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Signed Into Law
Signed June 20, 2025Effective 2025-09-01
SB1330

Regular Session

Relating to billing and reimbursement for certain medical equipment, devices, and supplies provided to Medicare enrollees; creating a criminal offense.

Government Affairs & Regulatory Compliance Analysis

SB1330: Government Affairs Overview

SB1330 imposes a hard billing cap on nonparticipating suppliers of durable medical equipment (DME), orthotics, and prosthetics, limiting charges to 115% of the Medicare-approved amount. Exceeding this cap without a compliant, pre-signed waiver is now a Class B misdemeanor and constitutes a violation of the Deceptive Trade Practices Act (DTPA), exposing your business to treble damages.

Sen. Kelly Hancock·Senate Bill·Regular Session

Critical
Medium Cost
Effective:2025-09-01
Enforcing Agencies

County/District Attorneys (Criminal prosecution authorized in Travis County or local venue) • Private Civil Litigants (via DTPA) • Texas Attorney General (Consumer Protection/DTPA)

Business Impact

Who SB1330 Affects

This legislation has regulatory implications for the following Texas businesses and organizations:

Regulatory Priority: critical

Significant regulatory changes (effective 2025-09-01). Review with your legal and compliance teams to understand implications.

🏥

Healthcare

Affected business types:

  • Hospitals
  • Healthcare systems
  • Medical practices
  • Health insurance providers
View all healthcare legislation
🏦

Banking & Finance

Affected business types:

  • Banks
  • Credit unions
  • Financial services firms
  • Insurance companies
View all banking & finance legislation
🏭

Manufacturing & Business

Affected business types:

  • Manufacturers
  • Industrial facilities
  • Supply chain companies
  • Logistics providers
View all manufacturing & business legislation

Key Operational Considerations

  • 1Billing Department: Staff must understand that "balance billing" is no longer standard practice for these codes; it is the exception requiring specific documentation.

Estimated Cost Impact

mediumModerate costs expected for implementation.

Enforcing Agencies

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SB1330
Critical
Relating to billing and reimbursement for certain medical equipment, devices, and supplies provided to Medicare enrollees; creating a criminal offense...
Critical Compliance Urgency
Requires immediate attention
Cost Impact
Medium
Effective
2025-09-01
Enforcing Agencies
County/District AttorneysPrivate Civil LitigantsTexas Attorney General
Primary Author: Sen. Kelly Hancock
89th Texas Legislature
jdkey.com
01

Compliance Analysis

Key implementation requirements and action items for compliance with this legislation

Implementation Timeline

  • Effective Date: September 1, 2025
  • Compliance Deadline: September 1, 2025. (You must have new intake forms and billing logic active on this date; there is no grace period).
  • Agency Rulemaking: No specific agency rulemaking is mandated by the statute. However, enforcement will rely on the Texas Attorney General’s interpretation of Consumer Protection laws. Do not wait for further guidance; the statute is self-executing.

Immediate Action Plan

  • 1. Update Fee Schedules: Link your billing software directly to the current CMS fee schedule to calculate the 115% threshold accurately.
  • 2. Draft the Waiver: Have legal counsel create the "Texas Medicare Excess Charge Waiver" immediately.
  • 3. Audit Open Rentals: Identify all rental agreements that will extend past September 1, 2025. While the law applies to items "provided" after the date, clarify if ongoing rentals require new paperwork.
  • 4. Train Staff: Conduct mandatory training in August 2025 regarding the criminal implications of billing errors.

Operational Changes Required

Contracts

  • Patient Intake Forms: You must draft a specific "Texas Medicare Excess Charge Waiver." Standard financial responsibility forms are insufficient. This document must explicitly state that Medicare reimburses only 80% of the approved amount and that Medigap plans are not liable for the excess charges.
  • Collections Agreements: Review contracts with third-party debt collectors immediately. You must prohibit them from attempting to collect amounts exceeding the 115% cap unless you provide the specific signed waiver. Collecting on an invalid debt under this statute triggers DTPA liability.

Hiring/Training

  • Front Desk/Intake Staff: Staff must be trained on a "Stop-Bill" Protocol. They cannot dispense equipment priced above the 115% cap until the waiver is signed and payment/rental terms are agreed upon. Retroactive signatures are not legally binding under this statute.
  • Billing Department: Staff must understand that "balance billing" is no longer standard practice for these codes; it is the exception requiring specific documentation.

Reporting & Record-Keeping

  • Waiver Retention: You must retain the signed Excess Charge Waiver indefinitely. In the event of a consumer complaint or audit, failure to produce this specific document results in automatic liability.
  • System Logic: Your billing software must be updated to flag Medicare enrollees and automatically cap invoices at 115% of the allowable rate unless a manager overrides the system with a confirmed waiver on file.

Fees & Costs

  • Legal Costs: Budget for outside counsel to draft the specific waiver language to ensure it meets the statutory "clear and conspicuous" standard.
  • Potential Revenue Loss: If your current pricing model relies on balance billing without explicit prior consent, you will lose that revenue stream immediately upon the effective date.

Strategic Ambiguities & Considerations

  • "Medicare-Approved Amount" Volatility: The statute pegs the criminal cap to the "Medicare-approved amount," which fluctuates based on CMS fee schedules and competitive bidding. If your billing system relies on an outdated fee schedule, you may unintentionally bill above the 115% cap. You must ensure real-time synchronization with CMS data.
  • Intent vs. Deception: The criminal penalty requires "intentional" violation. However, the civil penalty (DTPA) applies to "false, misleading, or deceptive acts." A clerical error where a waiver is lost but the patient is billed could trigger a DTPA lawsuit and treble damages, even if the criminal standard of "intent" is not met.

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JD Key Consulting specializes in Texas regulatory compliance strategy. Work directly with James Dickey—former Chairman of the Republican Party of Texas—to understand this bill's impact on your operations and develop an actionable compliance plan.

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Information presented is for general knowledge only and is provided without warranty, express or implied. Consult qualified government affairs professionals and legal counsel before making compliance decisions.

02

Legislative Timeline

This bill's path through the Texas Legislature

Filed
Feb 14, 2025
Passed Senate
Apr 1, 2025
Passed House
May 24, 2025
Signed
Jun 20, 2025
Effective
Sep 1, 2025
TopicsCrimesCrimes--miscellaneousHealth Care ProvidersInsuranceInsurance--life, Health & AccidentMedicareOrthotics & OrthotistsProsthetists & ProstheticsBusiness & CommerceBusiness & Commerce--trade Practices
03

Senate Authors

Sen. Kelly HancockRepublican · Primary Author

House Sponsor

Rep. Dennis PaulRepublican · Primary Sponsor

Bill Text(with markup)

View bill text in multiple formats on Texas Legislature website

Fiscal NoteView Original

Related Legislation

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More from Sen. Kelly Hancock

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Related by Topic

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Quick Reference

Frequently Asked Questions

Common questions about SB1330

Q

What does Texas SB1330 do?

SB1330 imposes a hard billing cap on nonparticipating suppliers of durable medical equipment (DME), orthotics, and prosthetics, limiting charges to 115% of the Medicare-approved amount. Exceeding this cap without a compliant, pre-signed waiver is now a Class B misdemeanor and constitutes a violation of the Deceptive Trade Practices Act (DTPA), exposing your business to treble damages.

Q

Who authored SB1330?

SB1330 was authored by Texas Senator Kelly Hancock during the Regular Session.

Q

When was SB1330 signed into law?

SB1330 was signed into law by Governor Greg Abbott on June 20, 2025.

Q

Which agencies enforce SB1330?

SB1330 is enforced by County/District Attorneys (Criminal prosecution authorized in Travis County or local venue), Private Civil Litigants (via DTPA) and Texas Attorney General (Consumer Protection/DTPA).

Q

How significant are the changes in SB1330?

The regulatory priority for SB1330 is rated as "critical". Businesses and organizations should review the legislation to understand potential impacts.

Q

What is the cost impact of SB1330?

The cost impact of SB1330 is estimated as "medium". This may vary based on industry and implementation requirements.

Q

What topics does SB1330 address?

SB1330 addresses topics including crimes, crimes--miscellaneous, health care providers, insurance and insurance--life, health & accident.

Q

What are the key dates for SB1330?

Key dates for SB1330: Effective date is 2025-09-01. Consult with legal counsel regarding applicability.

Q

What are the penalties under SB1330?

SB1330 establishes the following penalties: criminal penalty of $500 to $1,000 fine for Intentional violation of billing caps (charging >115% of Medicare rate without compliant waiver) by a nonparticipating supplier. Misdemeanor offense.; civil penalty of Damages under DTPA (potential treble damages + attorney fees) for Violating the billing cap or notice requirements constitutes a false, misleading, or deceptive act under Business & Commerce Code Section 17.46.. Consult with legal counsel for specific applicability to your situation.

Q

Which Texas businesses are affected by SB1330?

SB1330 primarily affects healthcare providers and medical facilities, insurance companies and financial institutions, Texas businesses and commercial enterprises. These businesses should review the legislation with their legal and compliance teams to understand potential impacts.

Need Strategic Guidance on This Legislation?

JD Key Consulting is an Austin, Texas-based government affairs firm led by James Dickey, former Chairman of the Republican Party of Texas. We specialize in Texas regulatory compliance and legislative strategy for data centers, energy, banking, and manufacturing.

Legislative data provided by LegiScanLast updated: January 11, 2026