Texas House bill by Rep. Hull passes both chambers to amend insurance code on physician contracts

Newly passed bill authored by State Rep. Lacey Hull seeks to regulate contracts between preferred provider plans and primary care physicians, aiming to ensure fair compensation and protect medical judgment while prohibiting certain capitation arrangements, according to the Texas Legislature website.

In the House, 60 Democrats and 84 Republicans voted in favor of the bill, with no opposition.

Meanwhile, in the Senate, 11 Democrats and 20 Republicans voted in favor, also with no opposing votes.

Lacey Hull introduced the bill in the Texas House on Thursday, Jan. 30, during the 89th regular legislative session.

Hull graduated from the University of Houston with a BS.

Hull, a Republican, was elected to the Texas State House in 2021 to represent the state’s 138th House district, replacing previous state representative Dwayne Bohac.

According to the Texas Legislature, the bill’s official text was summarized as follows: ‘Relating to certain health care services contract arrangements entered into by insurers and health care providers’.

The following is our breakdown, based on the actual bill text, and may include interpretation to clarify its provisions.

In essence, this bill amends the Insurance Code to allow preferred or exclusive provider benefit plans to contract with primary care physicians or groups for various compensation arrangements, such as fee-for-service, risk-sharing, and capitation. It clarifies that participating physicians are not considered insurers and mandates non-discrimination against those who opt out of such arrangements. Physicians can file complaints if discriminated against. Contract terms must ensure no medically necessary care is disincentivized and maintain independent medical judgment. Certain parameters for performance-based compensation and capitation are specified. Global capitation arrangements are prohibited, and subcontracting is not allowed. The bill takes effect immediately if a two-thirds majority vote is achieved; otherwise, it becomes effective Sept. 1, 2025.

The bill was co-authored by Rep. Penny Morales Shaw (Democrat – District 148).

The bill received its final legislative approval on Wednesday, May 21, and was signed into law by Gov. Greg Abbott on Friday, June 20.

Bills in Texas go through a multi-step legislative process, including committee review, debates, and votes in both chambers before reaching a final decision. Each session, there are typically thousands of bills introduced, but only a portion successfully navigate the process to become law.

You can read more about the bills and other measures here.