Medical Debt and Credit Reports

TMA Testimony by David Bryant, MD

House Committee on Business and Industry
House Bill 2732 by Rep. Dustin Burrows

April 16, 2019

Mr. Chairman, members of the committee, my name is Dr. David Bryant, and I am a practicing anesthesiologist from McKinney. I am testifying on behalf of the Texas Medical Association and its nearly 53,000 members and the Texas Society of Anesthesiologists in opposition to House Bill 2732.

The issue of insurance gaps in preferred provider insurance plans that result in a balance bill, otherwise known as a “surprise medical bill,” being sent to a patient is rightfully an issue of great concern to the patients of Texas.

Unfortunately, we cannot support HB 2732 as a way to address these insurance gaps.

HB 2732 would require physicians and hospitals to provide a patient an itemized description of the “costs to be billed” in scheduled care. I appreciate that the author limited this to nonemergency care, I assume to limit the serious penalties of the bill to situations where the physician or hospital has an opportunity to meet with the patient and provide the itemized list of costs.

However, in reality this language is problematic because many physicians never meet a patient or meet the patient too late in the process to be able to provide this information. Secondly, many times the amount to be billed is unknowable.

Physicians like pathologists and radiologists never meet a patient. They receive tissue samples or imaging that they then interpret. Pathologists may need to run multiple tests depending on the results they receive – none of which is knowable prior to providing the service.

Anesthesiologists like me are particularly vulnerable to this in that, unlike for many physicians who bill a flat rate, most anesthesia billing codes are done on a consumption basis and have modifiers based on the health of patient.

HB 2732 says that we must disclose an itemized list of what WILL BE billed. Many times, we meet our patients in pre-op when we do our patient evaluation. Information we receive during that evaluation may affect our treatment plan and thus what we bill. And certainly we cannot know in advance how long a surgery will be and how long we will need to keep a patient under anesthesia.

When we meet our patients minutes before the operation, we as physicians are not capable of telling our patients what they will be billed because we do not know, and we do not do the billing. We are physicians and, in that moment, we are solely concerned about the surgery that is imminent.

While the bill contains language that requires the form to state reasons why an itemized cost could not be produced, if certain specialties can never comply with the requirements of the law, why should the requirement be law?

This is especially important when, as in this bill, there are penalties that include prosecution by the attorney general’s office and civil liability under the Deceptive Trade Practices Act, which allows for treble penalties.

Another problem with HB 2732 is that it does not reflect the current protections for patients already in the law.

First, under existing Texas law, if the amount owed on the statement is greater than $200 over any applicable copayment or deductibles, and the patient finalizes a payment plan agreement within 45 days of receiving the first billing statement and complies with the agreement, then a facility-based physician may not furnish adverse information to a consumer reporting agency regarding an amount owed by the patient for the receipt of medical treatment.

Additionally, under a 2015 agreement, the three nationwide consumer reporting agencies will not report medical debt until after a 180-day waiting period. This initiative is in place because many instances of medical debt reporting on a consumer’s report are due to insurance coverage disputes and delays.

The 180-day waiting period gives consumers time to pay the bill and to work with their insurance company, if necessary, to hold it accountable for any amount the insurer may owe on the debt. Additionally, the credit reporting agencies will remove from credit reports previously reported medical collections that have been paid by insurance.

Furthermore, there are multiple versions of FICO scores, but the version adopted in 2015 has medical debt carrying less weight than under previous FICO scores. It also does not look at medical debt if it was paid off by the consumer; consequently, paid collection accounts do not impact a consumer’s credit.

Additionally, TMA and TSA have supported the mediation process for any out-of-network physicians at an in-network facility and for emergency care for a bill more than $500.

We also have concerns over the agency designated by the bill, which requires the Health and Human Services Commission (HHSC) to adopt a form that would be required for disclosure of itemized costs to patients. HHSC regulates the Medicaid system but not the commercial health care market where these medical debts typically occur.

HB 2732 not only requires HHSC to adopt a form but also requires physicians to submit a copy of the disclosure on every medical bill for which the physician wishes to preserve the right to submit to a credit agency. Currently, HHSC has no regulatory authority over the commercial market, and the bill appears to create a duplicative regulation over the health care market.

In short, while we are working to remove the patient from disputes between the insurance carrier and the physician, simply preventing the physician from seeking payment options for care already rendered despite the patient’s insurance not covering the service is placing the burden and the penalties in the wrong place.

For these reasons, we cannot support HB 2732.

86th Texas Legislature Letters and Testimonies

TMA Legislative main page

Last Updated On

April 16, 2019

Originally Published On

April 16, 2019

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