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State News

Law targets 'surprise medical billing' in Texas

In the patchwork of insurance coverage, a hospital can be "in network," but still offer "out of network" services.
NPR
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In the patchwork of insurance coverage, a hospital can be "in network," but still offer "out of network" services.

There’s a new law in Texas that could help people who receive unexpectedly high medical bills due to inconsistencies in their health insurance policy.

Audio transcript

Mark Haslett: What would you think if you went into the hospital, knowing that the hospital was in your insurance policy’s network of providers, and a few weeks later, you received a bill for thousands of dollars in out-of-network service fees? That nightmare scenario has become a reality for many Texans.

It has a name: Surprise medical billing.

Trey Brendt: Well, it really occurs because of a weakness in the managed care system in Texas.

Haslett: Trey Brendt follows state policy for the AARP of Texas.

Brendt: Under Texas law, if you’re treated by a provider who’s operating at a “network hospital” – in other words, a hospital that’s supposedly in your health plan’s network – if that provider is not in your health plan’s network, that provider can accept the insurance payment for that procedure, and then he’s allowed to do what we call “balance bill” - bill the additional amount that they’d like to charge directly to the patient.

Haslett: For example, you go in for surgery. The surgeon is in your health insurance network, but the anesthesiologist is not. And nobody tells you. If that sounds like something that should be illegal – Brendt says that in some places it is.

Brendt: Some states, particularly in emergency rooms, completely outlaw that practice, but that’s not something that Texas does. However, Senate Bill 481, that just recently was signed by the governor, provides some important new protections for Texans.

Haslett: Senate Bill 481 won’t take effect as law until the beginning of September. But when it does, it will change the rules the govern surprise medical billing in ways favorable to patients.

Brendt: Right now in Texas, if you get a balance bill that’s over $1,000, you have the right to what’s called mediation. And what we know about mediation is when consumers invoke their right to mediation, they almost always win in Texas. The important thing that Senate Bill 481 does, is it takes that $1,000 limit down to $500. And it also adds assistant surgeons – which have been one of the problem areas – to the list of providers that are now subject to mediation.

Haslett: If this is the first time you’ve ever heard of mediation as a way to dispute questionable medical bills, you’re not alone. It’s a process that’s set up in state law. If you have health insurance and decide to dispute a medical bill, the first step is to contact the Texas Department of Insurance, and file a request for mediation. Once that’s done, the Department of Insurance takes over and contacts the parties involved – in this case, that would be the insurance company and the out-of-network provider.

Brendt: Frequently, that’s the end of it for the consumer. The balance bill is negotiated in between those two parties and the consumer is not liable for any further bill. The big problem is consumers have to be aware of that right to mediation and most consumers aren’t. The other important thing that Senate Bill 481 does is it strengthens the notice requirements notifying consumers that they have the right to mediation.

Haslett: Those notice requirements could save patients thousands of dollars. Sometimes, the fees demanded in surprise medical billing can run into five-digit territory.

Brendt: We know of individuals who have had – for two visits to the hospital – who’ve had over $13,000 above and beyond what their insurance would pay. These bills can run into the thousands and thousands of dollars if you’re not aware of your rights under Texas law to mediation, you may get stuck paying those bills. You may be hounded and chased by collection agencies and have your credit threatened. And in some cases, folks are actually going into bankruptcy.