One of the most contentious issues of the 2005 legislative
session was an effort by health insurers to pass laws that would
have prevented out-of-network physicians from billing their
patients, establishing government-imposed price controls based on
arbitrary rates set solely by the plans, and refusing to honor an
assignment of benefits.
TMA's goal leading up to and during the 2007 legislative session
was to reframe the debate. Instead of focusing on Band-Aid
solutions, such as physicians' balance billing their patients, TMA
chose to focus on the root cause of the problem - health insurers'
inadequate networks and their stranglehold on patient health care
TMA started early in the session educating legislators that
balance billing was merely a symptom of a much larger problem.
Passing laws to prevent balance billing was side-stepping the real
issue. TMA argued that patients need the ability to determine which
physicians are participating in their plan's network and ultimate
financial responsibility. Legislation was needed to empower
patients so they can make informed health care decisions for
themselves and their families.
TMA strongly advocated that legislation should offer incentives
to health plans to improve the reliability and practicality of
information they provide to patients and physicians, especially
information on physician network adequacy and patient financial
Senate Bill 1731 by Sen. Robert Duncan (R-Lubbock) and Rep. Carl
Isett (R-Lubbock) was the broadly supported response to the
concerns raised in 2005 as well as the work done during the
interim. The primary goal of SB 1731 is to promote consumerism and
transparency in health care. The bill takes important first steps
to ensure patients and their physicians have access to meaningful
information to use to make effective decisions about treatment
options. The information also will aid patients in understanding
their health plan benefits and financial obligation. To date, most
if not all of this information has been maintained by health plans
with limited access for patients.
Reps. Diane White Delisi (R-Temple), Patrick Rose (D-Dripping
Springs), and John Zerwas, MD (R-Richmond), joined Senator Duncan
as joint sponsors of the bill in the House. SB 1731 also received
the support of these stakeholder groups: TMA, the Texas Hospital
Association, the Texas Association of Health Plans, and numerous
medical specialty societies, health care practitioner associations,
and health care facility associations.
To ensure all stakeholder concerns were heard and addressed,
Senator Duncan convened stakeholder meetings early in the session.
The meetings also were attended by legislators interested in the
issue; these included Representatives Isett, Rose, Larry Taylor
(R-Friendswood), and Dan Gattis (R-Georgetown). After several
meetings, stakeholders reached a compromise, and bill language was
drafted to modify the bill as it was filed. Much of that compromise
was included in the bill's final version.
Unlike its predecessor (Senate Bill 1738 from the previous
session), SB 1731 navigated the legislative process without hitting
any serious snags, and Gov. Rick Perry signed it into law.
The bill requires that the Department of State Health Services
(DSHS) and the Texas Medical Board (TMB) create a "Consumer Guide
to Health Care" on their respective Web sites. The guides must
inform consumers how hospitals, physicians, and other health care
facilities price their services and supplies. The guides must
explain how average charges for inpatient stays, outpatient
procedures, and physician medical services may vary from the
actual, billed charge for a particular hospital stay, outpatient
procedure, or medical service based on the patient's medical
condition, diagnosis, and recommended treatments.
Consumers will be advised that they may be personally
responsible for paying amounts not paid by their health plan
depending on their specific coverage, deductibles, copayments,
coinsurance, and whether the facility or physician is participating
in their health plan's network. Consumers will be directed to
contact their health plan for information related to their personal
coverage and out-of-pocket costs.
SB 1731 charged health care facilities, health plans, and
physicians with making available to patients more information about
the cost of particular services, policies, and procedures on
payment of services and notice of facility and physician
participation in the patient's health plan network.
Health care facilities, including hospitals, birthing centers,
and ambulatory surgical centers, must develop policies and
procedures informing patients: (1) about possible patient discounts
if the patient is uninsured or financially or medically indigent,
(2) if late payments will incur interest, and (3) how to file a
complaint about charges for medical services. Patients who are
admitted for inpatient or outpatient services or receive emergency
care will receive written notice that (1) the facility is in the
patient's health plan, (2) the patient's health plan may not cover
some physicians within the facility, and (3) these physicians may
bill the patient directly for medical services.
A notice posted in the facility's waiting room will inform
patients they may request the facility's billing polices. Patients
choosing elective, inpatient services or non-emergency, outpatient
surgery may request a cost estimate, due within 10 days. After
receiving medical services, the patient may request up to two
additional statements for free. The facility will refund a patient
overpayment within 30 days. If the patient and the facility cannot
resolve a billing disagreement, the facility must inform the
patient how to file a complaint with DSHS.
Health plans must report to the Texas Department of Insurance
(TDI) aggregate reimbursement rates by region. Patients will have
access to this information. Health plans, both HMOs and preferred
provider benefit plans (PPBPs), must post this information on their
Web site so patients can better compare health plans: (1) patient
satisfaction; (2) quality of care; (3) coverage areas; (4)
accreditation status; (5) cost of premiums and increases; (6) cost
of different plans; (7) range of plan benefits; (8) amount of
patient copayments and deductibles; (9) accuracy and speed of
claims payment to patients; and (10) number of physicians and
providers in the plan and their credentials. Much of this
information previously has not been collected from PPBPs. As a
result, patients did not have the ability to compare plans.
Patients will receive written notice that the health plan
network may not include all physicians providing medical services
in a facility, and that the physicians may bill the patient
directly for the amount the health plan does not pay. The health
plan's physician directory or Web site must identify clearly
facility-based physicians not covered by the patient's health plan
by health care facility.
Patients' explanation of benefits must identify when their
health plan has paid a physician not in the health plan network,
and inform patients they may contact TDI's Consumer Protection
Division to file a complaint about their health plan's payment.
Patients may request an estimate from their health plan, due within
10 days, detailing what the health plan will cover for proposed
medical services and how much the patient will owe out of pocket.
TDI may penalize health plans that violate these requirements.
Physicians will be required to implement billing policies and
procedures that inform patients about possible patient discounts
for medical services, if late payments will incur interest, and how
to file a complaint about charges for medical services. A notice
posted in the physician's waiting room will inform patients they
may request a copy of the practice's billing policies.
Patients may request an estimate from the physician, due within
10 days, of the cost of proposed medical services and how much they
will owe out of pocket (applies to out-of-network services and
uninsured patients.) After receiving medical services, the patient
may request up to two additional statements for free. The physician
will refund a patient overpayment within 30 days. The bill from a
physician who is not in the patient's health plan will state that
(1) the physician is not in the patient's health plan, (2) the
patient's health plan did not cover the physician's total charge
for medical services, and (3) the patient can call to discuss
alternative billing arrangements. It also will include the
physician's billing phone number and information on how to file a
complaint with TMB. The physician's office will not report to a
collection agency a patient who makes payments to the physician
according to an alternate arrangement. TMB may penalize physicians
who violate the established billing procedure requirements.
Lastly, included at the strong urging of TMA, the bill directs
TDI to appoint an advisory group to conduct a study of the adequacy
of health plans' facility-based physician networks. The advisory
committee will be composed of representatives for physicians,
hospitals, health plans as well as the associations that represent
those groups. The advisory group must report its findings to the
Texas Legislature and other government officials no later than Dec.
1, 2008, in time for the beginning of the 2009 legislative
SB 1731 becomes effective Sept. 1, 2007. However, DSHS, TMB, and
TDI have until May 1, 2008, to adopt rules implementing the bill's
provisions with the exception of rules relating to TDI's collection
of health plan data, which must be adopted no later than Dec. 31,
Other Bills Addressing Balance Billing
Early in the session, several legislators were concerned about
physicians who choose not to contract with a health plan and
balance bill their patients. Several of the bills filed - House
Bill 139 by Rep. Jim Jackson (R-Dallas), House Bill 1905 by Rep.
Todd Smith (R-Euless), and House Bill 2199 by Rep. Larry Taylor
(R-Friendswood) - would either have created onerous administrative
requirements on balance billing or implemented an outright
prohibition of balance billing. Senate Bill 23 by Sen. Jane Nelson
(R-Lewisville), which was amended, would have essentially created a
state-sanctioned network of non-participating physicians. The
amendment was removed from the bill in conference committee, but
the angst about balance billing remains. TMA will continue to work
during the interim to educate legislators on this issue.
Health Care Transparency Bills That Passed
One of TMA's top priorities for the 2007 session was to build upon
current law to encourage real-time benefits and coverage inquiries,
real-time claim adjudication, and payment of deductibles at the
point medical services are provided. Legislation that was passed -
House Bill 522 by Rep. Beverly Woolley (R-Houston) and Senator
Duncan - is the right step toward that goal.
HB 522 creates a technical advisory committee on electronic data
exchange that will consist of representatives for physicians,
hospitals and other providers, higher education institutions,
health plans, consumers, health care administrators of the Office
of Public Insurance Council, the Texas Health Insurance Risk Pool,
and the Department of Information Resources. The advisory committee
is responsible for directing TDI on the technical aspects of using
Health Insurance Portability and Accountability Act (HIPAA)
transaction standards and the rules of the
Affordable Quality Healthcare Committee on Operating Rules for
for requiring health plans to provide access to information that
will enable physicians and other health care providers, at the
point of service, to generate a request for eligibility
information. (Specifically, the advisory committee will guide TDI
on the data elements health plans should provide via real-time
eligibility and coverage inquiries to patients and physicians.) The
advisory committee must submit its recommendations by Dec. 1, 2008
for statewide implementation. The 2009 legislature will consider
Second, HB 522 requires that an identification card pilot
program begin no later than May 1, 2008. The pilot will examine
identification card information, technology, and the
confidentiality and accuracy of the required identification card
information. TDI will determine the location of the pilot and the
participating health plans. The results of the pilot will be
provided to the 2009 legislature.
The bill became effective immediately. TDI already has begun to
solicit nominations for advisory committee members. TMA has
responded to TDI's request.
Expedited Payment During Credentialing
House Bill 1594 by Rep. John Zerwas, MD (R-Richmond), and Sen. John
Carona (R-Dallas) was one of the session's unexpected bills.
Representative Zerwas, an anesthesiologist from the Houston area,
had personal experience recruiting a new physician for his medical
group then waiting months for the new physician to be added to the
group's contracted health plans.
HB 1594 would allow a physician who joins a medical group
already contracted with a health plan to be paid as if that
physician were participating while his or her application is being
Due to its caption relating to "expedited credentialing," the
bill was opposed by the Texas Association of Health Plans (TAHP)
early in the session, believing that the bill was an attempt to
circumvent health plan credentialing requirements. However, after
clarifying some of the bill's provisions to more clearly indicate
the bill's intent, which was to address payments to physicians,
TAHP withdrew its opposition.
The bill requires that the physician applying for credentialing
must be licensed in Texas, be in good standing with TMB, and submit
all documentation and information required by the health plan. The
physician also must agree to the terms of the contract between the
medical group and the health plan. Once the physician has provided
the information required by the health plan, the physician will be
paid as if he or she were in the health plan's network. The
physician also will be allowed to collect in-network copay amounts
from the patient.
If the physician does not meet the health plan's requirements
for participation in its network, the health plan may recover from
the physician or the medical group the difference between payments
for in-network benefits and out-of-network benefits. The physician
may keep any patient in-network copayments already collected or in
the process of being collected as of the date of the health plan's
determination. However, the patient is not responsible for the
difference between in-network copayments paid during the
credentialing process and out-of-network benefits if the physician
does not meet the health plan's requirements.
Pending the physician's approval during the credentialing
process, the health plan may exclude the physician from its
directory and Web site listing of participating physicians. In the
case of an HMO, the physician may not be selected by a patient as a
primary care physician.
HB 1594 becomes effective Sept. 1, 2007. [At this time,
TDI has indicated that it will not do rulemaking for this bill.]
The law also applies to Medicaid and CHIP health plans,
though the state had indicated these plans will not be required to
adhere to the changes until the state implements a contract
amendment effective in Spring 2008.
Billing for Anatomic Pathology Services
Senate Bill 1832 by Senator Duncan and Rep. Dan Gattis
(R-Georgetown) addresses billing for anatomic pathology services.
The bill provides for disciplinary action and penalties if a
"person" (both individual and entity) that does not perform or
directly supervise anatomic pathology services fails to disclose
that information in the bill to the patient, the insurer, or other
third-party payer, or in an itemized statement to the patient.
Information that must be provided includes: the name and address of
the physician or lab that provided the services and the net amount
paid for the services. SB 1832 becomes effective Sept. 1, 2007. TMB
is responsible for adopting rules to implement its provisions.
Modification of Prompt Pay Underpayment Penalty
Senate Bill 1884 by Sen. Tommy Williams (R-The Woodlands) and
Rep. Senfronia Thompson (D-Houston) modifies the underpayment
penalty calculation under the Texas prompt pay requirements. The
bill was agreed to by TMA, the Texas Hospital Association, and the
Texas Association of Health Plans. The bill caps the penalty that
can be levied at the billed charge of the amount underpaid plus
interest if the penalty is not paid within 90 days. Physicians
gained an additional 90 days to report underpayments to health
Health Insurance Reform Bill Near Misses
The following are bills that TMA strongly supported but that did
not muster sufficient legislative support to progress this
TMA has actively pursued legislation to create physician contract
standards with health plans for the last several sessions. The 2007
session was no different. House Bill 2016 by Rep. John Smithee
(R-Amarillo) was this session's standardized contracts bill.
Referred to as the "Fair Contracting Bill," HB 2016 would have
ensured that a physician was properly notified before health care
contractors gave access to the physician's discounts. Additionally,
the bill would have required contracts to include a summary
disclosure of selected important contract terms the bill's
provisions would have applied to contracts issued after the bill's
compliance date of Jan. 1, 2008.
As expected, TAHP, the Texas Association of Business, the
American Association of PPOs, and several individual health plans
opposed the bill. Although HB 2016 was strongly supported by TMA,
the Texas Academy of Family Physicians, and other physician groups,
the bill was left pending after receiving a hearing in the House
Regulation of Secondary Physician Discount Market
Physician frustration with the unauthorized leasing or selling of
discounts for their services, also referred to as "rental networks"
or "silent PPOs," has surfaced in the past two years. Statutory
language currently exists in the Texas books (Senate Bill 130 by
Senator Nelson passed in 1999) to regulate rental network and
silent PPOs. However, TDI believes they do not have the authority
to regulate such arrangements. Rental networks often sell or broker
access to the physician discount without providing any
consideration to the physician, such as patient steerage. AMA also
has been pursuing solutions to this growing problem at the national
level with the National Conference of Insurance Legislators and the
National Association of Insurance Commissioners.
House Bill 839 authored by Rep. Craig Eiland (D-Galveston) was
seen by TMA and the AMA as a test balloon. The bill would have
provided clear direction for TDI to regulate the secondary discount
market. Any brokering of physician discounts would have required
the physician's express permission and would have protected
patients from paying more when their health plan paid less as the
result of taking a secondary discount. The bill was approved by the
House Insurance Committee but died in House Calendars. The House
subsequently amended the bill's provisions to a Senate bill, but
the language was later removed in Conference.
Health Plan Report Cards
One of the essential elements to health care transparency for
employers and patient is to have more information on health plans'
business practices. House Bill 2329 authored by Rep. Todd Smith
(R-Euless) would have defined the following terms for both PPBPs
and HMOs: "direct losses incurred," "direct losses paid," "direct
premiums earned," "premium to direct patient care score," "network
adequacy score," "claims paid score," "allowable cap score,"
"expected profit score," and "justified complaint." The bill
directed TDI to develop and issue an annual consumer report card
that publicized these scores in a format that would have permitted
direct comparison of health plans. Even though the bill itself was
left pending on the General State Calendar, selected elements of HB
2329 were included in SB 1731.
Tiered networks and economic credentialing
All major health plans in Texas have, or are implementing, tiered
physician networks. Those who score high in the health plans'
evaluation scheme are placed in a preferred network tier that
offers employers lower premiums and/or patients lower copays. Those
physicians scoring lower are shunted into a less-desirable tier
with higher premiums and/or copays. The criteria used by health
plans are based solely on bills and claims data.
Sen. Robert Deuell, MD (R-Greenville), who had a negative
personal experience with a health plan tiered networking scheme,
authored Senate Bill 1143. The bill would have required health
plans that rank physicians based on "quality" and/or "efficiency"
to notify physicians of its criteria for evaluating physician
performance prior to the beginning of the evaluation period. It
also would require that physicians who identify errors or
inaccuracies have the right to due process. SB 1143 passed the
Senate, but was left pending in the House Insurance Committee
without receiving a hearing.
Repeal of Uniform Policy Provision Law (UPPL)
Currently, when a person is injured while intoxicated or under the
influence of narcotics (not prescribed by a physician or health
care practitioner), a health plan may deny coverage for medical
services. The denial of services is allowed by Texas' Uniform
Policy Provision Law (UPPL). House Bill 634 by Rep. Craig Eiland
(D-Galveston) would have prohibited health plans from excluding
coverage for injuries acquired while intoxicated or under the
influence. After a hearing by the House Insurance Committee, the
bill was left pending. This is the third session Representative
Eiland has authored legislation to repeal the Texas UPPL.
Managed Care/Insurance TMA Staff Team
Legislative: Patricia Kolodzey
Policy: Teresa Devine and Rich Johnson
Legal: Lee Spangler
Scope of Practice
Retail Health Clinics
Corporate Practice of Medicine
Health Care Funding
Medicaid, CHIP, and the
Emergency Medical Services and
Medical Science and Quality
Physician Workforce, Licensure,
Health Information Technology
Franchise Tax Reform