Texas on brink of banning surprise medical bills

A law to protect Texas patients against surprise medical bills after emergency room treatment is headed for Gov. Greg Abbott to sign into law. A law to protect Texas patients against surprise medical bills after emergency room treatment is headed for Gov. Greg Abbott to sign into law. Photo: Jay R. Jordan Photo: Jay R. Jordan Image 1 of / 5 Caption Close Texas on brink of banning surprise medical bills 1 / 5 Back to Gallery

Landmark Texas legislation to protect unsuspecting patients from surprise medical bills and shield them from disputes between insurers and health care providers will soon head to the governor's office to sign into law.

Gov. Greg Abbott late Thursday tweeted "It's Gonna Happen!" The measure will go into effect Jan. 1, 2020.

"I think we got there," said Sen. Kelly Hancock, the Republican author of SB 1264 from suburban Fort Worth, on Tuesday. Hancock's fight for patient protection has been more than a decade in the making.

The victory became apparent when the legislation passed unanimously in the House on Tuesday and Hancock agreed to changes on Wednesday. The measure passed in the Senate, 29-2, in April.

The sweep of the law's scope has caught national attention as health economists have long tagged the state as having one of the worst records for surprise medical bills in the United States. But suddenly, with the passage of the law and others this session, Texas has been catapulted into having some of the strongest patient protections in the nation.

SB 1264, along with complementary HB 3933, prohibit doctors from charging emergency room patients any or all of bill that insurance does not pay. For years, patients have been financially devastated by the business model known as balance billing.

Also, under the new law, patients who have no control over who treats them will also be protected against balance billing, such as an out-of-network doctor at an in-network hospital or out-of-network lab work. They will only be responsible for in-network rates for out-of-pocket costs such as co-pays and deductibles.

See the Houston Chronicle's full coverage on medical billing: The Price You Pay

This specific legislation, however, does not shield all patients, only those with state-regulated plans. Separate legislation, also introduced by Hancock, to allow those with federally-regulated, self-funded plans to opt-in to the protection failed this session. Many large employers use self-funded plans, paying for claims directly.

Hancock's legislation on surprise medical bills was introduced Feb. 28 and later merged with a similar measure by Sen, John Whitmire, D-Houston, and Rep. Tom Oliverson, R-Harris County. Joining forces was considered a strategic move to show unity against opposition percolating within the health care field, lawmakers said at the time .

The powerful Texas Medical Association, which represents Texas doctors, initially opposed the Hancock measure, arguing it tilted the scale in favor of insurers. The group has since said it supports the legislation.

In addition to ending much of the state's balance billing, the new law would also replace Texas' existing mediation process with "baseball-style" arbitration where insurers and providers must submit a one-time, best-and- final offer for reimbursement. An independent arbiter would then determine how much gets paid.

Key to the new arbitration system will be removing patients from the process, Hancock said. Currently they not only must initiate mediation but often are cajoled into taking sides.

"I'll tell you what, it's exciting," said Rep. Trey Martinez Fischer, D-San Antonio, who has worked with Hancock on the issue previously and introduced the House version of the legislation.

Despite more headline-grabbing bills in the 2019 session, such property tax reform and school finance, Martinez Fischer said he thought this legislation could potentially have the most direct impact on Texans.

Health economists have reported a 27 percent likelihood of Texans getting an out-of-network bill after emergency room care – nearly double the national average of 14 percent. And insurance claims data has shown two out of three out-of-network emergency physician claims in 2017 happened at an in-network facility.

UNPLEASANT SURPRISE: Decade of promises fails to halt surprise medical bills crushing thousands of Texans

Hancock introduced the first legislation on the issue in 2009, creating the state's current mediation system. Over the years it has been revised and strengthened twice but the problem not only persisted but worsened. At the start of this year's session Hancock and others predicted this could be the year of big change.

"I think insurance companies and providers dumped this expensive problem in consumer's lap for a long time and the legislature pushed back hard this year and fully took care of it," said Stacey Pogue, a health policy analyst at the Center for Public Policy Priorities in Austin, who has been tracking balance billing for a decade.

On Wednesday she was thrilled but also admitted surprise. "I would have said in February this is a good bill but it will not pass."

Texas lawmakers are hopeful the law could serve as a model for others, including Congress which has taken on the fight against surprise billing at the federal level.

Other patient protection measures headed for the governor include preventing disputed medical bills from damaging credit ratings, giving the state attorney general the power to go after free-standing emergency rooms that bill at "unconscionable" rates, and closing a semantic loophole on insurance coverage in the free-standing emergency room industry.

A Houston Chronicle investigation in December found many area facilities prominently advertise they "take" or "accept" insurance plans but are, in fact, out of those insurer's networks. That led to patient confusion and left them unknowingly vulnerable to high out-of-network billed charges. That practice will now be banned.