TMA President: Rulemaking on Surprise Billing Must Be Fair to Docs
By Joey Berlin


Now that the Texas Legislature has passed a measure to counteract surprise billing involving many state-regulated plans, it’s time for rulemaking. 

The Texas Medical Association is working to make sure the Texas Department of Insurance’s (TDI’s) eventual rules borne out of Senate Bill 1264 will give physicians a fair shake. 

TMA President David Fleeger, MD, represented medicine at a TDI stakeholder hearing Monday, where Insurance Commissioner Kent Sullivan heard input from TMA, the Texas Association of Health Plans, the Texas Hospital Association, and others on SB 1264. TMA ultimately supported the final version of the bill, which Gov. Greg Abbott signed in June and which essentially takes effect Jan. 1. 

SB 1264 takes the patient out of the middle of billing disputes between physicians and health plans, establishing an independent arbitration process to resolve those disputes. Under the system, an arbitrator – chosen by either the two parties or TDI – essentially picks the appropriate payment amount from either the physician’s billed charge or the health plan’s initial payment. (Those amounts may change during the health plan’s appeal process before the case reaches arbitration.) For the plans SB 1264 affects, balance billing will be prohibited. That includes preferred provider organizations, exclusive provider organizations, and HMOs, as well as Employee Retirement System and Teacher Retirement System plans. 

SB 1264 includes a list of 10 factors for the arbitrator to consider in making the decision, including the physician’s usual billed charge for comparable services or supplies when out of network, and the circumstances and complexity of the patient’s case. 

Dr. Fleeger told TDI that while TMA agrees patients should not find themselves in surprise billing situations, the process to resolve payments must be fair if physicians hope to keep practicing. 

“In order to practice in Texas, if the rules do not facilitate a fair playing field with the health plan issuers, physicians may have no other option other than to consolidate in order to keep their doors open,” Dr. Fleeger told TDI. “In the long term, a push towards consolidation will not reduce costs and is contrary to the overarching goal of the legislature. In other words, a delicate balance must be struck in rule adaptation, with a focal point on patient care, access to care, and appropriate regulation of health plans. 

“The bill was intended to act as a patient protection measure,” Dr. Fleeger added, “not a health plan windfall bill.” 

Dr. Fleeger also included six key components for TDI to consider in its rulemaking. Among those points, he stressed that TDI’s current work and oversight on network access and adequacy must continue; that the factors an arbitrator considers should be limited to the 10 factors laid out in the bill; and that the benchmarking database used to provide data for the arbitrator to consider should be an independent, not-for-profit database with the most accurate, localized information possible, rather than regional data that might lump together urban, suburban, and rural practices. 

Several organizations, including TMA, recommended TDI pay attention to the success of New York’s independent dispute resolution process, which served as a model for SB 1264. 

“I will tell you that New York, I believe, has come up with a winning combination,” David Bryant, MD, representing the Texas Society of Anesthesiologists, told TDI at Monday’s hearing. “And we know that because we have a good [two to three] years of data from New York. And we know that New York has not only decreased the out-of-network participation rate for all providers from 20% down to 4%, [but] we know that the cost is very cheap, at $300 per event. … And yet, contract prices have not gone up. And so that’s a very good track record that we should [use to] model some of the features that we’re doing.” 

TDI has not announced a timeframe for when a proposed rule will be released.

Last Updated On

October 08, 2022

Originally Published On

July 31, 2019

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