Committee clears House Bill 1004 conference report focused on hospital facility fees, insurer disclosures and PBM rebates

The Rules Committee voted to make the conference committee report for House Bill 10 04 eligible for consideration after members agreed to suspend House rules.

Representative Carball, the bill’s conferee, described HB 10 04 as “a pretty comprehensive bill” that addresses managed-care and hospital assessment fees intended to leverage federal matching funds. “These fees are meant to leverage federal dollars for the dollars we pay in,” he said, adding that the legislation sets an OMB-directed study to identify median outpatient hospital facility rates for the state.

Carball reviewed several substantive changes in the conference committee report. Earlier provisions that would have capped facility fees and penalized hospitals that exceeded specified ratios to Medicare rates were removed. Instead, the bill directs the Office of Management and Budget (OMB) to design and conduct a study to determine the median outpatient facility charge in the state; the study methodology will be subject to review by the budget committee. The OMB report is due by June 30, 2026, and the five largest hospital systems are required to comply with the identified median outpatient facility rate by June 30, 2029, or face loss of not-for-profit status in the state for at least one year, with reinstatement possible if they later comply, as described by the conferee.

Carball also summarized insurer and market-transparency measures in the conference report: requiring hospitals to provide more detailed Schedule H/990 information, mandating disclosure of third-party administrator commissions and fees at the time of sale, reporting commissions to the all-payer claims database, and adding pharmacy benefit manager (PBM) rebate disclosure and an annual PBM report explaining how rebates accrue to a health plan. The bill also seeks to separate negotiations between hospitals and insurers by requiring contracting per plan rather than systemwide bundling.

Carball said the bill will require the state’s five largest hospital systems to offer a direct-to-employer narrow-network plan beginning in September that charges no more than 260% of full Medicare rates for in- and outpatient facility fees; other hospitals must provide such an option by September 2026. At the time an insurer files rates with the Department of Insurance, the health plan must submit a report showing how changes in hospital facility fees factored into overall rate changes.

Representative Slager moved to suspend House Rule 153.1 and amend House Rule 155.1 so the conference committee report for House Bill 10 04 could be distributed and held for one hour; the motion was seconded and the roll call showed the motion passed by recorded votes. The clerk’s roll indicated a 7-2 result in favor of the suspension. No final floor vote on the underlying bill occurred in this committee meeting.

Carball told the committee that earlier, stricter penalties and fee caps were removed in favor of the study-and-compliance path, and said the changes reflected negotiation with stakeholders including hospital associations.