The Texas House Committee on Insurance met on March 23 to take up a number of bills. This report covers discussions on HB 2090 (Burrows), HB 2142 (Vo), and HB 1919 (Harris).

This report is intended to give you an overview and highlight of the discussions on 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.

Vote Outs

  • HB 205 (Ortega) on amusement park rides, voted out 8-0
  • HB 1787 (Lambert) technical clean up for loaner cars, voted out 8-0
  • CSHB 113 (Oliverson) peer-to-peer car sharing, CS matches closer to model, clarifies GM request, and gives TDI option to promulgate rules, voted out 8-0
  • CSHB 1033 (Oliverson) drug pricing transparency clean up, moves data collection to DSHS, voted out 8-0
  • CSHB 1689 (Oliverson) credit for reinsurance, voted out

Bills on Agenda

HB 2090 (Burrows) Relating to health care cost disclosures by health benefit plan issuers and third-party administrators

  • Burrows – Medical inflation has been two to five times CPI since 1980, part of issue is the lack of competition on price
  • White House published its final rule of health care price transparency last year, requires publication of information on out-of-pocket costs
  • Bill will allow consumers to be aware of how much care will cost prior to treatment
  • Requires that third party administrators provide cost information to enrollees through an online tool
  • Also requires plans to disclose pricing information in three machine readable files for researchers to create solutions that will allow patients to make price informed decisions

Doug Aldine, Attorney – For

  • Important that disclosures are subject to any financial assistance application
  • Majority of claims are subject to hospitals financial assistance policies
  • Bill is more designed for network arrangements

Cameron Duncan, Texas Hospital Association – Against

  • Bill is almost the same as federal price transparency rules that are set to go into effect next year
  • Would require mass publication of privately negotiated rates
  • Many hospitals and health plans have already implemented cost estimation tools
  • Oliverson – Supreme court has already ruled on this issue, we are just asking that information is provided ahead of time so that patients can price shop
    • Negotiated rates are indicative of nothing besides deal that hospital has negotiated with a payer
  • Oliverson – But that is the number that the patients need to have
    • Consumer needs to have the information with regards to their plan, contracted rate is not always indicative of what consumer pays, will drive down reimbursement to hospitals at impediment to quality of care

Jamie Dudensing, Texas Association of Health Plans – On

  • Believes that bill will create a race to the highest rates
  • Does not want rules put into legislation, would rather just reference it
  • Goal is to not create two separate systems, one at state level and one at federal level
  • Supports empowering consumers with information to shop prices
  • Changes to state law will prevent them from fully utilizing the benefit of federal rules

Charles Miller, Texas 2036 – For

  • 56% of families with insurance have skipped or delayed care due to costs
  • Families must have information upfront so that there is not a barrier to care
  • Having information out there is a large part of bringing down the cost of care

Daniel Chepkauskas, Patient Choice Coalition – For

  • Vital for health care providers to compete, but also for patients
  • Patients are typically steered to stay in network but do not know the real costs
  • Hospitals that are out of network cannot compete without this disclosure of price information

Carl Isett, Texas Association of Benefit Administrators – On

  • Price of health care insurance is directly related to price of health care
  • These costs are relevant to those who are shopping for care
  • Has some technical issues which have already been expressed
  • Burrows – Want to make sure that we can codify this in statute to keep gains from federal executive order

HB 2090 left pending

HB 2142 (Vo) Relating to preauthorization requirements and examinations of certain health benefit plan issuers

  • Rep. Israel lays out bill for Rep. Vo
  • Physicians have expressed desire for TDI to regularly examine insurer compliance with statutory timelines
  • Would require examinations of Insurers once a year and whenever the commissioner deems it necessary at the expense or the insurer or HMO

Jamie Dudensing, Texas Association of Health Plans – Against

  • Opposed to new unfunded government mandates
  • Additional annual exams would be extremely expensive and would not benefit the state
  • Already required to be examined every three years, very burdensome and expensive
  • No state has ever done this, and it has never been recommended by those at national level
  • Also does nothing to decrease health care costs, only increases costs and creates a burdensome process
  • Israel – What is so sophisticated about the TDI complaint system?
    • It is very sophisticated on how it flags alerts on certain types of complaints
  • Paul – Do you know how much this would increase costs?
    • Would be a more appropriate question for TDI and how they would plan to implement the process, also creates a barrier for companies to come into the state

Luke Bellsnyder, Texas Department of Insurance – Resource

  • Oliverson – Walk us through the process from TDI’s prospective on how they maintain compliance
    • Every three years plans must go through an exam where all compliance is examined in house
  • Oliverson – How many complaints do you receive relating to preauthorization requirements
    • Complaints are often presented but not common with respect to this issue
  • Oliverson – Is TDI able to take enforcement action on self-funded plans with respect to preauthorization?
    • No, only on our fifteen percent of the regulated market
  • Paul – If you went from a three year to a one year what burden would that put on TDI?
    • This program charges the companies for the hours worked, estimates that it would take about 135 hours per exam, charges $48 per hour

Zeke Silva, Texas Medical Association – For

  • 85% of physicians report that prior authorizations have led to delays in care
  • Believes that oversight is important to consumer protection
  • Staffs are overburdened, process cannot be completed quick enough leading to having to send patients to emergency rooms to complete procedures
  • Process is mostly an administrative burden
  • Israel – Do you ever have to send patients to make complaints regarding this issue?
    • Patients sense the delay, but they are sheltered from the process and do not understand why the delay is happening, transparency is critical
  • Paul – If it were an automated system would it help you as a provider?
    • Potentially, currently it is anything but automated
  • Paul – Does the doctor have to go through the process or is it a staffer?
    • It starts with the staffer, but at the end of the process physicians often must intervene

Rep. Israel closes

  • It is a concern that many doctors are reluctant to complain

HB 2142 left pending

HB 1919 (Harris) Relating to prohibited practices for certain health benefit plan issuers and pharmacy benefit managers

  • CS laid out
  • PBM’s are middlemen that refer patients to a pharmacy, practices have removed the consumer from the process
  • Conflict of interest is forcing mom and pop pharmacies to shutter
  • Bill brings competition back into the market and restores patient choice

John Rogers, Rogers Pharmacies – For

  • PBMs have grown vastly in wealth and power, three organizations control 76% of all transactions
  • Conflict of interest decreases transparency and competition
  • Patients should not be steered to use certain pharmacies where they may not receive the same level of care
  • 79% of pharmacies report that they had patients sent to PBM controlled businesses
  • Gonzalez – Who is transferring the prescriptions?
    • In different cases it is the PBM calling, or it is our staff that is requested to transfer the prescription
  • Paul – If a patient were to transfer why would that be a problem to you?
    • Does not have a problem with that, many times patients are sent a confusing letter that creates a misunderstanding on where they can fill prescriptions, if in the same network there is no price difference

Jamie Dudensing, Texas Association of Health Plans – Against

  • Opposed to policy that is aimed at driving up the cost of healthcare to help independent pharmacies
  • Independent pharmacies have increases in numbers and have also retained their profitability levels
  • Opposed to prohibiting financial incentives for advising consumers to go to the lowest cost pharmacy

Debbie Garza, Texas Pharmacy Association – For

  • Large PBM’s have a monopoly on the payment side and own the largest mail order pharmacies in the country
  • PBM’s limit which pharmacies can distribute specialty medications
  • Independent pharmacies have seen a large increase in marketing tactics to steer patients
  • Many patients have no recollection of agreeing to the transfer

Melodie Shrader, Pharmaceutical Care Management Association – Against

  • Believes that bill is anti-consumer and anti-small business
  • Takes a toll on small businesses by leading their employees to higher prices that affect not only the patient but also the owner of the business that provides the policy

Miguel Rodriguez, Texas Pharmacy Business Council – For

  • PBM’s have become vertically integrated enterprises
  • PBM’s steer the patient from pharmacy of choice to the ones they own
  • Three of the five highest grossing pharmacies are PBM owned
  • Bill would not prevent patient choosing to transfer their prescription but rather the PBM from transferring the prescription

Jenny Blakely, OPIC – Resource

  • Israel – Does the average citizen have the ability to register a complaint with regards to this matter?
    • As the bill is laid out at the moment OPIC has no concerns, currently these types of complaints would go to TDI, if it is a specific complaint OPIC would refer to TDI for review
  • Israel – Has OPIC done any awareness with regard to this issue?
    • Cannot testify to that but agrees that this access would be favorable to the consumer

Rep. Harris closes

  • A successful free market depends on competition, currently there is a monopoly
  • In my district, there is not high growth in the numbers of independent pharmacies
  • In favor of companies creating incentives and making money but does not want oppressive tactics to be used that creates conflicts of interest

HB 1919 left pending