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Governor Abbott Signs Legislation to Better Protect Consumers Against Surprise Medical Bills

Wednesday, May 24, 2017  
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AUSTIN—The Texas Association of Health Plans (TAHP), the statewide trade association representing commercial and public health plans operating in Texas, today applauded Governor Greg Abbott’s signing of Senate Bill 507, legislation expanding protections for Texas consumers against the growing practice of surprise medical billing or “balance billing”, authored by Texas Senator Kelly Hancock and Representative John Frullo, into law. Surprise or balance billing occurs when insured patients receive out-of-network care, often in an emergency care situation, and are billed by a provider for fees that exceed the amount paid by the insurance—charges that can be 10-20 times the going rate. Texas is home to some of the highest surprise billing rates and emergency care costs in the nation.

SB 507 would expand mediation protections, already being successfully used on a limited basis by consumers in Texas, for insured consumers with PPO plans to all out-of-network emergency providers, including all freestanding emergency rooms, and all of out-of-network providers working at a network facility. Mediation is a process by which consumers can challenge surprise medical bills and leave the dispute to the insurer and provider. This legislation builds on a law written by Sen. Hancock in the 84th Legislature that made mediation available to consumers who were balanced billed by six types of facility-based providers: radiologists, anesthesiologists, pathologists, ER physicians, neonatologists and assistant surgeons.

“With some of the most expensive ER costs and highest rates of out-of-network ER docs in the country, Texas is ground zero for exorbitant, surprise, out-of-network emergency medical bills, and Texas patients are paying the price,” said Jamie Dudensing, TAHP CEO and a former practicing nurse. “Consumers have long-deserved the ability to challenge these expensive medical bills, and this legislation will go a long way to empower them with the tools they need to do just that. TAHP applauds Chairmen Hancock and Frullo for introducing this legislation and Governor Abbott for championing Texas consumers by signing this bill into law.”

Texas is home to:

  • Some of the highest rates of out-of-network ER physicians: 50% of ER physician claims are out-of-network
  • Some of the highest rates of surprise billing in the U.S.: McAllen, TX has seen 89% surprise billing rates
  • Some of the highest emergency care costs: Texas ER spending by a major health plan is 67% more expensive than the rest of the nation
  • Some of the highest average ER facility charges: Texas’ charges are 36% higher than the rest of the country
  • Highest rates of freestanding ERs, which are chronically out-of-network: Over 200 FSERs in Texas – more than half nation’s total population of freestanding ERs
  • Texans use emergency departments 22% more than the rest of the country

Specifically, SB 507 would:

  • Expand mediation protections to consumers that have a PPO plan to address balance billing through mediation, to all out-of-network emergency providers and to all out-of-network providers working at a network facility.
  • Allow mediation of balance bills from all types of out-of-network providers treating patients at in-network hospitals and other facilities, including free-standing emergency departments. (Current law applies only to the six listed types of facility-based physicians: radiologists, anesthesiologists, pathologists, ER physicians, neonatologists and assistant surgeons).
  • Allow mediation of balance bills for emergency care from any provider or facility of emergency care services, including freestanding emergency departments.
  • Expand disclosure requirements regarding network status and balance billing by insurers, facilities and other health care providers, including the requirement that the following statement be included on balance bills: “This is a balance bill that may be eligible for mediation.”
  • Expand mediation protections to the Teachers Retirement System (Already applies to the Employee Retirement System).

Additional resources on emergency medical costs in Texas can be found below:

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