Texas State Capitol in Austin. Credit: Moab Republic/Adobe Stock

A legislator in Texas has introduced a pharmacy benefit manager bill that could change what provider contracts look like.

Rep. Cole Hefner, R-Mount Pleasant, Texas, introduced the new PBM bill in an effort to make PBM contracts more fair to pharmacies and easier for pharmacists to understand.

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One provision would prohibit a PBM contract from incorporating "by a reference a document included in a contract or contract attachment, including a provider manual."

"All financial terms, including reimbursement rates and methodology, must be set forth in the contract," according to the bill text.

If that kind of approach to state health care provider contracting spread, provider contracts of all kinds might become easier for providers, employers and benefits advisors who aren't lawyers to read: Readers would no longer have to track down extra documents to understand the contracts.

But the contracts might become stale more quickly, because any problems with the standard material incorporated in the contracts would have to be updated on a contract-by-contract basis. Outside entities could no longer push changes into all provider contracts by updating one central standard document.

The bill is part of a wave of state-level legislation related to efforts by health care providers to oppose what they see as burdensome health plan and provider network negotiating tactics.

Related: The surge in provider-insurer contract disputes is leaving patients in the lurch

Legislation in Texas is of interest because Texas is the highest-population state that has a Republican governor and Republicans in charge of both chambers in the state legislature.

If passed and implemented as written, the Hefner bill might apply only to employers' fully insured plans.

Since 1974, the Employee Retirement Income Security Act has preempted states' efforts to regulate employers' self-insured plans.

But, in recent years, Texas has been fighting in the courts for the ability to protect health care providers even when those providers are working with ERISA plans. That means Texas could find ways to apply its benefits laws to self-insured plans as well as to fully insured plans.

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Allison Bell

Allison Bell, a senior reporter at ThinkAdvisor and BenefitsPRO, previously was an associate editor at National Underwriter Life & Health. She has a bachelor's degree in economics from Washington University in St. Louis and a master's degree in journalism from the Medill School of Journalism at Northwestern University. She can be reached through X at @Think_Allison.