Texas employers can steer workers toward higher-performing health centers and tier hospitals based on performance under new legislation passed by the state legislature. Because HB 711 is effective immediately, brokers and benefits managers can factor the legislation into their next health plans, although anti-steering and anti-tiering provisions in contracts remain in effect until the end of the year.
“House Bill 711 is a step in the right direction to fix anti-competitive practices and encourage market competition,” said Rep. James Frank, who introduced the bill. “Prohibiting certain unfair contract provisions will enable employees and employers to get the highest-quality care for their health-care dollars.”
Frank was motivated by his experience as a business owner and the increasing price of health care, which he hopes the competition will improve. Incentivizing employees to go to higher-quality hospitals will reduce hospital readmissions and mistakes that make a trip to the hospital even more costly. A family of four pays more than $22,000 in health insurance premiums each year, according to Texas Employers for Affordable Healthcare. Texas employers pay a median of 315% of Medicare reimbursement rates for hospital procedures.
Currently, if an employer wants a specific hospital to be in its insurance network, the plan must include all of the hospitals in that network, even if some are lower performing. Plans also cannot incentivize employees to go to certain hospitals over others by offering more coverage at higher-performing facilities.
HB 711 eliminates the anti-steering provision, allowing insurance plans to guide patients to a particular provider. It also gets rid of anti-tiering clauses that don’t allow insurance carriers to put providers into tiers based on outcomes or price and communicate those tiers to members. After January 1, plans can use incentives such as no deductibles or copays to steer patients to higher- quality hospitals, although it is up to employers to push for the changes.
“If employers don’t take advantage of tiering and steering, a reasonable person would ask what the rationale is for not being more fiduciary about this,” said Chris Skisak, executive director of Texas Employers for Affordable Healthcare. “The bullseye is on their back, but this legislation gives them the tool to make a change.”
Time will tell if employers and brokers take advantage of the bill, build narrower networks or steer patients.
“We are well aware of HB 711, and our only comment regarding this bill or other bills regarding steering patients always allows patients to make a choice and have a voice in their health treatment,” said Steve Love, president and CEO of the Dallas-Fort Worth Hospital Council. “Please have providers sit down at the table, discuss the concerns and be part of a workable solution before filing bills that could produce unintended consequences.”