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HB 25-1174

Reimbursement Requirements for Health Insurers

2025 Regular Session Introduced by Judy Amabile and 18 co-sponsors

Limits insurer reimbursements to certain facilities, bans balance billing beyond in-network costs, and directs savings to health program funds and future feasibility studies.

House Second Reading Laid Over to 05/09/2025 - No Amendments
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Bill Summary · HB 25-1174

Summary — HB 25-1174: Reimbursement Requirements for Health Insurers

Status: Introduced Feb 10, 2025. House Second Reading laid over to 05/09/2025. Committee amendment (Appropriations) added an appropriation. Sponsors: Reps. Brown, Sirota, Lindsay, et al.; Sens. Bridges, Jodeh.

Purpose

To limit insurer reimbursement amounts to certain hospitals and health facilities for covered services in specified group health plans, prohibit balance billing of patients for carrier shortfalls (beyond in‑network cost‑sharing), require insurer reporting to regulators, and direct savings from reduced reimbursements to health and employee benefit uses. The bill also commissions a feasibility study on applying similar limits to local government, school district, and higher‑education group plans.

Key provisions

  • Reimbursement limits
    • Applies to the state employee group benefit plan beginning July 1, 2026, and to small‑group employer plans beginning January 1, 2027.
    • Establishes maximum payment rates for inpatient/outpatient facility services (excluding professional services) tied to defined benchmarks (e.g., Medicare/Medicaid fee schedules and an “equivalent rate” formula for certain pediatric specialty hospitals) and special rules for essential access hospitals and affiliated facilities.
  • Balance‑billing prohibition
    • Health facilities subject to the limits may not bill or collect from an enrolled person for any outstanding balance not paid by the carrier, except applicable in‑network coinsurance, copayments, or deductibles.
  • Market participation and enforcement
    • The Commissioner of Insurance may require a health facility to participate in the small‑group market; refusal can result in warning and fines.
  • Reporting and transfers of savings
    • Department of Personnel and Administration (DPA) must report annually (first due Sept 1, 2027) the calculated General Fund savings from state plan reimbursement limits and DPA’s cost to calculate those savings.
    • One‑time and ongoing transfers: the bill seeds a Health Care Reimbursement Feasibility Study Cash Fund ($500,000 in 2027 in the bill text) and directs transfers of remaining identified General Fund savings into a Group Benefit Plans Expenditure Savings Cash Fund beginning FY 2027‑28. Distribution of those funds (beginning FY 2027‑28) is specified: DPA costs, 20% to Group Benefit Plans Reserve, 60% to the Primary Care Fund, and 20% to a new Behavioral Health Safety Net Cash Fund.
  • Feasibility study
    • HCPF must study feasibility of similar reimbursement limits for school district, higher‑education, and local government group plans, collaborating with education and local affairs agencies; final report due Jan 1, 2028. A special cash fund is created to finance the study; unobligated balances revert by mid‑2028.

Fiscal impact (highlights)

  • FY 2025‑26 appropriation: $100,183 cash funds to the Department of Regulatory Agencies (Division of Insurance Cash Fund), including $60,183 reappropriated to Department of Law (0.3 FTE).
  • DORA ongoing administrative/legal/contract costs (~$100k–$250k annually per fiscal notes).
  • Estimated state savings: the fiscal notes project substantial reductions in General Fund expenditures beginning FY 2026‑27 (on the order of tens of millions — roughly $41–65 million in differing analyses), which are then reallocated per the bill’s transfer language beginning FY 2027‑28.
  • Supplier Database Cash Fund transfers to Division of Insurance Cash Fund: ~$240,732 (July 1, 2025) and ~$260,183 (July 1, 2026) per the revised fiscal note.

Who is affected

  • Insurers offering small‑group health plans and the carriers for the state employee plan (must comply with reimbursement caps and data requests).
  • Hospitals and hospital‑affiliated health facilities (subject to capped reimbursement, participation requirements, and balance‑billing limits).
  • State employees (through changes to the state group plan), small‑employer plan enrollees (balance‑billing protection), and the state budget (savings/transfers).
  • School districts, institutions of higher education, and local governments — required to provide data for HCPF’s feasibility study.

Timeline & next steps

  • Key effective dates in the bill: July 1, 2026 (state plan), Jan 1, 2027 (small group market).
  • HCPF final study due to the General Assembly by Jan 1, 2028; DPA reports on savings due Sept 1, 2027 and annually thereafter.
  • Legislative status: advanced from House Health & Human Services to Appropriations (amended), referred to House Committee of the Whole; House Second Reading currently laid over (next scheduled consideration 05/09/2025).

Compiled from official sources — confirm details with the bill’s official record.

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