to utilization review conducted on or after the effective date

of this Act. Utilization review conducted before the effective date

of this Act 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.

(b) A preauthorization exemption provided under Section

4201.653, Insurance Code, before the effective date of this Act may

not be rescinded before the first anniversary of the last day of the

most recent evaluation period for the exemption.

SECTION 10. This Act takes effect September 1, 2025.

______________________________
______________________________

President of the Senate
Speaker of the House

I certify that H.B. No. 3812 was passed by the House on May

15, 2025, by the following vote: Yeas 116, Nays 23, 3 present, not

voting.

______________________________

Chief Clerk of the House

I certify that H.B. No. 3812 was passed by the Senate on May

27, 2025, by the following vote: Yeas 30, Nays 1.

______________________________

Secretary of the Senate

APPROVED: _____________________

Date

_____________________

Governor