First Across the Finish Line: Medical Billing Tax Eliminated
By Joey Berlin


Medicine scored both a major victory and an early one during the just-completed session of the Texas Legislature when one of the Texas Medical Association’s biggest priorities became the first bill signed into law this session.

More than a year of work and collaboration came to fruition with House Bill 1445 by Rep. Tom Oliverson, MD (R-Cypress), which classifies outsourced medical billing as being outside the realm of insurance services. When Gov. Greg Abbott signed the bill on April 30, it nullified a medical billing tax scheduled to take effect Oct. 1.

The planned tax came as a result of outside pressure on the state comptroller’s office to classify billing companies’ preparation of a medical claim as claims adjustment or processing, which – as insurance services – would subject those companies to a tax of up 8.25% for those services. Patients and physicians likely would have paid increased costs as a result.

TMA successfully lobbied twice to delay the tax – eventually pushing the implementation date until after session – and received guidance from the comptroller’s office on legislation that would prevent it from taking effect.

HB 1445 passed the House with a record vote of 147-0, then passed the Senate by another unanimous vote, 31-0.

Medicine’s fervent advocacy included testimony before the House Ways & Means Committee in March, when Tyler obstetrician-gynecologist Yasser Zeid, MD, told the committee that many small practices rely on third-party billing services because they don’t have the resources to prepare and submit their claims in house.


Last Updated On

June 07, 2021

Originally Published On

June 07, 2021

Joey Berlin

Associate Editor

(512) 370-1393

Joey Berlin is associate editor of Texas Medicine. His previous work includes stints as a reporter and editor for various newspapers and publishing companies, and he’s covered everything from hard news to sports to workers’ compensation. Joey grew up in the Kansas City area and attended the University of Kansas. He lives in Austin.

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