HB 19

This bill enacts the "Tennessee State Healthcare Cost Savings Incentive Program, which requires the state insurance committee, the local education insurance committee, and the local government insurance committee (""committees"") to establish an incentive program in accordance with this bill no later than January 1, 2026, to be administered by a third-party vendor with which the department o f finance and administration (""department"") has entered into a contract to provide incentives to individuals who are insured under a state healthcare plan (""enrollee"") issued, delivered, entered into, amended, or renewed on or after January 1, 2026. As u sed in this bill, a ""third-party vendor"" means a business entity with (i) a minimum of four years of experience delivering transparency and shared savings programs to a state employee or healthcare plan with at least 150, 000 subscribers; (ii) a demonstrat e d positive return on investment for state clients with at least 150, 000 subscribers; (iii) the ability to deliver shared savings programs for healthcare services and providers, within and outside of this state, and medical and prescription drug benefits; ( iv) at least 15 years of experience delivering cost and quality shopping tools; and (v) the ability to aggregate and provide cost and quality ratings for applicable shoppable services to enrollees. However, the term does not include a third-party adminis t rator of the plan. REQUIREMENTS OF VENDOR This bill requires the third-party vendor to provide each enrollee with online information on the cost and quality of healthcare services and providers, allow an enrollee to shop for healthcare services and prov iders, and reward the enrollee by sharing savings generated by the enrollee's choice of healthcare services or providers. This bill requires each contract with such third-party vendor to require the vendor to do all of the following:  Establish an internet-based, consumer-friendly platform that educates and informs enrollees about the price and quality of healthcare services and providers  Allow enrollees to shop for healthcare services and providers using the price and quality information provided on the internet-based platform  Permit an agent of the third-party vendor to provide educational materials and counseling to enrollees regarding the internet-based platform and the costs of healthcare services and providers  Identify the cost savings realized to the enrollee and this state if the enrollee chooses high-quality, lower-cost healthcare services or providers, and facilitate a shared cost savings payment to the enrollee This bill requires the amount of shared cost savings to be determined by a methodology established by the third-party vendor and the department of finance and administration, in collaboration with the committees, that must maximize value-based purchasing by enrollees based on historical claims data. At the discretion of the enrollee, the amount payable to the enrollee may be (i) credited to a qualified flexible or health benefits or savings account offered to an enrollee under a healthcare plan; or (ii) paid as a cash reimbursement by direct deposit, check, or other similar payment method. The costs to the third-party vendor for administering the incentive program must be paid to the third-party vendor out of the cost savings realized under the incentive program. This bill requires the third-party vendor to (i) administer the incentiv e program; (ii) compile a list from which an enrollee may choose high-quality, lower-cost healthcare services and providers; and (iii) make one or more agents available to counsel enrollees on the incentive program and available healthcare services and pr o viders for purposes of maximizing cost savings. Enrollees are eligible to receive an incentive under the incentive program for in-network or out-of-network healthcare services and providers if such services and providers meet the cost-effective criteria e stablished under the incentive program. REQUIREMENTS OF DEPARTMENT This bill requires the department to do all of the following:  Contract with a third-party vendor for the incentive program established under this bill in accordance with applicable state procurement requirements  Provide notice to each enrollee, not less than quarterly each year, of the incentive program established under this bill, including a brief description of the program, and the contact information of the third-party vendor for purposes of obtaining counseling and pricing in accordance with this bill. ANNUAL REPORT This bill requires the committees, in collab oration with the third-party vendor, to submit an annual report to the speakers and the chairs of legislative committees with subject matter jurisdiction over state government and insurance. The report must identify the number of enrollees participating i n 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 March 15, 2027, and no later than March 15 of each year thereafter. TENNESSEE RIGHT TO SHOP ACT This bill clarifies that the prohibition under the Tennessee Right to Shop Act, which prohibits the total value of incentives offered to any one enrollee from exceeding $599 in any year, does not apply to incentives under the incentive program described in this bill. RULEMAKING This bill requires the department to promulgate rules reasonably necessary to carry out this bill."