Amends TCA Title 8, Chapter 27 and Title 56, Chapter 7, Part 6.

This bill requires the state insurance committee, local education insurance committee, and local government insurance committee ("committees") to establish an incentive program in accordance with this bill no later than January 1, 2025. In establishing the incentive program, such committees must work with the insurance companies with which the committees have entered into contracts to provide health insurance benefits and the third-party administrator of the incentive program selected under this bill. REBATES This bill requires the incentive program to provide a rebate to this state and an individual who is insured under a state healthcare plan ("covered person") who obtains a major medical treatment or procedure covered by the person's plan at a lower cost than the average allowed amount paid by the carrier to healthcare providers for a comparable major medical treatment or procedure. The rebate must equal the full difference between the amount paid by the covered person and the average allowed amount paid by the carrier to network providers for a comparable major medical treatment or procedure. The rebate must be disbursed as follows: (1) 47.5 percent to the covered person as a cash payment, which may be done as a direct deposit, by check, or in another similar manner; and sent to the covered person within 30 days from the date on which the third-party administrator has received all invoices relating to the covered person's major medical treatment or procedure; (2) 47.5 percent to the state treasurer to be credited to the general fund within 30 days from the date on which the third-party administrator has received all invoices relating to the covered person's major medical treatment or procedure; and (3) 5 percent to the third-party administrator of the incentive program for administering the program after the third-party administrator has received all invoices relating to the covered person's major medical treatment or procedure. For purposes of this bill, a "major medical treatment or procedure": (1) Means the examination or treatment of an individual, including a medical procedure, for the prevention of illness or the correction or treatment of a physical or mental condition resulting from an illness, injury, or other human physical problem, including an emergency medical service, and that has an actual cost to a covered person of more than $500; and (2) Includes (i) hospital services; (ii) medical services that include the general and usual care and services rendered and administered by physicians, dentists, optometrists, and other healthcare entities; (iii) a prescription drug or device; and (iv) other medical services that include the provision of appliances and supplies, nursing care by a registered nurse, institutional services, physiotherapy, drugs and medications, therapeutic services and equipment, hospital beds, iron lungs, orthopedic services and appliances, and another appliance, supply, or service related to health care. INCENTIVE PROGRAM This bill requires the department of finance and administration ("department") to (i) select the third-party administrator for the incentive program established under this bill and (ii) provide notice to each covered person, not less than quarterly each year, of the incentive program established under this bill, including a brief description of the program. PROHIBITION ON PENALTIES This bill prohibits a state healthcare plan from penalizing a covered person participating in the incentive program by requiring a higher deductible or co-payment if a covered person receives a major medical treatment or procedure from an out-of-network healthcare provider. REPORTING This bill requires the committees, in collaboration with the third-party administrator of the incentive program, to submit an annual report to the speakers of each house of the general assembly, the chair of the state and local government committee of the senate, the chair of the state government committee of the house of representatives, the chair of the commerce and labor committee of the senate, and the chair of the insurance committee of the house of representatives. The report must identify the number of covered persons participating in the incentive program and the cost savings to the state healthcare plan as a result of the implementation of the incentive program. The report must be submitted no later than January 1, 2026, and no later than January 1 of each year thereafter. RULEMAKING This bill requires the department to promulgate rules reasonably necessary to carry out this bill. SHOPPING AND DECISION SUPPORT PROGRAM Present law establishes that beginning upon approval of the next health insurance rate filing on or after January 1, 2021, a carrier offering a health plan in this state must implement a shopping and decision support program that provides shopping capabilities and decision support services for enrollees in a health plan. In addition to the requirements of state law relative to enrollee price negotiation for out of pocket services, beginning on January 1, 2021, a carrier may provide incentives for enrollees in a health plan who elect to receive a comparable healthcare service from a network provider that is covered by the health plan and that is paid less than the average allowed amount paid by that carrier to network providers for that comparable healthcare service before and after an enrollee's out-of-pocket limit has been met. This bill adds language referencing the incentives provided in this bill to the above provisions, so it is clear that both the incentives and the shopping and decision support program must be implemented. ANNUAL TOTAL VALUE OF INCENTIVES Under present law, the total value of incentives offered to any one enrollee must not exceed $599 in any year. This bill clarifies that such limitation does not apply to the incentive program required under this bill. APPLICABILITY This bill takes effect January 1, 2025.