Dec. 5, 2016
The Texas Medical
Association (TMA) and its physician members recognize surprise medical billing
is a problem, and are offering lawmakers solutions that address the root
causes. Physicians point to a confusing health insurance system they say leaves
policyholders/patients too-often unaware, subject to unexpected out-of-pocket
costs, inadequate coverage, and physicians frustrated by limited access to patients
and their health plan networks.
insurance doesn't cover what it used to cover,” says TMA President Don R. Read,
MD. “The patient is paying a lot of money for health insurance, but the
insurance companies are covering less and less. Now, we have to do our best to
find a solution."
TMA’s recommendations to the
2017 Texas Legislature call for clamping down on inadequate insurance plan
networks and much better consumer education.
“We don’t want our patients surprised
by bills,” Dr. Read explained. “We don’t want our patients to suffer a
financial crisis in the wake of a medical crisis.”
Background: The Problem and Its Causes
Sometimes insured patients
seek health care and receive a “surprise” medical bill they did not expect from
a physician, provider, or facility. They are billed for the remainder of the
medical charges left unpaid by the health plan, hence the name “balance
billing.” Balance billing or surprise billing has become so big a problem the
Texas Legislature passed a law in 2015 to mitigate the situation, and held
hearings about it this summer.
The problem with surprise
billing, according to physicians, is the health plans established the system in
which surprise bills occur, but they are not being held accountable. Insurance
companies set up health plan networks with groups of physicians, hospitals, and
health care providers who have agreed to provide medical services to the insurance
plan's members at a negotiated rate. However, many of the plans have limited
networks of physicians and providers, limited care coverage, or high
deductibles. As a result, patients often receive medical treatment out-of-network
— resulting in the insurer paying less for services — or care that is not fully
covered. When either happens, the patient discovers the insurance company pays
less than what a doctor charges, leaving the patient to pay the “balance” of
the bill; an unwelcome surprise.
One big way the health plans
are cutting their costs is by severely limiting which physicians, hospitals,
and providers they include in their networks. Physicians can be in-network
under contract with a health insurer for some of the health plans it offers,
only to be excluded by that insurer from other plans; or the insurer won’t
contract with the doctor at all. Policyholders are left with fewer in-network
physicians to see for care. These health plans have “narrow networks,” a cost-saving
tactic insurers are using more and more often, especially in Texas. A recent University of Pennsylvania study
rated 45 percent of the Affordable Care Act (ACA) networks in Texas as
“x-small” and 27 percent as “small.”
Why does this matter? Health insurance
pays more of a patient’s bill if he or she receives care from an in-network
physician. If an out-of-network doctor provides the care, the plan pays a
fraction of the bill, based entirely on what the insurance company chooses to
pay. The policyholder — the patient — is left to pay the balance of that fraction.
(See page 8 of this report for an
Bottom line: the smaller the
network of physicians, the more often the patient will receive out-of-network
care, resulting in savings for the insurance company and surprise bills for the
Most physicians want to be
in-network with large insurance companies and a majority are in at least one
network. In a recent TMA survey, about one in four physicians said they tried
to join a local network during a two-year period. Of that group, 29 percent got no answer from the
insurer to their request, 32 percent got a payment offer that was too low for
them to accept, and just 39 percent received a contract to join the network.
plans sell insurance policies promising robust networks of physicians and
providers, when often that’s not the case. Nearly two-thirds of Texas physicians
(61 percent) report they had found times they were listed as being in a health
plan’s network when really they were not. And insurers have hundreds of different
plans, each with its own network. Unsuspecting patients visit that supposedly
in-network doctor’s office (who might be under contract in some of the
insurer’s health plans but out-of-network for this patient’s plan). Boom:
Out-of-network benefits kick in, and the patient pays more.
Ray Callas, MD, chair of the TMA Council on Legislation, says physicians join
networks to gain access to patients and business resources, but enrollment can
be frustrating. “Doctors are honestly trying to negotiate with the insurance
companies,” says Dr. Callas, “but I am concerned that physicians are not being
allowed in because insurance companies don’t want to pay a fair or customary
rate, or they are just deciding not to go in network with that physician or
physician group.” He has experienced this in his own medical
practice, which has successfully contracted to be in-network with nearly all
plans offered in Beaumont. One outlier insurer, however, has repeatedly refused
to contract with his group.
TMA supports legislation that would strengthen insurance
plan networks and arm patients with more information to lessen the likelihood
of receiving a surprise bill, while preserving physicians’ rights to bill for
care they provide. So far, Dr. Callas says he is encouraged by the response to TMA’s
proposals. "The biggest request I get from legislators and communities is that
we keep our solutions short and simple,” Dr. Callas says.
During a State Senate
Business and Commerce Committee hearing in May, Dr. Callas presented TMA’s proposal
for the Texas Department of Insurance (TDI) to enforce insurance network
adequacy, order the health plans to fix their notoriously inaccurate in-network
directories, and require insurers to submit a report on network adequacy in
April of each year. In the three years since insurance companies were required
to publicly report their network adequacy, TDI has not once levied a fine on
insurance companies for a lack of network adequacy.
multi-platform solutions for the surprise bill problem would:
- Increase TDI's
network adequacy oversight of health plan networks to decrease the number of
out-of-network physicians and avoid the need for balance bills.
- Maintain the
current $500 balance bill threshold for mediation to include all out-of-network
physicians, health care professionals, facilities, and vendors.
TMA also says plans need to
protect patients with better consumer education:
physicians, and providers would be required to inform patients "about the
network status of the facility-based physicians and others who may participate
in their care and bill for service" using a standard form.
- Insurers selling
PPOs would be required to include "a clear and conspicuous" warning
outlining the results of receiving an out-of-network service.
- Insurance brokers
and agents would be required to educate patients on the health plans they buy
and clearly outline out-of-pocket expenses for in-network and out-of-network
Dr. Callas says, "The
House and the Senate see a lot of positives coming from Texas. They want us to
be the ones that solve the problems and come up with solutions. Meanwhile, our
patients trust us to hold people accountable and I want to maintain that trust.”
For more information about surprise
medical billing, TMA’s legislative proposals, and an animated video explaining
surprise billing in terms everyone can understand, go to https://www.texmed.org/surprisebills.
TMA is the largest state medical society in the nation,
representing more than 49,000 physician and medical student members. It is
located in Austin and has 110 component county medical societies around the
state. TMA’s key objective since 1853 is to improve the health of all Texans.
Contact: Brent Annear (512) 370-1381;
cell: (512) 656-7320; email: brent.annear[at]texmed[dot]org
Cooper (512) 370-1382; cell: (512) 650-5336; email: marcus.cooper[at]texmed[dot]org
Connect with TMA
Facebook, and Instagram.
out MeAndMyDoctor.com for interesting and timely news on health care issues and