S.F. 2381 Section 1. Section 507B.4, subsection 3, Code 2024, is 1 amended by adding the following new paragraph: 2 NEW PARAGRAPH . v. Improper denial of claims. A health 3 carrier improperly denying claims under chapter 514M.1. 4 Sec. 2. NEW SECTION . 514M.1 Short title. 5 This chapter shall be known and may be cited as “The 6 Patient’s Right to Save Act” . 7 Sec. 3. NEW SECTION . 514M.2 Definitions. 8 As used in this chapter, unless the context otherwise 9 requires: 10 1. “Average allowed amount” means the average of all 11 contractually agreed upon amounts paid by a health benefit 12 plan or a health carrier to a health care provider or other 13 entity participating in the health carrier’s network. The 14 average shall be calculated according to payments within a 15 reasonable amount of time not to exceed one calendar year. The 16 commissioner may approve methodologies for calculating the 17 average allowed amount that are based on any of the following: 18 a. A specific covered person’s health plan. 19 b. All health plans offered in the state by a specific 20 health carrier. 21 c. Geographic area. 22 2. “Collection action” means any of the following actions 23 taken with respect to a debt for health care services purchased 24 from, or provided to a covered person by, a health care 25 provider on a date on which the health care provider was not in 26 material compliance with this chapter: 27 a. Attempting to collect a debt from a covered person or 28 a covered person’s guarantor by referring the debt, directly 29 or indirectly, to a debt collector, a collection agency, or 30 other third party retained by or on behalf of the health care 31 provider. 32 b. Suing a covered person or a covered person’s guarantor, 33 or enforcing an arbitration or mediation clause in a health 34 care provider’s contract, agreement, statement, or bill. 35 -1- LSB 1883SV (3) 90 nls/ko 1/ 13

S.F. 2381 c. Directly or indirectly causing a report to be made to a 1 consumer reporting agency. 2 3. “Collection agency” means a person that regularly 3 collects or attempts to collect, directly or indirectly, 4 debts owed, due, or asserted to be owed or due; that takes 5 assignment of debts for collection purposes; or that directly 6 or indirectly solicits for collection debts owed, due, or 7 asserted to be owed or due. 8 4. “Consumer reporting agency” means a person that, for 9 monetary fees, dues, or on a cooperative nonprofit basis, 10 regularly engages in assembling or evaluating consumer credit 11 information, or other consumer information, for the purpose of 12 providing consumer reports to third parties, and that uses any 13 means or facility of interstate commerce for the purpose of 14 preparing or furnishing consumer reports. “Consumer reporting 15 agency” does not include any person that only provides check 16 verification or check guarantee services. 17 5. “Cost-sharing” means any coverage limit, copayment, 18 coinsurance, deductible, or other out-of-pocket expense 19 obligation imposed on a covered person by a policy, contract, 20 or plan providing for third-party payment or prepayment of 21 health or medical expenses. 22 6. “Covered person” means the same as defined in section 23 514J.102. 24 7. “Debt” means an obligation or alleged obligation of a 25 consumer to pay money arising out of a transaction, whether or 26 not the obligation has been reduced to judgment. “Debt” does 27 not include a consumer debt incurred for business, investment, 28 commercial, or agricultural purposes, or a debt incurred by a 29 business. 30 8. “Debt collector” means a person employed or engaged by a 31 collection agency to perform debt collection. 32 9. “Discounted cash price” means the price an individual 33 pays for a specific health care service if the individual pays 34 for the health care service with cash or a cash equivalent. 35 -2- LSB 1883SV (3) 90 nls/ko 2/ 13

S.F. 2381 10. “Health benefit plan” means the same as defined in 1 section 514J.102. 2 11. “Health care provider” means a physician or other 3 health care practitioner licensed, accredited, registered, or 4 certified to perform specified health care services consistent 5 with state law, an institution providing health care services, 6 a health care setting, including but not limited to a hospital 7 or other licensed inpatient center, an ambulatory surgical 8 or treatment center, a skilled nursing center, a residential 9 treatment center, a diagnostic, laboratory, and imaging center, 10 or a rehabilitation or other therapeutic health setting. 11 12. “Health care services” means the same as defined in 12 section 514J.102. 13 13. “Health carrier” means the same as defined in section 14 514J.102. 15 14. “Pharmacist” means the same as defined in section 16 155A.3. 17 15. “Pharmacy” means the same as defined in section 155A.3. 18 Sec. 4. NEW SECTION . 514M.3 Health care services —— cost 19 controls. 20 1. a. All health care providers shall establish and 21 disclose the discounted cash price the health care provider 22 will accept for specific health care services. The disclosure 23 shall specify if the discounted cash price varies due to 24 different circumstances, including but not limited to the 25 day or time a health care service is provided, the office or 26 location at which the health care service is provided, how 27 quickly an individual pays the discounted cash price for a 28 health care service the individual received, the income level 29 of the individual who received the health care service, or 30 the ancillary services or amenities provided to an individual 31 at the same time the health care service is provided. The 32 discounted cash price shall be available to all covered persons 33 and to all uninsured individuals. 34 b. A health care provider shall post all discounted cash 35 -3- LSB 1883SV (3) 90 nls/ko 3/ 13

S.F. 2381 prices on the health care provider’s internet site in a 1 manner that is easily accessible to the public. A health care 2 provider shall update any change in a discounted cash price 3 within ten calendar days of the change, and shall review each 4 discounted cash price at least annually. 5 c. (1) During the appointment scheduling process, and any 6 intake process prior to the provision of a health care service, 7 covered persons and uninsured individuals shall be informed 8 of their right to pay for the health care service via the 9 discounted cash price. 10 (2) During the appointment scheduling process, and any 11 intake process prior to the provision of a health care service, 12 a covered person shall be advised that they qualify for a 13 deductible credit if they have not exceeded their deductible to 14 date, and all of the following are true: 15 (a) The covered person pays the discounted cash price for 16 the health care service. 17 (b) The discounted cash price is below the average allowed 18 amount paid by the health carrier to network providers for a 19 comparable health care service that the covered person will 20 receive. 21 d. A health care provider shall not enter into a contract 22 that prohibits the health care provider from offering a 23 discounted cash price below the contracted rates the health 24 care provider has with a health carrier, or that prohibits the 25 health care provider from disclosing the health care provider’s 26 discounted cash price under paragraph “b” . 27 e. A covered person’s out-of-pocket pricing for each 28 prescription drug on a health carrier’s formulary shall be 29 available to a health care provider via an easily accessible 30 and secure internet site hosted by the health carrier at the 31 point the health care provider prescribes prescription drugs 32 to the covered person. 33 f. A health care provider shall provide an individual with 34 an itemized list of all health care services provided to the 35 -4- LSB 1883SV (3) 90 nls/ko 4/ 13

S.F. 2381 individual, a statement that the individual paid out-of-pocket 1 for the health care services, and a statement that the health 2 care provider will not make a claim against a health carrier 3 for payment for the health care services provided to the 4 individual if the individual is a covered person. 5 2. Each health benefit plan shall disclose to the health 6 benefit plan’s covered persons the average allowed amount for 7 each health care service that is covered under the covered 8 person’s health benefit plan. If a health benefit plan fails 9 to disclose the average allowed amount for a health care 10 service, a covered person may substitute a benchmark selected 11 by the commissioner. 12 3. A covered person who elects to receive a covered health 13 care service at a discounted cash price that is below the 14 average allowed amount shall receive credit toward the covered 15 person’s in-network cost-sharing as specified in the covered 16 person’s health benefit plan, as if the health care service is 17 provided by an in-network health care provider. 18 4. A health benefit plan shall not discriminate in the 19 form of payment for any covered in-network health care service 20 solely on the basis that the covered person was referred for 21 the health care service by an out-of-network health care 22 provider. 23 5. a. If a covered person elects to pay cash price for 24 a generic-brand covered prescription drug that results in a 25 lower cost than the average allowed amount for the name-brand 26 covered prescription drug under the covered person’s health 27 benefit plan, excluding any drug manufacturer’s rebate or 28 other discount from the average allowed amount, the health 29 benefit plan shall apply any payments made by the covered 30 person for the generic-brand covered prescription drug 31 to the covered person’s cost-sharing as specified in the 32 covered person’s health benefit plan as if the covered person 33 purchased the generic-brand prescription drug from a network 34 pharmacy using the covered person’s health benefit plan. The 35 -5- LSB 1883SV (3) 90 nls/ko 5/ 13

S.F. 2381 health benefit plan shall credit half the difference in the 1 cash price for the generic-brand covered prescription drug 2 and the average allowed amount for the name-brand covered 3 prescription drug, excluding any drug manufacturer’s rebate 4 or other discount from the average allowed amount, toward 5 the covered person’s cost-sharing for health care services 6 that are covered or that are considered formulary under the 7 covered person’s health benefit plan. The health benefit 8 plan may credit half the difference in the cash price for 9 the generic-brand covered prescription drug and the average 10 allowed amount for the name-brand covered prescription drug, 11 excluding any drug manufacturer’s rebate or other discount 12 from the average allowed amount, toward the covered person’s 13 cost-sharing for health care services that are not covered 14 or that are considered nonformulary under the covered 15 person’s health benefit plan. This paragraph shall not be 16 construed to restrict a health benefit plan from requiring a 17 preauthorization or other precertification normally required by 18 the health benefit plan. 19 b. A health benefit plan shall provide a downloadable or 20 interactive online form for a covered person to submit proof of 21 payment under paragraph “a” , and shall annually inform covered 22 persons of their options under this subsection. 23 6. Annually at enrollment or renewal, a health carrier shall 24 provide notice to covered persons via the health carrier’s 25 health benefit plan materials and the health carrier’s internet 26 site of the option, and the process, to receive a covered 27 health care service at a discounted cash price. 28 7. If a covered person pays a discounted cash price that is 29 above the average allowed amount, the health benefit plan shall 30 credit the covered person’s cost-sharing an amount equal to 31 the lesser of the discounted cash price or the average allowed 32 amount. 33 8. a. If a health carrier denies a claim submitted by a 34 covered person pursuant to this chapter, the health carrier 35 -6- LSB 1883SV (3) 90 nls/ko 6/ 13

S.F. 2381 shall notify the commissioner and provide evidence to support 1 the denial to the covered person and to the commissioner. 2 b. A covered person may appeal a claim denial pursuant to 3 chapter 514J. 4 c. If a health carrier denies twenty or more claims pursuant 5 to this chapter in any one quarter, the commissioner shall 6 have the authority to investigate the claim denials. If the 7 commissioner finds that a health carrier has improperly denied 8 claims under this chapter, or committed an unfair or deceptive 9 act or practice under section 507B.4, subsection 3, paragraph 10 “v” , the commissioner may conduct a hearing under section 11 507B.6. 12 9. a. A covered person shall have access to a program that 13 directly rewards the covered person with a savings incentive 14 for medically necessary covered health care services received 15 from health care providers that offer a discounted cash price 16 below the average allowed amount. Annually at enrollment or 17 renewal, a health carrier shall provide notice to covered 18 persons via the health carrier’s health benefit plan materials 19 and the health carrier’s internet site of the savings incentive 20 program and how the savings incentive program works. If a 21 covered person exceeds the covered person’s annual deductible, 22 the covered person’s health benefit plan shall notify the 23 covered person of the savings incentive program and how the 24 savings incentive program works. 25 b. A covered person’s savings incentive for a specific 26 health care service shall be calculated as the difference 27 between the discounted cash price and the average allowed 28 amount. A savings incentive shall be divided equally between 29 the covered person and the covered person’s health benefit 30 plan, and may include a cash payment to the covered person. If 31 a third party helps facilitate a covered person in utilizing 32 a discounted cash price that saves money for the covered 33 person, the covered person may share a portion of their savings 34 incentive with the third party. 35 -7- LSB 1883SV (3) 90 nls/ko 7/ 13

S.F. 2381 c. Savings incentives under this subsection shall not be 1 an administrative expense of the health benefit plan for rate 2 development or rate filing purposes. 3 10. a. A health care provider shall not initiate or pursue 4 a collection action against a covered person, or a covered 5 person’s guarantor, for a debt owed for a health care service 6 unless the health care provider is in material compliance with 7 this chapter on the date that the health care provider provided 8 the health care service to the covered person. 9 b. If a health care provider initiates or pursues a 10 collection action in violation of paragraph “a” , the covered 11 person or the covered person’s guarantor may file for a 12 declaratory judgment with a court of competent jurisdiction 13 and the health care provider shall not continue the collection 14 action against the covered person, or the covered person’s 15 guarantor, while the lawsuit is pending. If the court finds in 16 favor of the covered person, or the covered person’s guarantor, 17 the court shall order the health care provider to do all of the 18 following: 19 (1) Refund a payor any amount the payor paid for the debt 20 that is the subject of the lawsuit. 21 (2) Pay a penalty to the covered person, or the covered 22 person’s guarantor, in an amount equal to the total amount of 23 the debt that is the subject of the lawsuit. 24 (3) Dismiss with prejudice, or cause to be dismissed with 25 prejudice, any court action related to the collection action 26 or the lawsuit. 27 (4) Pay any attorney fees and costs incurred by the covered 28 person, or the covered person’s guarantor, related to the 29 collection action or the lawsuit. 30 (5) Remove or cause to be removed from the covered person’s 31 or the covered person’s guarantor’s credit report any report 32 made to a consumer reporting agency related to the debt that 33 is the subject of the lawsuit. 34 11. Provided that a health care provider does not initiate 35 -8- LSB 1883SV (3) 90 nls/ko 8/ 13

S.F. 2381 or pursue a collection action in violation of this chapter, 1 this chapter shall not be construed to prohibit a health care 2 provider from billing a covered person, a covered person’s 3 guarantor, or a third-party payor including a health insurer, 4 for health care services provided to a covered person; or to 5 require a health care provider to refund any payment made to 6 the health care provider for a health care service provided to 7 a covered person. 8 12. If a provision of this chapter or its application to 9 any person or circumstance is held invalid, the invalidity does 10 not affect other provisions or applications of this chapter 11 which can be given effect without the invalid provision or 12 application. 13 Sec. 5. SAVINGS INCENTIVE PROGRAM AND DEDUCTIBLE CREDIT 14 PROGRAM FOR STATE EMPLOYEES. 15 1. Before August 1, 2025, the department of administrative 16 services shall conduct an analysis of the cost-effectiveness of 17 offering a savings incentive program and deductible credit for 18 state employees and retirees. 19 2. On or before September 1, 2025, the department of 20 administrative services shall submit a report to the general 21 assembly that contains an explanation as to the decision to 22 implement, or not implement, a savings incentive program or 23 deductible credit program. 24 3. Any savings incentive program or deductible credit found 25 to be cost-effective shall be implemented for the 2025 state 26 employee health insurance open enrollment period. 27 EXPLANATION 28 The inclusion of this explanation does not constitute agreement with 29 the explanation’s substance by the members of the general assembly. 30 This bill relates to certain cost controls for health care 31 services and may be cited as “The Patient’s Right to Save Act”. 32 Under the bill, all health care providers (providers) are 33 required to establish and disclose the discounted cash price 34 (cash price) the provider will accept for specific health care 35 -9- LSB 1883SV (3) 90 nls/ko 9/ 13

S.F. 2381 services (services). “Discounted cash price” is defined in the 1 bill as the price an individual pays for a specific service if 2 the individual pays with cash or a cash equivalent. The cash 3 price shall be available to all covered persons (persons) and 4 to all uninsured individuals. A provider shall post the cash 5 prices on the provider’s internet site, update any change in a 6 cash price within 10 days of the change, and review each cash 7 price at least annually. 8 During the appointment scheduling process, and any intake 9 process prior to the provision of a service, persons and 10 uninsured individuals shall be informed of their right to 11 pay for the service via the cash price. A person shall also 12 be advised that they qualify for a deductible credit if they 13 have not exceeded their deductible to date, and the criteria 14 detailed in the bill is satisfied. 15 A provider shall not enter into a contract that prevents 16 the provider from offering a cash price below the contracted 17 rates the provider has with a health carrier (carrier), or that 18 prevents the provider from disclosing the provider’s cash price 19 to persons. 20 A person’s out-of-pocket pricing for each drug on a 21 carrier’s formulary shall be available to a provider via an 22 easily accessible and secure internet site hosted by the 23 carrier at the point the provider prescribes drugs to a person. 24 A provider shall provide an individual with an itemized list 25 of all services provided to the individual, a statement that 26 the individual paid out-of-pocket for the services, and if the 27 individual is a covered person, a statement that the provider 28 will not make a claim against the person’s carrier for payment 29 for the services provided. 30 Each plan shall disclose to the plan’s covered persons the 31 average allowed amount for each service that is covered under 32 the person’s plan. If a plan fails to disclose each average 33 allowed amount, a person may substitute a benchmark selected 34 by the commissioner of insurance (commissioner). A person who 35 -10- LSB 1883SV (3) 90 nls/ko 10/ 13

S.F. 2381 elects to receive service at a cash price that is below the 1 average allowed amount shall receive credit toward the person’s 2 cost-sharing as if the service had been provided by a network 3 provider. “Average allowed amount” is defined in the bill. 4 A plan shall not discriminate in the form of payment for any 5 in-network covered service solely on the basis that the person 6 was referred for the service by an out-of-network provider. If 7 a person elects to pay cash price for a generic-brand drug that 8 results in a lower cost than the average allowed amount for the 9 name-brand drug under the person’s plan, the plan shall apply 10 any payments made by the person for the generic-brand drug as 11 detailed in the bill. A plan is required to provide an online 12 form for the purpose of a person submitting proof of payment, 13 and to annually inform persons of their options related to 14 discounts and rebates. 15 Annually at enrollment or renewal, a carrier shall provide 16 notice to persons via the carrier’s health plan materials and 17 on the carrier’s internet site of the option and the process 18 to receive a covered service at a discounted cash price. If a 19 person pays a discounted cash price that is above the average 20 allowed amount, the plan shall give the person credit toward 21 the person’s cost-sharing in an amount equal to the cash price. 22 If a carrier denies a claim submitted by a person pursuant 23 to the bill, the carrier shall notify the commissioner and 24 provide evidence to support the denial to the person and the 25 commissioner. A person may appeal a denial of a claim as 26 detailed in the bill. If a carrier denies 20 or more claims 27 in any one quarter, the commissioner shall have the authority 28 to investigate the denials. If the commissioner finds that 29 a carrier has improperly denied claims under this chapter or 30 committed an unfair or deceptive act or practice under Code 31 section 507B.4(3)(v), the commissioner may conduct a hearing 32 under Code section 507B.6. 33 A person shall have access to a program that rewards the 34 person with a savings incentive for medically necessary 35 -11- LSB 1883SV (3) 90 nls/ko 11/ 13

S.F. 2381 services received from providers that offer a cash price below 1 the average allowed amount. Annually at enrollment or renewal, 2 a carrier shall provide notice to persons via the carrier’s 3 internet site of the savings incentive program and how the 4 savings incentive program works. If a person exceeds the 5 person’s annual deductible, the person’s plan shall notify the 6 person of the savings incentive program. A person’s savings 7 incentives for a service shall be calculated as the difference 8 between the cash price and the average allowed amount. A 9 savings incentive shall be divided equally between the person 10 and the person’s plan, and may include a cash payment to the 11 person and a third party as described in the bill. 12 A provider shall not initiate or pursue a collection action 13 (action) against a person, or a person’s guarantor, for a 14 debt owed for a service unless the provider is in material 15 compliance with the bill on the date that the service is 16 provided. If a provider initiates or pursues an action in 17 violation of the bill, the person may file for a declaratory 18 judgment with a court of competent jurisdiction and the 19 provider shall not continue the collection action while the 20 suit is pending. If the court finds in favor of the person, the 21 court shall order the provider to comply with the requirements 22 detailed in the bill. 23 Provided the provider does not initiate or pursue an action 24 in violation of the bill, the bill shall not be construed 25 to prohibit a provider from billing a person, a person’s 26 guarantor, or a third-party payor, including a health insurer, 27 for a service provided to the person, or to require a provider 28 to refund any payment made to the provider for a service 29 provided to the person. 30 If a provision of the bill or its application to any person 31 or circumstance is held invalid, the invalidity does not affect 32 other provisions or applications of the bill which can be given 33 effect without the invalid provision or application. 34 The bill directs the department of administrative services 35 -12- LSB 1883SV (3) 90 nls/ko 12/ 13

S.F. 2381 (DAS) to conduct an analysis of the cost-effectiveness of 1 offering a savings incentive program and deductible credit for 2 state employees and retirees. DAS shall submit a report to the 3 general assembly on or before September 1, 2025, containing 4 an explanation as to the decisions to implement, or not to 5 implement, a savings incentive program or deductible credit 6 program. Any savings incentive program or deductible credit 7 program found to be cost-effective shall be implemented for the 8 2025 state employee health insurance open enrollment period. 9 -13- LSB 1883SV (3) 90 nls/ko 13/ 13