Relating to the disclosure of health care cost information by certain health care facilities; imposing an administrative penalty.
ModeratePlan for compliance
Medium Cost
Effective:2025-09-01
Enforcing Agencies
Health and Human Services Commission (HHSC)
01
Compliance Analysis
Key implementation requirements and action items for compliance with this legislation
Implementation Timeline
Effective Date: September 1, 2025 (HHSC gains regulatory authority).
Compliance Deadline: August 31, 2029 (Hard deadline for public disclosure of billing data for newly affected facilities).
Agency Rulemaking: HHSC will begin implementation activities in FY 2026. Expect the agency to issue specific guidance regarding data formatting and reporting standards for non-hospital facilities between 2026 and 2028.
Immediate Action Plan
Determine Applicability: Calculate total gross revenue for the most recent fiscal year to determine if you meet the $10M threshold.
Audit IT Capabilities: Initiate a gap analysis with your current billing software vendor regarding their ability to generate public-facing, machine-readable price files.
Update Risk Register: Flag August 31, 2029, as a critical compliance milestone in long-term strategic planning.
Monitor Rulemaking: Assign regulatory affairs staff to track HHSC proposed rules starting FY 2026 to influence data standard definitions.
Operational Changes Required
Contracts
RCM & IT Vendors: Review Master Service Agreements with billing and Electronic Health Record (EHR) vendors immediately. You must ensure their software roadmap includes the capability to export "machine-readable files" of standard charges by 2029. If your vendor cannot guarantee this, you must pivot to a new vendor before the deadline.
Payer Agreements: Review confidentiality clauses in payer contracts regarding negotiated rates. While statutory disclosure requirements supersede these clauses, you should prepare formal notifications to payers that this data will become public in 2029.
Hiring/Training
Compliance Protocols: Establish a strict internal protocol for handling HHSC notices. Penalties are triggered specifically by failure to respond to or comply with a Corrective Action Plan (CAP). Front-line administrative staff must be trained to escalate any HHSC correspondence to Legal immediately.
Data Management: Revenue Cycle Management (RCM) teams will require training on maintaining public-facing data sets, distinct from standard patient estimation workflows.
Reporting & Record-Keeping
Revenue Verification: You must document "Total Gross Revenue" annually to determine your regulatory status. Facilities under $10M are exempt; facilities over $100M face higher penalty tiers.
Audit Trails: Upon implementation in 2029, you must maintain digital logs proving the date and accuracy of your pricing updates to defend against potential administrative penalties.
Fees & Costs
Administrative Penalties:
Tier 1 ($10M - $100M Revenue): $100 per violation.
Tier 2 ($100M+ Revenue): $1,000 per day of non-compliance.
Operational Costs: Expect medium-level capital expenditures for IT upgrades to support public data hosting and formatting.
Strategic Ambiguities & Considerations
"Total Gross Revenue" Calculation: The statute does not explicitly define whether the $10M threshold applies to the specific licensed facility or the aggregate revenue of a parent health system. Legal counsel must monitor HHSC rulemaking for clarification on this "gatekeeper" metric.
Data Standardization: Current transparency rules rely on hospital-centric codes (DRGs/CPT). It is unclear how specialty facilities (e.g., Narcotic Drug Treatment Programs) must standardize and display costs. HHSC rulemaking will define these technical standards.
"Per Violation" Interpretation: For Tier 1 facilities, the definition of a "violation" is critical. HHSC must clarify if a violation constitutes a single missing line item (potentially resulting in massive cumulative fines) or a general failure to post a list.
Need Help Understanding Implementation?
Our government affairs experts can walk you through this bill's specific impact on your operations.
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.
Healthcare spending in the United States is among the highest in the world and continues to rise. In 2023, the U.S. spent nearly 17.6 percent of its gross domestic product (GDP) on healthcare. The federal government predicts that the total national spending will reach $7.7 trillion by 2032.
�
A major factor driving that spending is the pricing of healthcare services. Prices are established, largely, through agreements between insurers and healthcare providers. Health care represents one of the biggest economic sectors where consumers typically do not procure services based on comparison shopping and do not have easy access to market prices. The price that a hospital charges a patient for a specific procedure can vary widely based on the location of the hospital, the negotiated rates that a hospital may have with third-party payers, and the level of market competition.
S.B. 331 seeks to expand price transparency disclosures, which are already required of hospitals, to freestanding ERs, urgent care or retail clinics, ambulatory surgical centers, outpatient clinics, birthing centers, and any other facility that provides health care services in the state of Texas. S.B. 331 will extend existing state law which currently requires price transparency and price disclosure by Texas hospitals.
As proposed, S.B. 331 amends current law relating to the disclosure of health care cost information by certain health care facilities and imposes an administrative penalty.
RULEMAKING AUTHORITY
This bill does not expressly grant any additional rulemaking authority to a state officer, institution, or agency.
SECTION BY SECTION ANALYSIS
SECTION 1. Amends Section 327.001(7), Health and Safety Code, to redefine "facility."
SECTION 2. Amends Section 327.008(a), Health and Safety Code, to authorize the Health and Human Services Commission (HHSC) to impose an administrative penalty on a facility if the facility fails to respond to HHSC's request to submit a corrective action plan, or comply with the requirements of a corrective action plan submitted to HHSC. Deletes existing text authorizing (HHSC) to impose an administrative penalty on a facility in accordance with Chapter 241 (Hospitals) if the facility fails to respond to HHSC's request to submit a corrective action plan, or comply with the requirements of a corrective action plan submitted to HHSC.
SECTION 3. Requires a health care facility required to disclose billing information under Chapter 327 (Disclosure of Prices), Health and Safety Code, as amended by this Act, to disclose the information in accordance with that chapter not later than August 31, 2029.
SECTION 4. Effective date: upon passage or September 1, 2025.
Honorable Lois W. Kolkhorst, Chair, Senate Committee on Health & Human Services
FROM:
Jerry McGinty, Director, Legislative Budget Board
IN RE:
SB331 by Kolkhorst (Relating to the disclosure of health care cost information by certain health care facilities; imposing an administrative penalty.), As Introduced
Estimated Two-year Net Impact to General Revenue Related Funds for SB331, As Introduced: a negative impact of ($651,207) through the biennium ending August 31, 2027.
The bill would make no appropriation but could provide the legal basis for an appropriation of funds to implement the provisions of the bill.
General Revenue-Related Funds, Five- Year Impact:
Fiscal Year
Probable Net Positive/(Negative) Impact to General Revenue Related Funds
2026
($334,875)
2027
($316,332)
2028
($316,772)
2029
($2,970,452)
2030
($2,820,152)
All Funds, Five-Year Impact:
Fiscal Year
Probable Savings/(Cost) from General Revenue Fund 1
Probable Savings/(Cost) from GR Match For Medicaid 758
Probable Savings/(Cost) from Federal Funds 555
Change in Number of State Employees from FY 2025
2026
($334,875)
$0
$0
2.0
2027
($316,332)
$0
$0
2.0
2028
($316,772)
$0
$0
2.0
2029
($2,946,717)
($23,735)
($24,277)
17.5
2030
($2,797,930)
($22,222)
($22,729)
17.5
Fiscal Analysis
This bill amends the Health and Safety Code to expand the type of facilities that are subject to price disclosure requirements. This bill takes effect immediately if it receives a vote of two-thirds of all the members elected to each house. Otherwise, this bill would take effect September 1, 2025.
Methodology
This bill requires facilities to come into compliance with price transparency requirements by August 2029. The Health and Human Services Commission (HHSC) assumes the implementation and ramp up of health care facility price transparency would need to begin in fiscal year 2026 to ensure facilities are in compliance with the provisions of this bill by fiscal year 2029. The agency anticipates needing to begin the implementation process in fiscal year 2026 due to the expanded list of facilities and current workload requirements with hospital price transparency. The majority of costs and full-time-equivalents (FTEs) would be realized starting in fiscal year 2029 as the FTEs primary functions are to ensuring compliance with the price transparency requirements and processing enforcement actions on facilities, including hospital, freestanding emergency medical care facility, urgent care or retail clinic, outpatient clinic, birthing center, ambulatory surgical center, or other facility that is licensed to provide health care services in this state.
This analysis assumes the HHSC would require $334,875 from the General Revenue Fund ($334,875 from All Funds) and 2.0 FTEs in fiscal year 2026 and $316,332 from the General Revenue Fund ($316,332 from All Funds) and 2.0 FTEs in fiscal year 2027 to implement the provisions of the bill, which include ensuring compliance with the price transparency requirements and processing enforcement actions.
Included in the amounts above are assumed FTE costs totaling $$334,875 from the General Revenue Fund ($334,875 from All Funds) and 2.0 FTEs in fiscal year 2026 and $316,332 from the General Revenue Fund ($316,332 from All Funds) and 2.0 FTEs in fiscal year 2027. This includes $19,388 from the General Revenue Fund ($19,388 from All Funds) in fiscal year 2026 and $154,058 from the General Revenue Fund ($155,637 from All Funds) in fiscal year 2029 for one-time costs related to the implementation of provisions of this bill.
According to the Comptroller of Public Accounts, the number of violations from the facilities added to this chapter that could be subject to an administrative penalty and the number of violations resulting from the new price disclosure deadline are unknown; therefore, the fiscal impact on the state cannot be estimated.
Local Government Impact
No significant fiscal implication to units of local government is anticipated.
Source Agencies:
304 Comptroller of Public Accounts, 529 Health and Human Services Commission
LBB Staff:
JMc, NPe, ER, LBl
Related Legislation
Explore more bills from this author and on related topics
SB331 expands Chapter 327 price transparency mandates beyond general hospitals to include Ambulatory Surgical Centers (ASCs), freestanding ERs, birthing centers, and specific specialty facilities with gross revenue exceeding $10 million. While the law grants a four-year safe harbor for data publication, affected entities must immediately prepare for significant IT and revenue cycle overhauls to meet the mandatory public disclosure requirements. Implementation Timeline Effective Date: September 1, 2025 (HHSC gains regulatory authority).
Q
Who authored SB331?
SB331 was authored by Texas Senator Lois Kolkhorst during the Regular Session.
Q
When was SB331 signed into law?
SB331 was signed into law by Governor Greg Abbott on June 20, 2025.
Q
Which agencies enforce SB331?
SB331 is enforced by Health and Human Services Commission (HHSC).
Q
How urgent is compliance with SB331?
The compliance urgency for SB331 is rated as "moderate". Businesses and organizations should review the requirements and timeline to ensure timely compliance.
Q
What is the cost impact of SB331?
The cost impact of SB331 is estimated as "medium". This may vary based on industry and implementation requirements.
Q
What topics does SB331 address?
SB331 addresses topics including health care providers, hospitals, occupational regulation, occupational regulation--health occupations and birthing centers.
Legislative data provided by LegiScanLast updated: November 25, 2025
Need Strategic Guidance on This Bill?
Need help with Government Relations, Lobbying, or compliance? JD Key Consulting has the expertise you're looking for.
