TX HB4872

Amends Section 843.342 of the Insurance Code to specify that penalties for late payment of claims from certain physicians or providers must be calculated using the "usual and customary rate" for the service in the geographic area where it was provided, rather than a contracted rate

Makes the same amendment to Section 1301.137 of the Insurance Code, applying the usual and customary rate standard for penalty calculations to preferred provider benefit plans

Applies to physicians and health care providers referenced in Sections 843.351 and 1301.069, which typically address out-of-network or non-contracted provider situations

Changes apply only to penalties or interest on penalties for claims submitted on or after the effective date

Takes effect September 1, 2025