Certain health insurers are now authorized to utilize financial incentives to encourage patients to see certain physicians or health care entities – a practice referred to as steering – after the Sept. 1 effective date of a new state law.
While the steering provisions of the bill could be employed without rulemaking, the changes made to the ranking and tiering protections require the Texas Department of Insurance (TDI) to adopt rules before those provisions are implemented. The Texas Medical Association, following its advocacy to mitigate the bill’s adverse effects, is communicating with the TDI as it crafts rules guiding the ranking process.
Zeke Silva, MD, chair of TMA’s Council on Legislation, said to offset the concerning elements of the bill that became law, medicine worked with legislators throughout the session to make the final version of the bill less onerous.
“We have a lot of ranking and steering protections within the insurance code, and we were concerned this bill would essentially negate a lot of those gains over many years,” he said. “So, we were very much trying to be protective of those existing gains, in the interest of protecting our physicians from undue and burdensome oversight.”
Via enticements such as modified deductibles and copayments or other cost-sharing provisions, Senate Bill 926 allows certain state-regulated health plans, including HMOs, PPOs, and EPOs, to steer patients toward certain physicians or health care entities using criteria based on objective, verifiable, and accurate information, such as quality and cost of care.
The law explicitly prohibits an insurer from steering a patient to a certain physician or entity based solely on cost. Among other provisions, SB 926 seeks to penalize insurers who steer patients in a manner that limits medically necessary care, encourages the use of lower quality care or mispresents a physician’s quality of care or costs.
SB 926 also authorizes insurers to steer patients to certain physicians or providers it has ranked or placed into tiers that comply with certain criteria, with new review and appeal timelines compared with what Texas law previously allowed. Before a state-regulated health plan may publish a ranking or tier, for instance, it must disclose the ranking or tier of each affected physician and any methodology used and identify the products or networks the ranking or tier will be used for, at least 45 days before they go live.
If a physician identifies and submits information to the plan sufficient to establish a verifiable discrepancy, for instance, the insurer must remedy it within 30 days. However, once the ranking or tier has been published, an insurer is only required to remedy “objectively and verifiably false information contained in the ranking or classification.”
This new language replaces key protections that allowed physicians to fully appeal ranking and tiers, and because of that, TMA staff caution physicians need to be particularly aware of the changes, and a timely and attentive response could be critical when reviewing health plan releases of rankings or tiers.
Three crucial changes TMA did secure regarding the law’s steering provisions:
- Steering can’t be based solely on cost;
- Insurers can’t steer to a physician or provider just because the insurer (or its parent company) is affiliated with that physician or provider; and
- Insurers can’t steer based on subjective or biased criteria.
Additionally, under SB 926, TDI – rather than insurers – will decide which nationally recognized standards can be used in developing ranking standards.
That provision does, however, replace previous law, which specifically called for ranking to “consider the standards, guidelines, and measured prescribed by nationally recognized organizations” like the National Quality Forum, the National Committee on Quality Assurance, and the now defunct AQA Alliance. SB 926 struck language naming specific entities in favor of language potentially widening the pool of ranking criteria sources.
TMA will work to educate physicians once TDI’s criteria are finalized.
“It was really important to us physicians had the ability to know the criteria being applied, that they had the ability to respond, particularly when there are inaccuracies or discrepancies, and we wanted there to be standardization, whether that was practice guidelines from national medical specialties or standards from other respected bodies, as opposed to just being unilaterally driven by the health plans themselves,” Dr. Silva said.
Learn more about TMA’s work on insurance issues during the 2025 Texas legislative session.
Phil West
Associate Editor
(512) 370-1394
phil.west[at]texmed[dot]org
Phil West is a writer and editor whose publications include the Los Angeles Times, Seattle Times, Austin American-Statesman, and San Antonio Express-News. He earned a BA in journalism from the University of Washington and an MFA from the University of Texas at Austin’s James A. Michener Center for Writers. He lives in Austin with his wife, children, and a trio of free-spirited dogs.