Protecting Patients From Balance Bills

TMA Testimony by Ray Callas, MD

Regarding Balance Billing
In SUPPORT of CSHB 2967 by Oliverson and CSHB 3933 by Martinez Fischer
House Insurance Committee 

April 2, 2019

Mr. Chairman and Committee Members my name is Dr. Ray Callas and I am an anesthesiologist from Beaumont/Houston, Texas. I am a member of the Texas Medical Association’s Board of Trustees and today I am testifying on behalf to the Texas Medical Association and its nearly 53,000 members across the state of Texas and the Texas Society of Anesthesiologists in support of the committee substitutes for HB 2697 HB 3933, which are identical. 

First, we would like to thank Rep. Tom Oliverson and Rep. Trey Martinez Fischer for working with Senators John Whitmire and Kelly Hancock for finding a solution to out-of-network surprise bills. 

The committee substitute will hold harmless patients for expenses beyond their copay, coinsurance. and deductible for all emergency care and situations where a patient may receive a surprise bill for physician services, facility fees or diagnostic testing or imaging, and for special medical services ordered by an in-network physician. 

The bill prevents a physician or provider from sending a bill to the patient for any remaining cost for services rendered out-of-network, but it provides a quick and simple appeals process for either the carrier or the provider for a dispute over these costs. That process completely removes the patient from the middle. 

After a mandated informal call between the carrier and the physician, if a solution is not agreed to by the parties, the bill is sent to a reviewer who must decide whether the carriers’ offer for payment or the physician or provider’s billed charge is most appropriate within a range. The reviewer must base that decision on the quality of care, the complexity of the case, the health of the patient, and the expertise of the provider. The payment may be as low as the median of in-network payments and no more than the 80th percentile of billed charges. This range protects a small physician practice or provider without the negotiating power to get in-network with a carrier; it also protects carriers from egregious billing from providers. 

In the vein of all good legislation, no one gets everything thing they want out of this legislation, and we do have a few concerns we would like to continue to work with the authors on. 

Attorney General Enforcement

The bill contains language that, in certain instances, prohibits a non-network physician or provider from billing an enrollee in an amount greater than the enrollee’s responsibility under the enrollee’s health care plan, including any applicable copayment, coinsurance or deductible. Under the bill, the attorney general is authorized to bring an action for injunctive relief if he believes that someone is violating this provision (and may recover attorney’s fees, costs, and expenses). 

Since the health plan (and not the physician) is the entity that has information about the enrollee’s responsibility under the plan (including the applicable copayment, coinsurance, or deductible), how is an out-of-network physician or provider who is operating in good faith supposed to comply with this provision? 

What happens if the physician believed he or she was billing only for an applicable copayment, coinsurance, or deductible but did not have access to accurate information from the plan? Under this bill, what is the plan’s obligation to provide this information to the physician or provider and in what time frame? What happens if the plan provides misinformation or fails to provide the information in a timely manner, resulting in the physician or provider inadvertently violating the law? 

Health Plan IDR Process

In Section 1467.051 the bill says that the provider must “exhaust” the health plan’s internal dispute resolution (IDR) process before going to the arbitration process. This reads as though you cannot even begin the informal telephone call until you have exhausted the internal IDR process of the health plan. The first concern is that this seems to be an added and unnecessary step, as the informal conference call already exists in our current mediation process. Second, we have great concerns that a health plan could put the physician on a “hamster wheel” of an internal IDR process - delaying or even discouraging the initiation of the arbitration – thus undermining the process being put in place.

Trial de Novo

We are also concern with Sec. 1467.0565 where after the arbitration process has finished and a winner has been chosen, a trial de novo could be initiated should one party or the other disagree with the arbitration outcome. While it is understood that a remedy for bad faith arbitration or misused information is needed, we would not want to see a health plan, with far more resources than a small physician practice, use this final process as a means to discourage use of the arbitration process. While this may be an unintended consequence of the intent, it would be one that we feel could undermine the arbitration process. 

Contract Rates

Among the criteria that an arbitrator must consider in determining the arbitration award, we believe the history of the physician’s or provider’s in-network charges and status is an important additional criterion the arbitrator should consider. That is useful to determine whether this is a physician or provider who was recently terminated from a contract or has a history of being out-of-network.

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Last Updated On

February 09, 2023

Originally Published On

April 02, 2019