Patients receiving surprise medical bills typically have been recently released from emergency rooms. They are often unaware the treatment they received may be from a physician or other medical practitioner outside of their health insurance network. Upon receiving bills for these services, patients learn they fall outside negotiated rates with their insurance provider and may apply to a much steeper deductible. The bills spark endless wrangling with health care providers and disgruntled patients.
Surprise billing is closely related to balance billing (the two terms are often used interchangeably), in which physicians or facilities charge patients for the portion of medical expenses not covered by the patient’s insurance, beyond the usual charges such as copays. These additional charges tend to arrive as a surprise to patients.
‘To Protect the Patients’
S.B. 1264, introduced by Texas state Sen. Kelly Hancock (R-North Richland Hills), would create an arbitration process that removes the patient from the billing dispute.
“The whole premise of this bill is to protect the patients,” Hancock said in a news conference after the vote. “We take them out of the process of balance billing, where they don’t have to initiate it.
“Today’s vote means we are one big step closer to ending surprise billing for good,” Hancock said. “With health care costs skyrocketing, this relief can’t come soon enough.”
Under the bill, which the state Senate passed on April 16, patients would still be responsible for copayments, cost sharing, and deductibles.
Hancock’s bill builds on legislation and corresponding steps by Texas authorities going back a decade. In 2009, Hancock, then a state representative, sponsored a bill to establish a mediation process for patients who had received surprise balance bills of more than $1,000. The following year, the Texas Department of Insurance (TDI) began accepting requests for mediation and saw a gradual increase in such requests as more patients and providers became aware of the program.
In 2015, Texas enacted legislation lowering the dispute claim threshold from $1,000 to $500 and added assistant surgeons to the list of providers subject to mediation. The list also includes facility-based radiologists, anesthesiologists, pathologists, ER physicians, and neonatologists. The new law increased the required notifications to patients that mediation is available to resolve billing balance disputes. Providers are also responsible for notifying patients that mediation is a protection available to them on the balance bill.
Savings to Patients
According to TDI data, surprise bill mediation has saved Texas patients more than $32.8 million in health care costs since 2015, including $8 million in 2018 alone.
A medical doctor and fellow Republican oppose Hancock’s legislation.
“Senate Bill 1264 is a step in the wrong direction,” said Sen. Donna Campbell (R-New Braunfels and an emergency room physician) in a statement. “This bill moves our state closer to single payer medicine and further away from doctors and hospitals being able to operate in a free market.
“The state cannot simply wave a magic wand and make the real costs of providing health care disappear,” Campbell stated. “These costs have to be made up somewhere, either by reducing access to care or through insurance companies raising their premiums. Neither is a decent outcome for patients. Surprise medical bills do exist, not because of greedy doctors but because health insurers who charge thousands of dollars in premiums surprisingly don’t pay for health care when families need it.”
The Senate also passed Hancock’s S.B. 1530, a companion bill which would allow federally regulated self-funding health benefit plans to opt in to the existing TDI surprise billing mediation plan. Both bills have been sent to the House, where they are awaiting action.
“It’s naïve simply to argue surprise medical bills are the result of stingy insurance companies,” said Devon Herrick, Ph.D., a policy advisor for The Heartland Institute, which publishes Health Care News. “If you look at where surprise bills originate, it’s those providers patients personally do not choose or even meet prior to care. These include emergency room physicians, anesthesiologists, radiologists, pathologists, and assistant surgeons.
“These aren’t the trusted physicians with whom patients have established a trusting relationship,” Herrick said. “Especially in the ER, patients have little discretion to go elsewhere. Thus, patients are stuck with balance billing from doctors they cannot choose or reject.”
Herrick says what might work best is baseball-style arbitration, where both sides come to the table with their last, best offer and accept the choice of an independent person to decide between the two.
“Although the bill is not perfect, it is better for consumers than the current system,” said Herrick. “Reforming surprise medical bills has taken many years and numerous attempts, with incremental progress each session. This is not uncommon for public policy problems of this nature.”
The bill states a standard of “reasonable” be used in arbitration and gives seven criteria an arbitrator may use.
Bonner R. Cohen, Ph.D., ([email protected])is a senior fellow at the National Center for Public Policy Research and a senior policy analyst with the Committee for a Constructive Tomorrow (CFACT).
Texas state Sen. Kelly Hancock (R – North Richland Hills) https://senate.texas.gov/member.php?d=9