Rerouting The Battlefield

When Texas passed House Bill 711, commonly dubbed the “Tier & Steer Bill”, the reaction in parts of the benefits world was predictable. In all honesty, most probably ignored it. But some hailed it as a long-overdue check on hospital power. Others quietly hoped it would finally loosen the grip provider networks have on employer health plans.

Both reactions miss the point, and if you haven’t read the House Bill, I highly encourage you to now….it’s extremely short. And the rest of this article will make much more sense.

HB 711 does not dismantle networks. It does not force insurers or PPOs to behave differently. And it does not suddenly give employers unilateral control over hospital participation in networks.

What it does instead is more subtle, and ultimately more important.

HB 711 reroutes the battlefield.

It changes where leverage can be applied, which arguments still work, and which ones no longer hold up. And for employers and plan sponsors who were already operating outside the traditional network playbook, it provides something invaluable: validation.

What HB 711 Actually Does

At its core, HB 711 prohibits certain contract provisions between providers and what the statute calls “general contracting entities” in Texas. These include all-or-nothing clauses, anti-steering clauses, anti-tiering clauses, gag clauses, and most-favored-nation clauses.

The law makes these provisions void and unenforceable under Texas law.

Just as importantly, HB 711 explicitly affirms that when a contracting entity steers patients or tiers providers, it may do so, provided the conduct is for the primary benefit of the enrollee.

That last point matters more than most headlines ever, acknowledged.

What HB 711 Does Not Do

It is important to be direct here, because credibility depends on it.

HB 711 does not displace PPO networks. It does not force Aetna, Cigna, or any other large network to allow hospital-by-hospital carve-outs. It does not break provider concentration. It does not realign network incentives toward employers. And it does not make networks suddenly receptive to customization.

Large networks still depend on hospital participation to maintain scale and marketability. They are structurally aligned with providers, not employers. That reality did not change when HB 711 became law.

Anyone suggesting otherwise is overselling the statute.

Why Networks Resist, and Why That Does Not Neutralize the Law

It is true that most major networks will not willingly support strategies that single out individual hospitals, or that “disrupt” their networks in any way. This is not because such strategies are illegal. It is because they are destabilizing.

If a network allows one employer to treat Hospital X differently, Hospital X may reasonably question why it should remain in that network at all. Networks understand this. Hospitals understand this. Everyone behaves accordingly.

So yes, networks resist when employers attempt creativity and innovation under these new laws.

But that resistance no longer rests on the same foundation.

Before HB 711, the standard response was that contracts would not allow it. After HB 711, the response has to be that the network chooses not to allow it.

That distinction matters.

The law does not force networks to change, but it removes the claim that change is impossible. Once inevitability disappears, strategy reopens.

That is what rerouting the battlefield looks like in practice.

You Do Not Have to Control the Network to Influence Behavior

This is where many discussions about HB 711 go off track. They assume steering requires network enforcement. It does not.

Steering happens where economic incentives meet human behavior, not where logos appear on an ID card.

This is something we understood early at High Plains Health Plan, well before HB 711 existed.

HPHP: A Model Built Before Permission Was Granted

Since 2022, HPHP has operated on a simple principle that is often misunderstood.

Plan design, not network coercion, is the most effective steering mechanism in healthcare.

Our model does not rely on carving hospitals out of PPOs or forcing networks to bend. Instead, it uses financial levers that actually influence decision-making. $0 deductibles and $0 copays are not merely perks. They are volume-routing tools.

What This Looks Like in Practice

One HPHP employer that renews its health plan each April has now been on this model for two full years.

Over that period, approximately 67 percent of the employer’s total billed medical charges have flowed through Tier One, a narrower network of providers under direct contract we’ve negotiated. Within that Tier One network, the plan has averaged a 74% discount off billed charges.

The remaining utilization has flowed through Tier Two, a broad PPO “wrap” network using a major national carrier. Care delivered through Tier Two has averaged a 47% discount off billed charges.

Members are not required to use Tier One. They are financially rewarded for doing so through $0 deductibles and $0 copays. Predictably, behavior follows incentives.

This approach is saving the employer hundreds of thousands of dollars annually. More importantly, as Tier One utilization continues to strengthen, those savings are proving durable.

The employer has experienced an actual reduction in healthcare costs for two consecutive years. Not a slowing of growth, but a true retraction in spend, all while offering platinum-level benefits with zero deductibles and copays.

HPHP does not tell members where they cannot go. It makes it obvious where they should go.

Tier One as a Destination, Not a Threat

HPHP’s Tier One is a narrower network of providers with whom we contract directly (this is the “tiering”). These providers offer better pricing, stronger alignment, and clearer accountability.

Members who choose Tier One experience lower out-of-pocket costs, less friction, and a simpler care journey (this is the “steering”).

Tier Two still exists. Choice still exists. Access still exists.

The difference is that incentives do the work that restrictions never could.

Why HB 711 Validated, Rather Than Enabled, This Approach

HB 711 did not create HPHP’s model. It clarified that models like ours were always on solid legal ground.

By explicitly permitting steering and tiering when done for the enrollee’s benefit, the law affirmed what experience had already demonstrated. Influencing behavior is not inherently abusive. Transparency is not inherently dangerous. Alignment is more effective than coercion.

In that sense, the law did not lead innovation. It caught up to it.

The Real Opportunity Going Forward

HB 711 does not promise disruption. What it offers is legitimacy at the edges of healthcare/benefits reform.

It becomes harder to dismiss tiered plan designs, transparent pricing, direct contracts, and hybrid strategies as “fringe” or “reckless”. It weakens the legal posture of providers who relied on uniformity and opacity. It reframes fiduciary conversations at the board level. And it exposes where resistance is a choice rather than a contractual requirement.

That matters, even if the center of the system remains intact. HB711 made the boundaries much more visable, and when boundaries are visible, employers and plan sponsors can reshape strategy.

Closing Thoughts…(for now)…

Healthcare rarely changes because entrenched incumbents voluntarily surrender power. It changes when alternatives stop needing permission.

HB 711 did not topple networks. It didn’t need to.

It clarified boundaries. It removed excuses. It rerouted the battlefield.

For those who were already building beyond the old assumptions, that may be its most important legacy.