Take Patients Out of the Middle of Balance Billing – The Right Way

TMA Testimony by Ray Callas, MD

House Insurance Committee
House Bill 3933 by Rep. Trey Martinez-Fischer 

March 26 2019

Thank you, Mr. Chairman and committee members, for allowing me to testify today. My name is Dr. Ray Callas, and I am an anesthesiologist from Beaumont. I am a member of the Texas Medical Association’s Board of Trustees and president of the Texas Society of Anesthesiologists, and today I am testifying on behalf of both entities and their nearly 53,000 members across the state of Texas in opposition to House Bill 3933 as filed.

First, I want to make clear that while we are in opposition to the bill as filed, on behalf of TMA and TSA, I want to thank Representative Martinez-Fischer for beginning a dialogue with us and having an open door and mind on how to take the patient out of the middle of surprise out-of- network billing.  

The issue of surprise out-of-network balance billing is far from new with the Texas Legislature.  In fact, the Texas Medical Association has worked over the past decade with members like Representative Martinez-Fischer to address the issue in a fair and reasonable manner, primarily through our current mediation process.  

We are very much supportive of the need to protect the patient from a surprise out-of-network bill; however, our opposition to HB 3933 is driven by the modification of the mediation process and Texas law in a way that allows insurers to have more control over the market and places more of a financial burden on physicians and their practices.  

In a surprise out-of-network billing situation, the patient and the insurer have a contractual agreement. The physician and the insurer do not. As a result, when we remove the patient from the claims settlement process, the insurer has no level of market accountability unless additional statutory protections are created.  

However, rather than creating additional statutory protections, HB 3933, as filed, relieves insurers and HMOs of their existing statutory payment obligations. HB 3933 gives insurers unilateral ability, in statute, to determine what a reasonable initial payment would be in certain out-of-network scenarios, with no guidelines as to what that amount should be. Additionally, it removes current obligations imposed on HMOs and exclusive provider organizations to hold enrollees harmless when an emergency situation arises. This hold harmless is part of the value when a patient buys an HMO or EPO product.  

We are also concerned that HB 3933, as filed, lowers health plan accountability for the products they sell to Texas patients and further incentivizes narrow and inadequate networks.  

(I was told that a family of five pays more than $2,500 a month for their health insurance premium on the individual market. The health insurance product has a $6,000 deductible – where is the value with a narrow network?)

For this reason, we think it is imperative that a reasonable initial payment should be established in any legislation addressing this issue (along with an alternative dispute resolution process). If the legislature does not ensure that an out-of-network physician is paid at a rate higher than a contracted rate, there is no incentive for an insurer to bring a physician in-network. Our concern is that HB 3933 would incentivize the insurer to keep physicians out of network.  

Physicians are willing to discount their charges in exchange for in-network status, patient steerage, and the assurance of prompt-payment penalties. But this bill, as filed, further incentivizes insurers to ignore physician attempts to contract with them and to avoid negotiating with a physician in good faith.  

This effect is problematic, as TMA’s 2018 biennial physician survey already shows that physicians are having difficulty bringing insurers to the table. TMA’s survey data demonstrates that 41 percent of physicians with no contracts who attempted to join a network received either no response or a “take it or leave it” offer. Another 30 percent were told the health plan’s narrow network was full and isn’t accepting new physicians. When physicians are not part of a network, it is generally because we either have no choice or no bargaining power. Physician choice and bargaining power would be further reduced if this bill passes.

Again, while taking the patient out of these disputes is important, we would like to see legislation that would hold insurers accountable for the plans they sell our patients and base out-of-network payments on market-based data.    

Thank you for allowing me to testify today, Chairman Lucio, and thank you, Rep. Martinez-Fischer, for your continued work with stakeholders.  

86th Texas Legislature Letters and Testimonies

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Last Updated On

March 25, 2019