Relating to billing and reimbursement for certain medical equipment, devices, and supplies provided to Medicare enrollees; creating a criminal offense, the official text

S.B. No. 1330

AN ACT

relating to billing and reimbursement for certain medical

equipment, devices, and supplies provided to Medicare enrollees;

creating a criminal offense.

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

SECTION 1. Subtitle C, Title 5, Insurance Code, is amended

by adding Chapter 566 to read as follows:

CHAPTER 566. BILLING FOR CERTAIN MEDICAL EQUIPMENT, DEVICES, AND

SUPPLIES

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 566.001. DEFINITIONS. In this chapter:

(1) "Assignment" means an agreement in which a

supplier agrees to accept the Medicare-approved amount as payment

for medical equipment or a medical device or supply.

(2) "Durable medical equipment" means medical

equipment that:

(A) can withstand repeated use;

(B) is expected to last at least three years;

(C) is primarily and customarily used to serve a

medical purpose;

(D) is generally not useful in the absence of an

illness or injury; and

(E) is appropriate for use in the home.

(3) "Enrollee" means an individual enrolled in

Medicare.

(4) "Medicare" means the health benefit coverage

provided under the Health Insurance for the Aged Act (42 U.S.C.

Section 1395 et seq.).

(5) "Nonparticipating supplier" means an entity or

person who:

(A) provides Medicare-covered durable medical

equipment, orthotic devices or supplies, or prosthetic devices or

supplies to Medicare enrollees; and

(B) is not enrolled in Medicare as a

participating supplier.

(6) "Orthotic device or supply" means:

(A) a custom-fitted or custom-fabricated medical

device designed to correct a deformity, improve function, or

relieve symptoms of a disease; or

(B) a medical supply related to a device

described by Paragraph (A).

(7) "Prosthetic device or supply" means:

(A) an artificial medical device designed to

replace all or part of a limb or internal organ; or

(B) a medical supply related to a device

described by Paragraph (A).

SUBCHAPTER B. REGULATION OF CERTAIN BILLING PRACTICES

Sec. 566.051. LIMITATIONS ON BILLING; NOTICE. (a) A

nonparticipating supplier may not charge an enrollee more than 115

percent of the Medicare-approved amount for durable medical

equipment, orthotic devices or supplies, or prosthetic devices or

supplies covered under Medicare for which the supplier has not

accepted written assignment unless:

(1) before the enrollee is billed, the enrollee agrees

in writing to pay the additional amount; and

(2) before receiving the durable medical equipment,

orthotic device or supply, or prosthetic device or supply, the

enrollee:

(A) enters into a rental payment plan; or

(B) pays the additional amount in full.

(b) A written agreement between a nonparticipating supplier

and enrollee under this section must provide notice to the enrollee

that:

(1) Medicare will reimburse 80 percent of the

Medicare-approved amount for durable medical equipment, orthotic

devices or supplies, or prosthetic devices or supplies covered

under Medicare; and

(2) a Medicare supplement benefit plan issuer is not

required to reimburse the nonparticipating supplier or enrollee for

the amount by which the charge exceeds 115 percent of the

Medicare-approved amount.

SUBCHAPTER C. ENFORCEMENT

Sec. 566.101. APPLICATION OF DECEPTIVE TRADE PRACTICES LAW.

A nonparticipating supplier who violates this chapter engages in a

false, misleading, or deceptive act or practice under Section

17.46, Business & Commerce Code.

Sec. 566.102. CRIMINAL OFFENSE. (a) A nonparticipating

supplier who intentionally violates this chapter commits an

offense.

(b) An offense under this section is a misdemeanor

punishable by a fine of not less than $500 or more than $1,000.

(c) Notwithstanding any other law, an offense under this

section may be prosecuted in:

(1) Travis County; or

(2) a county in which prosecution is authorized under

the Code of Criminal Procedure.

SECTION 2. Subchapter B, Chapter 1652, Insurance Code, is

amended by adding Section 1652.059 to read as follows:

Sec. 1652.059. REIMBURSEMENT FOR CERTAIN MEDICAL

EQUIPMENT, DEVICES, AND SUPPLIES. (a) In this section, terms

defined by Section 566.001 have the meanings assigned by that

section.

(b) A Medicare supplement benefit plan issuer is not

required to reimburse an enrollee or nonparticipating supplier for

the amount by which a charge for durable medical equipment,

orthotic devices or supplies, or prosthetic devices or supplies

exceeds 115 percent of the Medicare-allowed amount for the

equipment, device, or supply.

(c) This section does not prohibit a Medicare supplement

benefit plan issuer and a nonparticipating supplier from

negotiating a level and type of reimbursement for durable medical

equipment or orthotic or prosthetic devices or supplies.

SECTION 3. Chapter 566, Insurance Code, as added by this

Act, applies only to durable medical equipment or orthotic or

prosthetic devices or supplies sold on or after the effective date

of this Act.

SECTION 4. This Act takes effect September 1, 2025.

______________________________
______________________________

President of the Senate
Speaker of the House

I hereby certify that S.B. No. 1330 passed the Senate on

April 1, 2025, by the following vote: Yeas 31, Nays 0.

______________________________

Secretary of the Senate

I hereby certify that S.B. No. 1330 passed the House on

May 24, 2025, by the following vote: Yeas 133, Nays 0, two

present not voting.

______________________________

Chief Clerk of the House

Approved:

______________________________

Date

______________________________

Governor