HB2254

HB2254 expressly permits preferred-provider and exclusive-provider health plans to contract directly with qualifying primary-care physicians or groups for primary health care using fee-for-service payments, risk sharing, capitation, or combinations. Capitation means a predetermined payment for a defined set of covered services over a stated period, regardless of how many services are actually provided. A qualifying physician or group does not become an insurance business merely by entering this contract. The act does not authorize global capitation arrangements and prohibits either contracting party from subcontracting. Final law, new Insurance Code 1301.0065(b), (c), (g) and (h).

The physician definition covers specialists in family medicine, general internal medicine or general pediatrics who provide first-contact care and take continuing responsibility for comprehensive care. A qualifying group regularly delivers care through two or more primary-care physicians and is either physician-owned and operated or a qualifying freestanding clinic, center or office of a nonprofit health organization certified under Occupations Code 162.001(b). The law does not extend this particular permission to every kind of provider or nonprofit facility. Final law, Section 1301.0065(a).

Participation is optional. An insurer may not discriminate against a physician or group for declining, including by lowering its fee schedule for that reason or making participation a condition of network membership. A physician or group believing this protection was violated may complain to the Texas Department of Insurance. Contracts may not discourage medically necessary services or interfere with independent medical judgment. Final law, Section 1301.0065(d)–(f).

The contract must spell out important payment terms rather than leave them implicit. Where compensation depends on performance measures, it must identify the measures, their source, the calculation method and period, access to the financial and performance information used, and a reconsideration process. Patient assignment must favor the patient’s established physician, determined through prior exams or visits; without an established relationship, the patient chooses. Final law, Section 1301.0065(f)(2)(A)–(B).

Other required terms address whether there will be a temporary payment rate while sufficient usage data are gathered; a stop-loss threshold, minimum monthly payment or physician-purchased stop-loss coverage; adjustments as patients enter or leave the assigned population; exclusion of catastrophic events from relevant cost calculations; and whether shared savings include all savings or only the amount above a threshold. These are requirements to state whether those protections or methods apply, not guarantees that every contract will include them. For capitated payments, a material increase in services or a payer’s material change to benefits must trigger an opportunity for good-faith rate renegotiation, or fee-for-service reimbursement under the contractual schedule until a revised rate is agreed. Final law, Section 1301.0065(f)(2)(C)–(4).