Information Accuracy and Oversight Will Minimize Surprise Billing

Hearing to Review Interim Charges on Implementation of SB 507 (Expanded Mediation and Surprise Billing) by Ray Callas, MD

Senate Business and Commerce Committee
Jan. 23, 2018

Chairman Hancock and members of the Senate Business and Commerce Committee, thank you for allowing me to testify today on this interim charge. 

My name is Dr. Ray Callas. I am a practicing anesthesiologist from Beaumont, and today I am testifying on behalf of the Texas Medical Association and its more than 51,000 physicians and medical students.

SB 507 Expanded Mediation
I would like to start by thanking this committee for your work on Senate Bill 507 by Senator Hancock, which expanded the mediation process for certain out-of-network claims. Mediation is working well in Texas and has offered patient protection in light of health plans narrowing their networks. The expanded mediation model under SB 507 is currently in the rulemaking process at the Texas Department of Insurance (TDI).

It is also important to note that SB 507 applies to claims for health care or medical services or supplies provided on or after Jan. 1, 2018, so we have yet to see the full effects of this legislation.

Once it is fully implemented, having data from the results of this expanded mediation will be extremely helpful in determining how to further protect patients who are purchasing heath care coverage.  

Consumer Information, Directory Accuracy, and Additional Network Adequacy Oversight
TMA also supported multiple pieces of legislation this past session that would have helped remedy the cause of surprise or balance bills before they even occur.

Patient information and education is critical to this. Patients and employers are purchasing their insurance with an expectation of having adequate coverage for unforeseen, as well as planned, life events.

However, consumers’ expectations are not always consistent with their plan’s design. One way to remove the “surprise” from any bill is to hold health plans and others selling insurance accountable for informing the consumer of what he or she is buying.

A study done in the past year by Policy Genius and Radius Global Research showed that only 4 percent of Americans understand what a copay, deductible, coinsurance, or maximum allowable is as it relates to their health insurance.

Last session TMA supported House Bill 477 by Nicole Collier, which would have required agents selling individual health benefit plans to explain to prospective purchasers what a copay, deductible, coinsurance, and maximum allowable are as related to the coverage they were buying.

Directory Accuracy
Additionally, accurate network directories are crucial to preventing insured people from unexpectedly going out of network and to aid consumers in evaluating the strength/weakness of a health plan’s network before purchasing it. Yet it has been widely reported that these directories contain many inaccuracies.

TMA’s biennial physician survey showed 60 percent of physicians were not listed when they were participating in a health plan network, and 56 percent were listed as in-network when in fact they were not.

Health plans are required to post their network directories online, and generally are required to be update them only monthly, allowing bad information to linger even when the plan has all the available information to update the directory (e.g., when a plan has terminated a contract or entered into a new contract).

House Bill 2210 by Senator Hancock would have required health plans to update their networks more frequently (every five business days) and also would have required TDI to perform an investigation of a health plan if the plan appeared to be engaged in a pattern of maintaining an inaccurate directory regarding the basic network participation status of its physicians and providers.

OPIC Enforcement
Health plans often try to deflect from their network adequacy obligations and their role in creating “surprise bills” by stating that physicians are choosing not to be in network. However, it is important to note that physicians want to be in network.

In fact, TMA’s biennial physician survey shows the vast majority of physicians across specialties (89 percent) are contracted with at least one major health plan. Moreover, the majority of physicians feel they must contract with at least one commercial payer to have a financially viable practice.

Our survey shows, among physicians with no contracts who attempted to join a network, 67 percent received either no response or a “take it or leave it” offer. Thus, when physicians are not part of a network, it is generally because they either have no choice or no bargaining room.

TDI generally has strong network adequacy rules; however, increased network oversight and enforcement is needed. TDI’s PPO network adequacy rules are reliant on data self-reported by the health plans, and many health plans are currently receiving waivers from TDI’s network adequacy requirements.  

If the legislature were to require greater network oversight and enforcement of TDI network adequacy regulations, this would address surprise bills on the front end rather than the back end, as mediation does.

TMA has supported legislation over the past two sessions that would have allowed the Office of Public Insurance Counsel (OPIC) to help monitor network adequacy.

OPIC staff testified that they not only had the current resources but were willing to help in this endeavor of patient protection and advocacy. We hope this committee further explores this option.

We look forward to working with this committee to further patient protections that also allow physicians to function in the free market. Thank you.

Last Updated On

May 08, 2018