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House Insurance met on March 7 to take invited testimony from the Health and Human Services Commission and the Department of State Health Services regarding the implementation of certain bills passed during the 87th Legislature. This report covers the following bill discussions: HB 351 (C. Bell), HB 625 (Cody Harris), HB 150 (Julie Johnson), and HB 290 (Oliverson). The notice for the hearing can be founds here. Part 1 of the hearing can be found here and part 2 here.

This report is intended to give you an overview and highlight the various topics taken up. It is not a verbatim transcript of the discussions but is based upon what was audible or understandable to the observer and the desire to get details out as quickly as possible with few errors or omissions.

 

Opening Comments

  • Chair Oliverson – Will receive an update on implementation significant bills which passed last session

 

Implementation Update of 87th Session Legislation

HB 18 87(R) (Oliverson/Kolkhorst) Relating to establishment of the prescription drug savings program for certain uninsured individuals.

Ellen Watkins, HHSC

  • Walmart has released a low-price insulin and now there is a low-price insulin and Amazon has entered this marketplace
  • Eli Lilly announced they will cut prices to some of their insulin products up to 70% starting in May
  • Changes do not fully address the issue of drug affordability
  • With the passage of HB 3026 HHSC will implement fiscally responsible program, utilizing existing prescription drug resources
  • Research indicates 98% of 200 most prescribed prescriptions are available in some form, either a manufacturer program or a discount program; makes implementing a state drug program not feasible
  • HHSC will use staff to navigate clients of existing patient assistance programs
  • HHSC will create a website and conduct outreach campaign to help people learn about the program
  • Oliverson- HB 18 was passed to create the states own prescription drug formulary for uninsured Texans
  • The formula used by the two states that have done has saved them billions

 

HB 2595 87(R) (Price/Nelson) Relating to a parity complaint portal and educational materials and parity law training regarding benefits for mental health conditions and substance use disorders to be made available through the portal and otherwise; designating October as mental health condition and substance use disorder parity awareness month.

Jole Schwartz, HHSC

  • Established a liaison with TDI through a formal letter of appointment to chief deputy commissioner
  • Collaborated with TDI to develop educational materials and training given to the public; finalized in July 2022
  • Collaborated with TDI for an annual report to legislature and public report about parity mental health issues; Published in December 2022
  • Oliverson – Do you think we are there yet or is there still work to be done?
    • The challenge is to make sure people understand what it is but they have all the tools they need

 

 

SB 827 87(R) (Kolkhorst/Lucio III) Relating to health benefit plan cost-sharing requirements for prescription insulin. 11:50

Priscilla Parrilla, HHSC

  • Bill affected Children’s Healthcare Program CHIP
  • The bill reduced copays for members who are above 150% of the federal poverty level and to name brand insulin drugs; reduced from $35 to $25
  • Prepared a state plan to do update the insulin policies and it was approved in December; currently preparing for implementation
  • Implementation will happen June 1st of 2023
  • Organizations must include 1 insulin from each therapeutic class; were fully compliant before this was applied
  • Oliverson – The regulations only effect the fully insured market?
    • Correct only CHIP

 

HB 1033 87(R) (Oliverson/Hancock) Relating to prescription drug price disclosure; authorizing a fee; providing an administrative penalty.

Tim Stevenson, DSHS

  • Program was transitioned to a live online system and a fee was established for penalties if drug manufacturers did not report
  • They are required to report over 15% price increase in one year and 40% over a three-year period
  • 483 manufacturers are estimated to need to report on 25,000 prescription drugs
  • Oliverson – Has compliance been good?
    • Fairly good; Last year 5 have not reported 6 have not paid out of over 400
  • Oliverson – Can you give them a list? Members on the committee would want to know which companies
    • Can provide it to them
  • Oliverson – Surprised to hear that there are many drugs increasing more than 15% in one year
    • In 2022 there were 84 price reports that hit that number and 42 so far this year that have hit that level
  • Oliverson – Everybody in this committee would like a copy of the report showing which drugs have increased by or above 15% and the reasons why

 

New Bills on Notice

HB 351 (C. Bell) Relating to the provision of workers’ compensation insurance and group accident and health insurance together in a packaged plan.

  • Bell- Allows worker compensation companies to provide a package that also includes healthcare coverage
  • Allows the employer to give the employee a chance to purchase gap coverage that insurance doesn’t usually cover
  • Does not seek to open the worker compensation statute; just to provide wider coverage
  • Johnson – Does the bill contemplate where health insurance benefits are rolled into the comp system rules?
    • Bell – The way the bill is drafted currently facilitates that; the ultimate intent is to have the gap coverage be a traditional plan
    • If a company is offering healthcare and the employee also has access to comp insurance, there is currently no way for them to efficiently put the two together
  • Johnson – Are you trying to create a super subrogation right for the health plan coverage and care they receive by lumping in it with a comp claim?
    • Bell – Does not see it as being lumped in
  • Johnson – You are not trying to prohibit an employee from using healthcare coverage if they are injured on the job?
    • Bell – If they are injured on the job, they will use the workers compensation and this bill does not address that at all
    • It might address if that employee waits several days to talk about getting coverage and instead is allowed to go to the doctor without forfeiting future coverage
  • Johnson – Thinks that is a good idea and bundling them will help with rates
  • Johnson – Is there a particular scenario that led to you wanting to make this change?
    • Bell – As an employer Bell sees these problems are seen often and this bill allows more flexibility
  • Johnson – What would you recommend if there is confusion for employees on where to go and if you’re an employer on what to do?
    • Bell – That confusion and conflict already exists; the bill does not speak to the knowledge of going to comp or health coverage
    • With this if someone goes to health coverage and finds it can be a comp claim then it rolls back into the comp process
  • Johnson – If there was a concern to tweak the language to make sure there is not extra confusion are you open to that?
    • Bell – Would want to see where the tweaks would be made but doesn’t think the bill even contemplates anything that would cause confusion
  • Oliverson – This is permissive nor a mandate but just if the employer wanted to bundle the two together, so this essentially becomes one product offered by one company?
    • Bell – It seeks to create the ability for an entity to provide comp compensation to partner with someone already providing healthcare coverage
    • Just to create the opportunity for already existing entities to work together

 

Lee Ann Alexander, American Property Casualty Insurance Association – Opposed

  • People are not required to subscribe to comp coverage in Texas and can easily find product combinations they want
  • A comp coverage company can already sell different health coverage policies so a bill putting it into statute is not required
  • APCI represents 60% of the property and casualty insurance in the US and over 80% in Texas
  • The bill fails to recognize the differences between comp provided and health insurance provided policies
  • Creates confusion and ambiguity for injured workers
  • Would interfere with data integrity and use of experience rating
  • May allow employers with poor safety records to hide compensation costs and shift them to other employers
  • The bill functions as what is known as 24/7 care and ideas like this have never been pursued due to the conflicts it creates
  • Possibility of federal preemption from ERISA because once the two are combined it is not safe from preemption
  • Happy to continue discussing it but there is no way to fix it

 

  1. Bell closes
  • Bell – Comp is in many cases required under state law, so it is not the case that people always get to choose not to do it
  • Bill does not in any form or fashion seek to merge workers compensation and healthcare
  • Unaware of any workers comp entity that has offered 24/7 coverage and has been doing it since 83’
  • Looking to expedite care and creative solutions are what we are looking for

 

HB 351 is left pending

 

HB 625 (Cody Harris) Relating to copayments required by a health maintenance organization or preferred provider benefit plan for visiting physical therapists.

  • Cody Harris- physical therapists are still categorized as specialists and not primary providers meaning that Texans still have to pay exorbitantly high prices
  • Physical therapists will be added to the list of primary providers which reduces copay costs
  • This same bill passed unanimously out of this commission in 2021

 

Mike Geelhoed, Texas Physical Therapy Association – For

  • Many patients have such high copays they do not finish their physical therapy treatments after intensive surgeries; causes them to go back to the hospital
  • Higher rate of patients needing opioids if they do not attend physical therapy
  • Massive amount of research supporting physical therapy as the best method of recovery
  • Oliverson – Would this bill change the cost sharing requirements when a physical therapist is ordered in post operation care?
    • Not looking for two-tiered system; evidence for at least San Antonio 30-50% of people using the direct access legislation have PT be their first point of contact
  • Oliverson – So you would want to be treated as a primary provider even if the services were ordered in a post operation context?
    • Correct but what they are asking is not to be considered as a specialist provider
  • Oliverson – Sometimes you will be the primary provider and then other times it will be the result from a referral making you a specialist meaning it is a two-tiered system?
    • Their concern is the financial barrier and to avoid physical therapy visits costing extensive amounts
  • Oliverson – So if someone has physical therapy for longer than 10 days then would the reduced cost apply to say a 2-month period?
    • Correct they would be placed under a different copay system
  • Oliverson – So this is a universal reclassification of physical therapists regardless of the reason for treatment?
    • Correct
  • Paul – So you want to be the primary care physician so that somebody would see a physical therapist instead of a doctor?
    • Just asking to be classified under the copay system
  • Paul – What is the difference between a primary care doctor and you?
    • About 50%; $20 physician and $40 physical therapist but the therapist has to be seen 6-10 times usually

 

Matt Abel, Texas Association of Business – Opposed

  • Took a poll of its members and found that offering healthcare benefits is extremely important to retain and attract employees; 87% of employees said costs are rising too high
  • Overwhelming majority of the business community wants to stand against the cost increase of healthcare plans
  • Concerned about changing the status of a specialist to a primary provider; it would reduce and restrict employers and increase the cost of healthcare
  • Increase the cost of premium due to the change in primary care
  • Removes the ability to create flexible low-cost plans
  • Cain – Say it’s 2019 and passed a law for patients to have direct access to physical therapist providers so doesn’t that make them primary care providers?
    • It does for the first 10-15 days
  • Cain – But in that situation are they not acting as primary care providers?
    • For that short duration yes

 

Steve Allens, Self – For

  • The problem is the cost
  • Shares experience of a 16-year-old patient who needed a subsequent surgery due to not being able to pay for consistent physical therapy
  • Cortez – Thanks him for coming out and speaking in support

 

Blake Hutson, Texas Association of Health Plans – Opposed

  • Companies don’t set lower copay because of mandates but because it is what people want
  • There are over 100 plans to flexibly help people
  • This mandate will start to erode this system
  • Look at other states and nobody else has primary care with less than $50 copay because it starts the breakdown of the system because of sharing primary care costs
  • The evidence is really clear showing that this is a negative thing that limits the system
  • The law that passed previously had nothing to do with making physical therapists primary care; primary care doctors are trained to cover a large array of problems that others miss
  • Oliverson – Only talking about copays and not the overall cost so what are the other factors?
    • About $146 was the average billed amount and there are a number of plans with no copays at all
  • Oliverson – How does a plan define a primary care provider vs. a specialist?
    • Even after the 2019 law you still have to have a referral for physical therapists due to licensing
  • Oliverson – So in a health plan in 2023 after the 2019 law that a physical therapist would still need a referral?
    • For an HMO product yes
  • Oliverson – How does an insurance plan define primary care provider?
    • Nothing in the 2019 law says that physical therapists became primary care providers
    • There is a difference between HMO and PPO
    • Can get the definition to them

 

HB 625 is left pending

 

HB 150 (Julie Johnson) Relating to prohibiting oral releases for automobile insurance claims. 1:24:00

  • Julie Johnson- Not all carriers document settlements in writing and give an oral release
  • Convinces people into insurance claims that does not cover all of their losses

 

Ware Wendell, Texas Watch – For

  • Shares the story of an 18-year-old who was told she could be given one price and they weren’t sure they could offer it again only hours after the accident later finding out she was severely underpaid
  • If someone is undercompensated, then everyone ends up paying the cost due to taxpayers many times needing to pay the tab that isn’t covered
  • Paul – What was the case where a judge said it was ok for oral releases?
    • One case in 2016 where a court said oral releases would be enforceable

 

Beamen Floyd, Texas Coalition for Affordable Insurance Solutions – Opposed

  • A company survey showed that oral release ended with customer satisfaction
  • No pattern of complaint data related to oral releases
  • There is a catch-all that shows that any settlement deemed not good enough by the commissioner could be changed

 

Ann Thomas, Self – For

  • Shares personal story of car accident where insurance company did an oral agreement within less than 24 hours after a serious accident with serious injuries; company only offered $2,000 and son almost fell for it
  • Johnson – Thanks her for the effort to get there and support the bill

 

Jon Schnautz, National Association of Mutual Insurance Companies – Opposed

  • Some of their companies do you verbal releases to settle claims; mostly 3rd party auto claims
  • Circumstances where insures see value is claims where liability is clear and damages is clear
  • Party that’s not at fault claims get settled quicker, party is at fault claims get settled faster
  • Gilbert case from 2016 decision delt with enforceability of verbal releases in an auto claim; that case did not create the ability to use an oral release; what the case acknowledged was that most contracts in Texas do not have to be in writing; there Ch. 2601 of the business and commerce code list contracts that can only be enforced in writing
  • Happy to participate in conversations; feel like blanket prohibition on all verbal releases on auto claims is not the right answer to what the problem may be
  • Oliverson- Is there a value to a cooling off period, do your companies have problem with a mandatory cooling off period, like you could approach a party to attempt to settle a claim for a certain period, it seems disingenuous to hurry to handle a claim?
    • My conversations with our members were along the same lines, using it that quickly was not in the practice of doing; in the specific Gilbert case that period was 8 days, I don’t know if that’s too soon or not, but we are happy to engage in that conversation
  • Oliverson- I wonder whether that most consumers recognize that this is a binding decision you’re making and it’s not in writing?
    • To make an agreement enforceable the person should have to be told something along those lines; not suggesting every person should settle claims verbally, the bill is more about whether you should be able to do that
  • Oliverson- My fear is the people that are most likely to be taken advantage of are the people who are least likely to understand what their rights might be; we as the state must have an interest in, is protecting consumers

 

Laura Tamez, Texas Trial Lawyers Association – For

  • If we as Texas are required to read and sign auto policy, then a release of all claims should be in writing as well
  • The expeditiousness and efficiency for pushing policy are as simple as purchasing on an app or signing on DocuSign
  • Equally as expeditions could be the written release of all claims
  • Feel its in the best interest of both parties if insurance companies put it in writing
  • Oliverson- Are there other circumstances your aware of where a legal document can be executed without somebody having a physical copy and signing it?
    • In my 27 years of my practice, there has never been a time we didn’t have a client sign a document
  • Oliverson- In healthcare I could never do that, there are many documents I would have to sign

 

Rep. Julie Johnson closes

  • Its good public policy to require a written release
  • Believe that constitutes that chose to represent themselves deserve the same protections

 

HB 150 is left pending

 

HB 290 (Oliverson) Relating to multiple employer welfare arrangements.

  • Oliverson- Health care becomes more expensive each year and health insurance for employers becomes increasingly unaffordable
  • Multiple Employer Welfare Agreements (MEWA) are options for small employers to band together and provide coverage across a group of separate companies
  • This bill seeks to expand the accessibility of MEWAs to more groups
  • Bill seeks to address and remove some restrictions that make MEWAs less accessible to certain trade groups
  • Bill removes requirement that MEWAs have to have members in same geographical area or profession/industry
  • Removes the requirement that business must have been operating for 2 years before entering a MEWA and allows self-employed individuals to be included
  • For the expanded MEWAs that don’t meet traditional definition there will be additional consumer protection requirements i.e., network adequacy, surprise medical billing requirement
  • Bill is a refile from last session, don’t foresee any opposition

 

Eric Tidkey, Trustee for Members Health Plan MEWA – For

  • Health insurance is the number one ask for insurance benefit
  • Allowing other professional associations to join MEWA would give other Texas associations an additional option for healthcare coverage
  • Group market is the only place to get true PPO; group market is getting smaller Humana announced they are getting out of the market locally and nationally
  • The individual ACA market is either HMO or EPO

 

Rep. Oliverson – Closes

 

HB 290 is left pending