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. 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. “Cost-sharing” means any coverage limit, copayment, 23 coinsurance, deductible, or other out-of-pocket expense 24 obligation imposed on a covered person by a policy, contract, 25 or plan providing for third-party payment or prepayment of 26 health or medical expenses. 27 3. “Covered benefits” or “benefits” means health care 28 services that a covered person is entitled to under the terms 29 of a health benefit plan. 30 4. “Covered person” means a policyholder, subscriber, 31 enrollee, or other individual participating in a health benefit 32 plan. 33 5. “Discounted cash price” means the price an individual 34 pays for a specific health care service if the individual pays 35 -1- SF 2381 (4) 90 nls/ko/mb 1/ 9

S.F. 2381 for the health care service with cash or a cash equivalent. 1 6. “Health benefit plan” means a policy, contract, 2 certificate, or agreement offered or issued by a health carrier 3 to provide, deliver, arrange for, pay for, or reimburse any of 4 the costs of health care services. 5 7. “Health care provider” means a physician or other 6 health care practitioner licensed, accredited, registered, or 7 certified to perform specified health care services consistent 8 with state law, an institution providing health care services, 9 a health care setting, including but not limited to a hospital 10 or other licensed inpatient center, an ambulatory surgical 11 or treatment center, a skilled nursing center, a residential 12 treatment center, a diagnostic, laboratory, and imaging center, 13 or a rehabilitation or other therapeutic health setting. 14 8. “Health care services” means services for the diagnosis, 15 prevention, treatment, cure, or relief of a health condition, 16 illness, injury, or disease. 17 9. a. “Health carrier” means an entity subject to the 18 insurance laws and regulations of this state, or subject 19 to the jurisdiction of the commissioner, including an 20 insurance company offering sickness and accident plans, a 21 health maintenance organization, a nonprofit health service 22 corporation, a plan established pursuant to chapter 509A 23 for public employees, or any other entity providing a plan 24 of health insurance, health care benefits, or health care 25 services. 26 b. For purposes of this chapter, “health carrier” does not 27 include an entity providing any of the following: 28 (1) Coverage for accident-only, or disability income 29 insurance. 30 (2) Coverage issued as a supplement to liability insurance. 31 (3) Liability insurance, including general liability 32 insurance and automobile liability insurance. 33 (4) Workers’ compensation or similar insurance. 34 (5) Automobile medical-payment insurance. 35 -2- SF 2381 (4) 90 nls/ko/mb 2/ 9

S.F. 2381 (6) Credit-only insurance. 1 (7) Coverage for on-site medical clinic care. 2 (8) Other similar insurance coverage, specified in 3 federal regulations, under which benefits for medical care 4 are secondary or incidental to other insurance coverage or 5 benefits. 6 c. For purposes of this chapter, “health carrier” does not 7 include an entity providing benefits under a separate policy 8 including any of the following: 9 (1) Limited scope dental or vision benefits. 10 (2) Benefits for long-term care, nursing home care, home 11 health care, or community-based care. 12 (3) Any other similar limited benefits as provided by the 13 commissioner by rule. 14 d. For purposes of this chapter, “health carrier” does not 15 include an entity providing benefits offered as independent 16 noncoordinated benefits including any of the following: 17 (1) Coverage only for a specified disease or illness. 18 (2) A hospital indemnity or other fixed indemnity 19 insurance. 20 e. For purposes of this chapter, “health carrier” does 21 not include an entity providing a Medicare supplemental 22 health insurance policy as defined under section 1882(g)(1) 23 of the federal Social Security Act, coverage supplemental to 24 the coverage provided under 10 U.S.C. ch. 55, and similar 25 supplemental coverage provided to coverage under group health 26 insurance coverage. 27 10. “Pharmacist” means the same as defined in section 28 155A.3. 29 11. “Pharmacy” means the same as defined in section 155A.3. 30 Sec. 4. NEW SECTION . 514M.3 Health care services —— cost 31 controls. 32 1. a. All health care providers shall establish and 33 disclose the discounted cash price the health care provider 34 will accept for specific health care services. The disclosure 35 -3- SF 2381 (4) 90 nls/ko/mb 3/ 9

S.F. 2381 shall specify if the discounted cash price varies due to 1 different circumstances, including but not limited to the 2 day or time a health care service is provided, the office or 3 location at which the health care service is provided, how 4 quickly an individual pays the discounted cash price for a 5 health care service the individual received, the income level 6 of the individual who received the health care service, or 7 the ancillary services or amenities provided to an individual 8 at the same time the health care service is provided. The 9 discounted cash price shall be available to all covered persons 10 and to all uninsured individuals. A health care provider may 11 satisfy the requirements of this paragraph by complying with 12 the centers for Medicare and Medicaid services of the United 13 States department of health and human services hospital price 14 transparency final rule published in the federal register on 15 November 22, 2023. 16 b. A health care provider shall post all discounted cash 17 prices on the health care provider’s internet site in a 18 manner that is easily accessible to the public. A health care 19 provider shall update any change in a discounted cash price 20 within ten calendar days of the change, and shall review each 21 discounted cash price at least annually. 22 c. (1) Prior to the provision of a scheduled health care 23 service, a health care provider shall inform all covered 24 persons and uninsured individuals of the right of the covered 25 person or uninsured individual to pay for a health care service 26 via the discounted cash price. The notice may be provided 27 electronically, verbally, in writing, or posted at the physical 28 location of the health care provider. 29 (2) Prior to the provision of a scheduled health care 30 service, a health care provider shall inform a covered person 31 that the covered person may qualify for a deductible credit 32 if the covered person pays the discounted cash price for the 33 health care service and if the discounted cash price is below 34 the average allowed amount paid by the health carrier to 35 -4- SF 2381 (4) 90 nls/ko/mb 4/ 9

S.F. 2381 network providers for a comparable health care service. The 1 notice may be provided electronically, verbally, in writing, or 2 posted at the physical location of the health care provider. 3 d. A health care provider shall not enter into a contract 4 that prohibits the health care provider from offering a 5 discounted cash price below the contracted rates the health 6 care provider has with a health carrier, or that prohibits the 7 health care provider from disclosing the health care provider’s 8 discounted cash price under paragraph “b” . 9 e. A health carrier shall not enter into a contract with a 10 health care provider that prohibits the health care provider 11 from offering a discounted cash price below the contracted 12 rates the health care provider has with a health carrier, or 13 that prohibits the health care provider from disclosing the 14 health care provider’s discounted cash price under paragraph 15 “b” . 16 f. A covered person’s out-of-pocket pricing for each 17 prescription drug on a health carrier’s formulary shall be 18 available to a pharmacist via an easily accessible and secure 19 internet site hosted by the health carrier at the point the 20 pharmacist fills a prescription drug to the covered person. 21 g. A health care provider shall provide an individual with 22 an itemized list of all health care services provided to the 23 individual, a statement that the individual paid out-of-pocket 24 for the health care services, and a statement that the health 25 care provider will not make a claim against a health carrier 26 for payment for the health care services provided to the 27 individual if the individual is a covered person. 28 2. Each health benefit plan shall disclose to the health 29 benefit plan’s covered persons the average allowed amount for 30 each health care service that is covered under the covered 31 person’s health benefit plan. If a health benefit plan fails 32 to disclose the average allowed amount for a health care 33 service, a covered person may substitute a benchmark selected 34 by the commissioner. 35 -5- SF 2381 (4) 90 nls/ko/mb 5/ 9

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

S.F. 2381 from the average allowed amount, toward the covered person’s 1 cost-sharing for health care services that are not covered 2 or that are considered nonformulary under the covered 3 person’s health benefit plan. This paragraph shall not be 4 construed to restrict a health benefit plan from requiring a 5 preauthorization or other precertification normally required by 6 the health benefit plan. 7 b. A health benefit plan shall provide a downloadable or 8 interactive online form for a covered person to submit proof of 9 payment under paragraph “a” , and shall annually inform covered 10 persons of their options under this subsection. 11 6. Annually at enrollment or renewal, a health carrier shall 12 provide notice to covered persons via the health carrier’s 13 health benefit plan materials and the health carrier’s internet 14 site of the option, and the process, to receive a covered 15 health care service at a discounted cash price. 16 7. If a covered person pays a discounted cash price that is 17 above the average allowed amount, the health benefit plan shall 18 credit the covered person’s cost-sharing an amount equal to 19 the lesser of the discounted cash price or the average allowed 20 amount. 21 8. a. If a health carrier denies a claim submitted by a 22 covered person pursuant to this chapter, the health carrier 23 shall notify the commissioner and provide evidence to support 24 the denial to the covered person and to the commissioner. 25 b. A covered person may appeal a claim denial pursuant to 26 chapter 514J. 27 9. a. A covered person shall have access to a program that 28 directly rewards the covered person with a savings incentive 29 for medically necessary covered health care services received 30 from health care providers that offer a discounted cash price 31 below the average allowed amount. Annually at enrollment or 32 renewal, a health carrier shall provide notice to covered 33 persons via the health carrier’s health benefit plan materials 34 and the health carrier’s internet site of the savings incentive 35 -7- SF 2381 (4) 90 nls/ko/mb 7/ 9

S.F. 2381 program and how the savings incentive program works. If a 1 covered person exceeds the covered person’s annual deductible, 2 the covered person’s health benefit plan shall notify the 3 covered person of the savings incentive program and how the 4 savings incentive program works. 5 b. A covered person’s savings incentive for a specific 6 health care service shall be calculated as the difference 7 between the discounted cash price and the average allowed 8 amount. A savings incentive shall be divided equally between 9 the covered person and the covered person’s health benefit 10 plan, and may include a cash payment to the covered person. If 11 a third party helps facilitate a covered person in utilizing 12 a discounted cash price that saves money for the covered 13 person, the covered person may share a portion of their savings 14 incentive with the third party. 15 c. Savings incentives under this subsection shall not be 16 an administrative expense of the health benefit plan for rate 17 development or rate filing purposes. 18 10. This chapter shall not be construed to prohibit a health 19 care provider from billing a covered person, a covered person’s 20 guarantor, or a third-party payor including a health insurer, 21 for health care services provided to a covered person; or to 22 require a health care provider to refund any payment made to 23 the health care provider for a health care service provided to 24 a covered person. 25 11. If a provision of this chapter or its application to 26 any person or circumstance is held invalid, the invalidity does 27 not affect other provisions or applications of this chapter 28 which can be given effect without the invalid provision or 29 application. 30 Sec. 5. SAVINGS INCENTIVE PROGRAM AND DEDUCTIBLE CREDIT 31 PROGRAM FOR STATE EMPLOYEES. 32 1. Before August 1, 2025, the department of administrative 33 services shall conduct an analysis of the cost-effectiveness of 34 offering a savings incentive program and deductible credit for 35 -8- SF 2381 (4) 90 nls/ko/mb 8/ 9

S.F. 2381 state employees and retirees. 1 2. On or before September 1, 2025, the department of 2 administrative services shall submit a report to the general 3 assembly that contains an explanation as to the decision to 4 implement, or not implement, a savings incentive program or 5 deductible credit program. 6 3. Any savings incentive program or deductible credit found 7 to be cost-effective shall be implemented for the 2026 state 8 employee health insurance open enrollment period. 9 -9- SF 2381 (4) 90 nls/ko/mb 9/ 9