Health insurance companies are financial institutions. They collect their customers’ premiums in return for a promise to make payments when they receive medical care. Sometimes the details of that promise get lost in fine print and in complicated insurance industry practices. That leaves our patients wondering what exactly happened to the coverage they thought they bought.
Physicians care. We don’t want our patients “surprised” by bills. We don’t want our patients to suffer a financial crisis in the wake of a medical crisis.
Why are more and more Texans ending up with medical bills they never expected? Our research shows the cause is frequently insurance company tactics like high deductibles, narrow networks, unwillingness to contract, and low maximum allowables for out-of-network services. They are placing more of the financial risk and burden of surprise bills on the shoulders of our patients.
The Texas Legislature has looked at the problem of surprise billing and enacted many different fixes over the years. The mediation process in Texas is working. However, some specific actions need to take place well before our patients begin to receive any health care services. The physicians of the Texas Medical Association ask the 2017 legislature to take this balanced approach to further protect patients and their doctors from insurance company cost-shifting tactics:
Increased Network Adequacy Oversight
There must be mandatory, increased state agency oversight of the adequacy of all of an insurer’s networks, especially for the insurers that patients often bring to mediation. Prompt pay penalties the Texas Department of Insurance used to fund the now-abolished Texas Health Insurance Risk Pool could be used to hire additional personnel devoted to network oversight.
Expand the Current Mediation Process
Mediation currently pertains only to certain claims for services provided by out-of-network hospital-based physicians at in-network hospitals. In the context of the current law’s application to PPO plans and certain state employee health benefit plans, mediation for out-of-network claims should be expanded to apply to claims for:
- Services provided by an out-of-network physician or health care professional at an in-network hospital;
- Emergency care provided by an out-of-network physician or health care professional at a hospital or freestanding emergency medical care facility/department, regardless of the network status of the hospital or freestanding ER;
- Emergency services provided by an out-of-network hospital or freestanding emergency medical care facility/department; and
- Out-of-network ambulance services.
Maintain the Current Mediation Threshold and the Patient’s Role In the Mediation Process
The mediation threshold of a $500 balance after copayments, deductibles and coinsurance should be maintained. Patients must continue to be the initiators of Texas’ mediation process for the surprise bills they receive that meet the $500 out-of-network threshold. The patient should remain the connection for any discussion that takes place about what the insurer paid for the out-of-network services that resulted in the patient receiving a surprise bill.
Require Insurers to Tell Their Customers About the Network Status of Physicians and Others Who May Bill for Services as Part of Any Prior Authorized Procedure
For elective services prior-authorized by the insurer at an in-network hospital or ambulatory surgical center, insurers should be required to inform patients in advance about: (1) the network status of the facility-based physicians and others who may participate in their care and bill for services and (2) the amount of their out-of-pocket responsibility for any out-of-network services and the bill(s) they may receive.
Additionally, insurers should be required to more frequently update their network directories to provide the patient with the most accurate and up-to-date information.
Physicians should use a standard disclosure form to remind patients about which physicians and providers may be involved in their care and how to contact them.
This standard disclosure form should be provided for all planned procedures, surgeries, or deliveries. The form should instruct patients on how they may contact those physicians and providers for information regarding their network participation status and the patients’ personal financial responsibility for services they may provide. The form should include disclaimers to notify the patient that: (1) unanticipated complications or events may require other physicians or providers to provide services, and (2) if those physicians or providers do not participate in the health plan’s network, the patient may be billed for amounts not paid by the health plan.
Improve Insurance Literacy at the Point of Purchase
Insurers, brokers, and agents should be required to clearly articulate, at the time of purchase, the nuances of the care products they are selling. They need to educate consumers on the basic limitations of the plans they are buying, such as any applicable deductibles or network limitations. This will ensure consumers are educated about their out-of-pocket responsibilities both in and out of network and, as a result, reduce their surprise when they actually seek services. The statutory continuing education requirements for brokers and agents should be amended to include a health literacy component. Health literacy instruction that is specific to guiding consumers in understanding health care coverage could be recognized as a viable credit towards continuing education requirements.
Require Insurance Companies to Prominently Display a Network Warning Notice to Consumers
Insurers offering PPO products should be required to include a clear and conspicuous notice regarding the implications of using or receiving services from an out-of-network physician or provider and the potential for balance billing. This notice should be available and accessible on their websites to both potential customers and current enrollees. It should be included in all policy documents and provider directories. The notice should clearly state how payments to out-of-network physicians and providers are calculated and that patients may be required to pay more than their usual deductible, coinsurance, or copayment amounts.
Available in PDF
Texas Legislature
Surprise Medical Bills