New Texas Laws Create Transparency in Health Care Coverage

For Immediate Release
July 23, 2007

Contact: Pam Udall
phone: (512) 370-1382 
cell: (512) 413-6807
Pam Udall 

Brent Annear
phone: (512) 370-1381
cell: (512) 656-7320 
Brent Annear  

 

Health care coverage is about to become clearer for Texas patients, thanks to a new law the legislature passed this session.

The new legislation will ensure that Texas employers, their employees, and patients have access to health care information about medical service costs and patient out-of-pocket expenses. Texas Senate Bill 1731 by Sen. Robert Duncan (R-Lubbock) calls for transparency of health care costs from health insurers as well as hospitals, physicians, and other health care professionals so patients can make better and more informed health care decisions.

Doctors have heard repeatedly that their patients know they have health insurance but do not know which medical services are covered, the amount of their copay or deductible, or which physicians are currently in their health plan. Patients ask their doctor for help, but neither the physicians nor their staff usually have the patient's health insurance information - only the insurer has access to this data. The new law, which the Texas Medical Association (TMA) strongly supported, should give patients and physicians access to that information. "This is the first step toward true health insurance transparency about what is available and what is not available for patients," said William W. Hinchey, MD, TMA's president.

A key component of the bill requires the Texas Department of Insurance to collect and show consumers health insurer, hospital, and physician information including billing, coverage areas, plan costs, and premium increases, and the number of health care providers. Physicians, hospitals, and insurers will be required to provide patients with billing and collection policies, specific cost estimates, and other information related to health care coverage and costs. The law also requires health plans to report where they spend health insurance premium dollars, and how adequate their physician network is - whether the plan has enough in-network specialists nearby to meet patients' varying medical needs. Gov. Rick Perry signed SB 1731 into law in June, and it will go into effect on Sept. 1.

"It was time for positive change for patients. Up until now, they too-often wondered, is this hospital or this physician in-network or out of network?" explained Dr. Hinchey. "They wondered what portion of the bill they would be responsible for paying, and even what treatments are covered."

Patient stories abound. One patient received bills for medical procedures that her insurance supposedly covers, and not until 12 phone calls later did the insurer admit its mistake. Another woman knew she had met her deductible and found an in-network physician specialist for care, yet she received a surprise bill because her insurance actually includes two deductibles, and she had not met the second deductible. Another patient's insurer does not cover a nearby in-network specialist her daughter needs but promises to consider it in-network coverage if no physician is available for 75 miles. Yet the insurer still only paid one-sixth of the bill, charging the patient the rest, because of differing definitions of "in-network."  

Because they routinely hear stories like these, Texas physicians told lawmakers that patients need accurate, current, and honest information on copays, deductibles, and health plan networks. Patients need a clearer picture, doctors urged, to make decisions about their health care - particularly as they and their employers pay steep insurance premiums.

"Open, transparent discussions have been the heart of the patient-physician relationship for centuries," said Dr. Hinchey. Yet recently, the insurer seems to be seated between the patient and physician, making treatment decisions and affecting what and how much the patient pays. And the patient's only information arrives later, in the mail, in the form of an explanation of benefits statement - which patients widely regard as difficult to understand.

Physicians hope the new law will return the information to patients and physicians, so they once again can make the best care decisions.

Other new laws TMA strongly supported and that passed include:

  • House Bill 1594 by Rep. John Zerwas, MD (R-Richmond), will prevent patients from paying out-of-network costs when seeing a physician whose new medical group already is under contract by a health plan;
  • House Bill 2015 by Rep. John Smithee (R-Amarillo) will provide employers with access to health insurance information so they can evaluate employee health care expenditures; and
  • House Bill 522 by Rep. Beverly Woolley (R-Houston) introduces a pilot project in the Houston area for health insurers to provide patients with their health insurance coverage information using smart-card type technology.

TMA is the largest state medical society in the nation, representing nearly 42,000 physician and medical student members. It is located in Austin and has 120 component county medical societies around the state. TMA's key objective since 1853 is to improve the health of all Texans.

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Last Updated On

October 27, 2015

Originally Published On

March 23, 2010