Consumer protection measure against surprise medical billing faces implementation issues

This year, Texas legislators passed a bill to protect patients from surprise medical billing; however, implementation of the law, which is set to go into effect January 1, 2020, is hitting some roadblocks as evidenced by a hearing held last week by the Texas Department of Insurance (TDI).

Surprise medical billing refers to a practice where patients with health insurance receive an unexpected expensive bill, typically after they go to a hospital that is out-of-network during an emergency or if the doctor that provided care to them at their in-network hospital is out-of-network.

Legislators recognized the need for a new way to help the state’s residents following an overwhelming spate of requests for mediation last year; the Texas Association of Health Plans found that in Texas “one in three emergency room admissions results in a surprise bill — nearly twice the national average.”

SB 1264 was a bipartisan piece of legislation that removes patients from the middle of disputes between a health insurance company and a medical provider, such as a hospital. The legislation allows both parties to enter into arbitration to negotiate a payment, which would be overseen by state officials, and also put a cap on negotiated rates.

Last week’s hearing received stakeholder input on issues of implementation identified by the Texas Department of Insurance. The purpose of the meeting was to inform any rulemaking needed by TDI to ensure adequate consumer protection as intended by the Texas Legislature. The crucial question for the rulemaking appeared to be how providers and insurers would come to agreement on a “fair” rate, which will ultimately affect all of the law’s stakeholders: consumers, insurance companies, and medical providers.

Other issues covered included non-emergency exemptions, arbitration process, payment standards and hold harmless provisions.

Until TDI confirms its posted rules, Texans will have to wait and see how—and how well—the new law protects patients. While no specific date for the rules has been announced, the deadline to submit comments ends Friday, August 9, and the looming January 1 deadline means the law’s new rules are likely to come out soon.